B&B Blog

David Weston of the Bed & Breakfast Association 'fights the corner' for this £2 billion 'cottage industry'

Saturday, 16 July 2016

Guests rate B&Bs 8.8% higher than hotels



Above: the overall average guest ratings in 2015 of B&Bs (89.6%) and Hotels (80.8%)


British B&Bs are rated by guests 8.8% higher for quality than hotels, on average, according to new data just released. The study analysed millions of traveller ratings given to hotel and B&B properties on TripAdvisor, which is the world’s largest travel website with 340 million unique monthly visitors, and which lists 350 million reviews covering 6.5 million accommodations.

The study by TripAdvisor found that “smaller, independent accommodations in the UK were providing the biggest boost to the UK's overall average rating” - with B&Bs scoring an average review rating of 4.48 out of 5 (equivalent to 89.6%) compared to 4.04 (80.8%) for hotels in 2015.

Even within the hotel sector, smaller properties were shown to have a ratings advantage over larger properties, with UK hotels with fewer than 25 rooms scoring an average of 4.40 (88%) in 2015 compared to those with 26-100 rooms, where the average is 3.97 (79.4%).

"These figures are excellent news" commented David Weston, Chief Executive of the Bed & Breakfast Association, "Guests clearly love the individuality, character, home-cooked breakfasts and personal service that they get in British B&Bs, which is why - in millions of reviews on TripAdvisor - they score an 8.8% higher rating on average than hotels. These figures from TripAdvisor prove that B&Bs are the favourite accommodation in the UK based on guest satisfaction".

Monday, 6 July 2015

Booking & Expedia reinforce “rate parity” in the UK while France moves to ban it - will the CMA act in the UK?


There have been seismic moves in the ongoing saga of “rate parity” – whereby online travel agencies (OTAs) are preventing B&Bs and hotels from offering a lower price on their own websites to that offered via the OTA (who demands a commission of typically 15-23%). The B&B association and other bodies, including the British Hospitality Association (BHA) are strongly against OTAs being allowed to impose “rate parity” clauses on properties’ own website sales. However, OTAs are fighting this to the last, as their business model depends on being able to claim they offer the best available rates.

In Europe, OTAs and metasearch websites drive 70% of bookings (much higher than in the USA).

In April, Booking.com (in their words) “reached agreement with national competition regulators in France, Sweden and Italy, that Booking.com would drop price, availability and booking conditions parity provisions with respect to other OTAs”. This concession was made by Booking in order to retain their ability to impose price parity on hotels’ own websites.

On 25 June, Booking “decided to extend these commitments to all our accommodation partners throughout Europe from July 1”.

A Booking spokesman told the Association: “I respect that the Bed & Breakfast Association represents the views and interests of many B&Bs and guest houses in the UK, and by that virtue there will be a number of different opinions in relation to this decision. But I want to stress at Booking.com we remain resolute in our objectives in the UK:

·      “To bring transparency, choice and value to consumers;
·      “Help drive business for our accommodation partners; and
·      “Constantly innovate our platform to ensure that we are reaching the widest customer audience (helping our accommodation partners realise increasingly higher occupancy levels)”

Under the new provisions, Booking.com will abandon its price, availability and booking conditions parity provisions with respect to other OTAs, but will retain its “narrow MFNs” [“most favoured nation” clauses] for prices and booking conditions which will ensure hotels & B&Bs offer the same rates and booking conditions on Booking.com as they do through their own direct website.

With the implementation of the new parity provisions, Booking.com will continue its Best Price Guarantee and match any lower price that may be found on another booking website

Does the UK regulator accept the changes?
Booking said its June decision is “in line with its commitment to a new Europe-wide standard to keep competition healthy, driving value for consumers and hoteliers”, and stated that it “is a direct result of feedback from many European national competition authorities indicating that they would welcome Booking.com implementing the commitments in their jurisdiction”.

This seems to imply that the UK’s Competition & Markets Authority (CMA) may have tacitly nodded through the change (ie accepting OTAs ability to enforce “rate parity” here) – but the CMA has so far said nothing to support this, and the B&B Association and BHA are seeking clarification and stressing their opposition to rate parity, maintaining that OTA “rate parity” clauses increase prices for consumers, by forcing hotels and B&Bs to always charge their guests a price including commission (typically from 15-23%), even if the property is not paying that commission (eg where the guest books directly on the hotel’s website).

