A new horizon is opening up for hotels, following the European obligation for Booking to abolish the parity clause, a requirement that the online booking giant has so far demanded from establishments to avoid selling rooms through their own channels (online, telephone, email or other) at prices lower than those published on the platform. It is a measure that the sector has long been demanding and that will become a reality from tomorrow, 1 July, as a result of the adjustment to the Digital Markets Act affecting all European Union countries. Hotel chains are trying to take advantage of the paradigm shift with great offers and the promotion of their own channels through which they will also try to retain more customers, as industry sources told this newspaper.
Hotels have always seen Booking as a great commercial ally, but for years they have criticized the high commissions that the platform charges for each reservation, in addition to other requirements such as making a minimum number of rooms available. The Netherlands-based company, but owned by American Booking Holdings, is today the largest reservation center in the world and no other online agency closely challenges its leadership: three in four reservations (71%) in Europe are made by an online agency (OTA) uses it, according to the V Hotel Distribution Study of the European restaurant association Hotrec, the most important association of the sector at continental level.
A monopolistic dominance that has cost the country prosecution by the European Commission and also by the National Markets and Competition Commission (CNMC) which concludes a historic fine of 486 million euros for abuse of a dominant position, following the complaint filed in 2021 by the Spanish Association of Hotel Directors and the Madrid Hotel Business Association. In its accounts for fiscal year 2023, the company attributed losses of $530 million to this preliminary decision by the Spanish organization.
Crucial alliance
But that between hotels and Booking will be a relationship that, despite the new scenario, will be almost impossible to change in general terms. The dependence on the room distribution giant is particularly great for Spanish establishments. In fact, the great guru of hoteliers in our country, Antonio Catalán, has always defined the platform as “the commercial director of 80% of hotels in Spain”. There is no shortage of data to support this. The latest Hotrec study, published in 2022, shows that, despite the increase in sales through direct channels of Spanish hotels, a third of them (32%) in 2021 depended on OTAs (Expedia, agoda or Trip.com are others). most used). It was a percentage higher than that of other European tourist powers such as Italy (21%), Greece (22.4%), France (25.7%) and above the European average (28.2%).
With this data in its favor, Booking is confident that there will be no disconnection from the platform and that virtually nothing will change in the relationship with the hotel companies. “Our commitment has always been and will continue to be: to listen to our partners and constantly innovate to stimulate new business opportunities for them, in addition to showing them the unique advantages of each property and in return we hope that they continue to see benefits in working with us and in our ability to fill their rooms,” Booking.com Spain Manager Pilar Crespo told this newspaper.
The head of Booking in our country defends that hotels have always been “free” to set the conditions of their services as they see fit, without being affected by the parity clause. “Parity offers consistent price advantages for consumers, but as we have announced, we will comply with our obligations under the Digital Markets Act,” says Crespo.
As for the economic impact this will have for the multinational, Crespo believes that 'these are difficult to anticipate'. “We hope that the accommodations we work with through our platform will continue to offer competitive prices. In other European markets where parity clauses did not exist before, our partners, if they are competitivecan boost the sales of your accommodations. “We will continue to support them so that they can get the most out of their business,” he adds.