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.
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