Jackie Grech, BHA Legal and Policy Director said: "With both German and now French governments setting precedents we encourage that UK regulators and government will take up the issue to put the power back into customers hands as they shop around online for the best deals.”

Many are questioning the CMA’s priorities, as it has seemed to be vehemently against a hotel setting the price of its own rooms sold via agents (which it calls “retail price maintenance”, and says is illegal), whilst seeming to be unconcerned by market-dominant global intermediaries preventing small B&Bs and hotels from lowering their prices to their direct customers. Yet the latter practice (OTA “rate parity” clauses) in effect builds in the OTA’s commission to every price paid by the consumer, even where the booking is not through the OTA.

Booking.com, with an eye on the European Commission, said its move meant “standard terms will be the same for all of its European partners – helping to build a single European digital economy”.  

“The commitments agreed with the French, Italian and Swedish [competition authorities] promote competition in a way that supports innovation and investment.  We think that all of our European partners and consumers booking at European hotels should benefit from the commitments… which is why we have decided to amend voluntarily our parity provisions right throughout Europe to be consistent with those commitments,” said Gillian Tans, President of Booking.com.  “We welcome and encourage fair competition and hope that our fellow online travel agencies follow Booking.com’s lead as part of a shared commitment to support best pricing for consumers.”

Booking.com added that it “trusts that these changes will set the tone for an industry wide solution”.

Expedia falls into line a month later
Sure enough, within days Expedia took up Booking’s invitation to follow its lead, and announced that from 1 August it will bring itself in line with the rate, conditions and availability parity clause commitments offered by Booking.com. It hopes that the move “will bring to an end further investigations into competition issues in Europe”.

“The changes announced apply to all hotel properties in Europe and affect consumers booking via Expedia’s sites worldwide.

Expedia echoed Booking in implying a measure of acceptance from European regulators, stating: “A number of European competition authorities are currently investigating rate, conditions and availability parity clauses in certain OTA agreements with hotels. Expedia has worked closely and constructively with these authorities and the European Commission and today announced that it is waiving its rate, conditions and availability parity clauses with its hotel partners for a period of five years in line with Clauses 1.1, 1.2 and 2.1 of the formal commitments offered by Booking.com and accepted by the national competition authorities in France, Italy and Sweden in April 2015.”

Expedia also echoed Booking in arguing that its move helped the EU’s digital market, saying: “The pan-European scope of Expedia’s announcement is also an important contribution to the European Commission’s Digital Single Market objective”.

It had to acknowledge, though, that individual countries (perhaps starting with France) can overturn rate parity, saying: “To the extent that individual countries’ regulatory or legislative developments may in the future cut across Expedia’s change of commercial policy announced today, Expedia naturally reserves the right to adjust its revised approach as appropriate”.

French parliament votes to kill rate parity in France
Meanwhile on 18 June, the French National Assembly moved to cancel rate parity clauses in contracts between hotels and online travel agencies (OTAs), in the “Macron Bill”.
Instead the legislation gives hotels a “mandate” contract where they will control all pricing and availability for all online reservation platforms and OTA’s sales channels.
The new French law would apply regardless of where the online booking platform is headquartered in the world.

Booking.com and other OTAs may challenge the law via the Constitutional Council. Otherwise hoteliers in France will soon be able to display on their online and offline channels lower rates than they offer to online booking channels. The parliamentary move particularly stung Booking.com, which commands two-thirds of the online market in France. The banning of rate parity would seem to negate the agreement reached six months ago between Booking.com and the French competition authority, which did not ban rate parity.
The French Hotels Association says the Bill will promote discounting of hotel rooms by ending price parity – echoing the stance of the BHA and B&B Association in the UK.

Some small OTAs doubt that even ending rate parity will level the playing field, given the market dominance of the biggest OTAs. Uwe Frers, owner of Berlin-based OTA Escapio, says: “Sometimes Escapio gets a rate for a hotel that is lower than what is available on Booking.com. When that happens, within about six hours, Booking.com calls the hotel demanding parity. Given that Booking.com has 50% market share in Germany, hotels listen and match the rate. That makes it harder for us to compete on price.” Frers said that he hopes that the European Commission ends rate parity because the practice is wrong. But he is sceptical that things will change for small OTAs as long as Booking has such enormous market power.

