On May 13, 2024 the European Commission (EC) designated Booking as a 'gatekeeper', similar to how it previously branded Google, Facebook, Microsoft, Amazon, TikTok, etc.
“Holidaymakers will start benefiting from more choice and hotels will have more business opportunities,” declared Margrethe Vestager, EC’s Executive Vice-President in charge of competition policy.
One of the results of this designation by EC is that Booking can no longer include rate parity clauses in its agreements with hotels. In other words, hoteliers can now publish promotions and lower rates on their websites than what they provide the OTAs with.
Will European Hotels benefit from this decision? Depends.
Smart hoteliers who invest in talent, technology and digital marketing have now a great opportunity to increase their direct online bookings.
The rest? The ones with 5-year old, mobile-unfriendly property websites? With ancient SEO and visual and textual content? The ones without merchandising strategy and up-to-date website technology like chatbot for 24/7 customer support? The ones without mobile payment options and multilingual booking engine?
And, of course, the ones without adequate investments in digital marketing? These hoteliers will will continue to be overdependent on the OTAs in a downward spiral to insolvency.
The outlawing of rate parity in France back in 2014 serves as an important case study. Five years after this law, heralded as “liberation from Booking” and great opportunity for French hoteliers, Booking doubled their market share in a France and quadrupled it 10 years later.
Why did it happen? The main reason was French hoteliers’ continued systemic underinvestment in the direct online channel - talent, website technology and digital marketing.
Just imagine if you publish lower rates on your tired and unkempt property website that is visited by more malicious bots and search engine spiders than humans - who will even see these lower rates?
Read: Commission designates Booking as a gatekeeper and opens a market investigation into X
Max Starkov
Hospitality & Online Travel Tech Consultant & Strategist
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