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April 26, 2015

BHA says EU’s decision to enforce rate parity against hotels is not a meaningful solution

In response to the decision taken by EU competition authorities to enforce rate parity with online travel agents, the British Hospitality Association (BHA) said the industry is concerned that online booking companies are stifling competition.

Jackie Grech

In response to the decision taken by EU competition authorities to enforce rate parity with online travel agents, the British Hospitality Association (BHA) said the industry is concerned that online booking companies are stifling competition.

The BHA said competition is curbed through high commissions, rate and service parity.

BHA legal and policy director Jackie Grech said: "The authorities decision to uphold rate parity against hotels was not a meaningful solution and doesn’t return freedom to the market.

"The decision does little to help customers or hotels. Online travel agents serve a benefit to the travel community."

The BHA alleged online booking companies are also manipulating search results and star ratings in order to lure customers to book hotels.

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"The BHA said competition is curbed through high commissions, rate and service parity."

Jackie Grech said: "Hotels, especially small independents, must either sign-up to sell rooms through online travel agents (OTAs) and fork out up to 35% of their total room rate and also agree to incredibly unfavourable terms on how to operate their business or face invisibility online.

"Customers and hotels alike will benefit from transparency and fairness."

The competition authorities in France, Italy and Sweden agreed on 22 April to various commitments that were offered by Booking.com following a series of investigations into their market dominance.

With the commitments Booking.com can bar hotels from marketing and offering hotel rates at a discounted rate to the public on their own websites.

According to BHA, Expedia and Booking.com, the primary travel agents, can control search results and have funding to purchase key word searches.

A growing majority of customers are encouraged to book through an OTA site, instead of booking through the hotel’s own website.


Image: BHA legal and policy director Jackie Grech. Photo: courtesy of British Hospitality Association.

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