Price war or price inflation?
The OTAs seem to be sending contradictory messages as to whether ending rate parity would lead to lower or higher prices for consumers.

Carlo Olejiniczac, Booking.com’s regional manager for France, Spain & Portugal told French media that the end of rate parity might lead to an “exacerbated price war. Hoteliers are likely to suffer…. This will cause unbridled price pressure.”

However Christoph Klenner, secretary general of the European Technology and Travel Services Association describes it as “a licence for the hotels to increase prices”, saying “There will be no price competition if hotels determine all prices.
“Hotels will unfairly favour their own channels for the lowest pricing and availability, which will substantially reduce competition and consumer choice.
“It will lead to higher prices as there are no incentives for hotels to discount if they can eliminate all competition across distribution channels.”

It must be pointed out that OTAs are not trying to stop hotels from offering a higher price – their “rate parity” provisions are designed to prevent hotels from offering a lower price to consumers than the price through the OTA. B&B Association CEO David Weston took issue with Klenner’s statement, saying:
“Firstly, why is it “unfair” for a hotel or B&B to ‘favour their own channels for the lowest pricing’? – and secondly, why would allowing our members to use ‘their own channels for the lowest pricing’ lead to higher prices?
“The common-sense truth is, of course, that (as hotels and B&Bs everywhere say) if we had the freedom to sell direct without commission when we are not paying it, the consumer could pay a lower price for the same product. The OTAs could never admit that, though, as it would undermine their business model, which depends on their controlling the prices hotels & B&Bs charge, and preventing our discounting to our own customers.”

The B&B Association will continue its campaign for commercial freedom for B&Bs, and the right to offer guests a lower price via the B&B’s own website.


What do you think? Email us at comment@bandbassociation.org


UPDATE: Since the above was written, the Association has been assured by the CMA that it has not given any indication to Booking or Expedia that it would accept their new unilateral change of terms in the UK; the CMA also says it will be studying the market carefully as the new terms bed in, and looking at any evidence which might indicate whether OTA "price parity" clauses are increasing the price consumers pay. If the CMA were to be convinced that the workings of the market (with "price parity" imposed by OTAs on hotels) is anti-competitive and/or driving up consumer prices, it will take action.



The above article was originally published in the B&B Association's member magazine, B&B News (July-August issue); the Association wanted to make it more publicly available as part of our campaign against "rate parity" clauses which prevent B&Bs from reducing prices directly to their guests via their own websites.


Thursday, 23 April 2015

Booking.com "settlement" lets it carry on bullying independent hotels & B&Bs


Booking.com, the giant global online travel agent (OTA), now has more than 41% of Europe’s €44bn market for hotel bookings and air travel. Its US owner Priceline raised its spending on advertising by 34.5% to nearly $2.6bn last year to help cement its dominance of our marketplace.

To the same ends, Booking.com has just avoided the prospect of open competition over hotel prices in Europe after agreeing a settlement with the French, Italian and Swedish authorities.

The three countries, working together and in co-ordination with the EU, had challenged Booking.com over its practice of fixing prices with hotels on its website so that it always had the lowest rate.

Under the terms of the latest settlement, Booking.com will "allow" the hotels and B&Bs on its site to offer cheaper rates through other OTAs, and on the telephone, but not via the hotel's or B&B's own websites.

Darren Huston, the chief executive of Priceline which owns Booking.com, said that the deal was a “good step forward” - but critics are saying that the ruling will do little to open the way for real competition in a market that has become dominated by Booking.com and Expedia. 

“It doesn’t help competition and it’s terrible for the consumer — hotels can’t offer them anything but the same price they offer Booking.com. And there are very few rival travel agents in the market,” said Dorian Harris, the chief executive of Skoosh, a smaller online travel agent that brought the first competition complaint in the UK in 2010.
“We’re now formally allowed to undercut Booking.com,” he added. “But I’m not daft. When Booking.com starts to penalise hotels who give Skoosh a price advantage, which they will of course, the hotel will have to side with Booking.com.”

Mr Harris said that smaller websites had been shut out of the market because they could not compete with Expedia and Booking.com either on price or on marketing. 

