Across Europe, we're witnessing an unprecedented wave of collective legal action as hotel associations in more than 25 countries have joined forces to sue Booking, seeking billions in damages for commissions paid between 2004 and 2024.

This follows last years’ European Court of Justice ruling that rejected Booking.com's defense of rate parity clauses, giving hotels the all the ammo they needed.

The paradox we face

There's something deeply counterintuitive about suing your biggest distribution partner. Booking.com probably has a 70% market share in European OTA bookings, making it the lifeblood for many properties' revenue streams. I reckon this leads to about 20% of all hotel bookings in Europe.

It's like biting the hand that feeds you – except in this case, that hand has been taking increasingly larger portions of the meal. I am not saying that booking did all according the rulebook nor that they played nice when they crossed certain boundaries. I am saying that there is a real risk to actions like these for hotels.

Why do hotels take this risk?

The math is compelling. OTA commission rates seem to have climbed from around 10% to12% to 15-30%+ over recent years, while rate parity clauses prevented hotels from offering better prices on their own websites, stifling direct bookings and price competition. Note, I say seem to have climbed, as I was working as an OTA 2 decades ago and I can tell you without hesitation that our margins/ commissions were way higher.

The math of commissions transparently increasing is painful though. For properties operating on thin margins, this represents the difference between being profitable or taking a loss during certain years.

More importantly, this is about market power. When one platform controls distribution to this degree, the relationship shifts from partnership to dependency – and that's dangerous territory for any business.

The strategic risks are real

Let's be frank about what hotels are wagering:

• Retaliation risk: Search ranking algorithms are black boxes. A vindictive platform could easily bury properties in search results or deactivate them.

• Market access: For independent hotels especially, OTAs provide reach that would be impossible to replicate through direct marketing. And I have witnessed chain properties and entire large chains accepting this fact as well. OTA’s specialize in reaching mass markets and they’ ve outmatched everyone.

• Revenue disruption: Even a temporary reduction in OTA bookings due to this legal action could severely impact cash flow.

• Collective action problems: If only some hotels participate, others could gain competitive advantage through continued OTA favoritism.

Why this fight was inevitable

The hotel industry's action reflects a broader tension in online sales.

However, when intermediaries become giants, they can extract increasingly push through unfavourable terms towards suppliers who become dependent on their distribution power.

The phenomenon is not new, old school wholesalers and touroperators would also never shy away from a tough negotiation. Hotels have always had a love-hate relationship with 3rd party distributors.

Hotels have in recent years endured practices like

• withholding of guest data
• prevention from offering better prices on their own websites
• endless undercutting via non transparent methods
• questionable advertising methods
• loss of control of the customer relationship to the platform

In any business this level of control eventually triggers pushback.

The bigger picture

This isn't just about commissions or control over consumer rates. It's about the future structure of hospitality distribution. Will hotels successfully regain control over their pricing and customer relationships? Or will OTA dominance prove impossible to challenge?

The European legal action represents the industry's bet that collective action can rebalance these relationships. With litigation costs covered by funders and no upfront legal risk to participating hotels, the downside is limited while the potential upside is substantial. Does no-one wonder why legal cost is funded?

What this means going forward

We're likely seeing the beginning, not the end, of this confrontation. Similar dynamics exist globally, and success in Europe could encourage other similar initiatives worldwide.

For hotel operators, this should be about building sustainable distribution strategies that don't create existential dependencies on any single channel.

Will there be any real winners to this story though?

Remko West - Follow
Co-Founder @ Xotels | Hotel Management, Revenue management, Hospitality concepts