B&B Blog

News and updates from the Bed & Breakfast Association

Thursday 7 March 2019

Why ‘highjacking’ your name on search engines should be banned

The relationship between accommodation owners and giant online travel agencies (OTAs) is one of the hottest topics in our industry just now.

The big OTAs undoubtedly offer huge benefits to hotels and B&Bs, helping us to fill our rooms by marketing them globally on user-friendly apps and websites for a known commission rate, payable only when a booking is taken.

However, this great boon has come at a heavy cost – the dominance of especially the two biggest American OTAs who have 80% of that market, and the consequent reduced margins for accommodation owners and loss of cashflow, soaring cancellation rates, and a compromised relationship with their guests.

Profits have taken a big hit for accommodation owners, employers and risk-takers as the online intermediaries grab an ever-larger share of bookings (taking their 15-25% cut on those), and consequently prices have been driven up for consumers, and  the OTAs have been hugely enriched. The big two OTAs are now worth much more than the biggest four global hotel groups combined.

From the small accommodation owners’ perspective, this loss of control and profitability to the intermediaries has not been the result of free and fair competition. It has been at least partly driven by (a) some egregiously misleading marketing, (b) restrictive “rate parity” clauses preventing discounting by owners to their direct bookers, and (c) the dominance by the OTAs of internet search.

Back in July 2017, the B&B Association filed five formal complaints with the UK competition regulator (CMA) covering those three key areas.  Three of our complaints – on fake “discounts”, misleading availability statements and manipulated search rankings – were acted on by the CMA on 6th February this year, when they banned a raft of“misleading” practices by OTAs.

Our first complaint to the CMA had been about “rate parity” clauses, which we still want banned – and I wrote about that issue in Travel Weekly recently (“Why OTA ‘rate parity’ clauses should bebanned”, Feb 13th).

That leaves our fifth complaint to the CMA from 2017 (also still not addressed): against forced (non-optional contract term) bidding by OTAs on hotel and B&B names with search engines.

This practice enables the OTAs to colonise the top of search listings, even for searches of a B&B’s or hotel’s own brand/name, without the owner’s express permission. It is typically bundled with all the other T&Cs, so non-negotiable.

One of our members, Frank McCready, referred to this as “brandjacking”. He says: “The considerable investment I have made in a website that enables online realtime availability and booking is totally wasted. I am now invisible in web searches- lucky to appear on page ten!”  His requests to the OTA to stop bidding on his name were refused, and he was told by Google that only a spend of over £900 per month on pay-per-click would counter the OTA taking top place on Google searches for his B&B’s own name.

We agree that a hotel or B&B should be allowed to say to an OTA “yes, we’re happy to deal with you, happy to give you our availability, happy to pay you commission on bookings you bring us, BUT we don’t want you to undermine our own direct marketing by bidding on our own name with search engines”. That would make competition freer and fairer.

The way to achieve that is for the CMA to ban the OTAs from forcing their name-bidding terms on an accommodation provider. That must not be a non-negotiable item bundled into the OTA’s T&Cs on a “take it or leave it” basis as at present; it must be subject to separate express agreement.

We see this ‘ask’ as a modest and reasonable way of redressing the grotesque imbalance of power between global OTAs and tiny family businesses, and making competition a little fairer. So join me in urging the CMA to act.

CLICK here to read and sign Frank McReady's Petition