The Bed & Breakfast Association believes that this new settlement, thrashed out behind closed doors in Europe, is wrong and anti competitive, and against the interests of consumers. The Association believes that Booking.com should not be allowed to prevent B&Bs and hotels from offering their lowest prices on their own websites, and also believes that Booking.com, Expedia and other OTAs should not be allowed to "buy" top places on web searches by "bidding" on the names of individual hotels and B&Bs, without their explicit permission, for pay-per-click search advertising on Google.

The Bed & Breakfast Association challenges Booking.com to defend how it uses its dominant position in the market to bully small independent B&Bs and hotels, by preventing them offering their best prices on their own websites, and by other tactics based on its market dominance - such as 'bidding' on the names of their B&Bs and hotels in web searches, without the explicit permission of the owners. We strongly believe that the Competition & Markets Authority should redress the balance of power from this global giant, back to the individual B&B and hotel owners.


Do tell us your views, by emailing comment@bandbassociation.org 


Thursday, 4 December 2014

New, easier alcohol Licensing for B&Bs: have your say by 9th December



The B&B Association has been involved in talks with the Home Office for about a year now about moves (which we have been pushing for) to introduce a new, easier, cheaper, less onerous method of alcohol licensing for small B&Bs (and for other businesses where alcohol is sold “ancillary to” their main business) in England and Wales. The Home Office have an online consultation, closing on 9 December – and we urge all members to respond to it – see below.

Lynne Featherstone, Minister of State for Crime Prevention, says:
“The Government is committed to reducing the unnecessary burdens on responsible businesses. Small businesses have told us that the existing licensing requirements are heavy handed for those who want to sell small amounts of alcohol as part of a wider service. For example, small bed and breakfasts wishing to provide a welcome drink to guests must be at present licensed in the same way as a large hotel with a public bar.”
“We want to free up the police and local enforcement agencies to concentrate on the premises that are causing alcohol harms. The Community and Ancillary seller’s Notice (CAN) will allow such particular low-risk businesses and community groups to sell a small amount of alcohol, while providing appropriate, light-touch controls.”

The 'small print'  of the CAN conditions applicable to B&Bs are:
The CAN will be authorised for 36 months; alcohol may be sold between 7am and 11pm from a single named premises, for consumption on the named premises; notice will be given to the licensing authority; the prescribed fee will be paid; Police, Environmental Health Authority and licensing authority can object if a CAN will undermine the licensing objectives, with the result that the CAN may be revoked. Police and licensing authority officers will have rights of entry to investigate where users are in breach of the CAN conditions.
No right to a hearing or appeal if a CAN is revoked. The sale of alcohol must be “ancillary to” the provision of goods or services by the business.


Key Consultation Questions (and our recommended answers in green):

Question 1: what size of accommodation do you think should be determined a “small accommodation provider” for the purpose of the CAN?
a) An accommodation provider with up to five bed spaces
b) An accommodation provider with up to ten bed spaces
The Association recommends answer (c):
c) An accommodation provider with up to fifteen bed spaces
d) An accommodation provider with up to twenty bed spaces
e) Don’t know

A key principle of the CAN is that the sale of alcohol must be ancillary to the provision of services on the premises. The quantity of alcohol allowed to be sold under a CAN will be set out in the regulations, specifying any particular circumstances which may apply. For example, it may be permitted to offer a couple staying overnight in a B&B a bottle of wine in their room.

Question 2: how much alcohol do you think should be allowed to be sold by ancillary sellers under a CAN, per guest, in a 24 hour period?

a) Up to 2units (eg a small 125ml glass of wine; a pint of 3.5% ABV of beer; a 330ml bottle of 4% ABV lager; one double measure of spirits)
b) Up to 3 units (e.g. a large 250ml glass of wine; two 330ml bottles of 4% ABV lager; a pint of 5% ABV beer)
c) Up to 5 units (e.g. a 750ml bottle of 13% ABV wine between two people or a 250ml bottle of spirits between two people)
The Association recommends answer (d):
d) More than 5 units (e.g. allowing a bottle of wine between two people in a room plus an additional glass of wine with a meal)
e) Don’t know


Information about the consultation is at:

The consultation survey questions can be found at the following link (closes at 23.45 on 9th December):