Hoteliers accuse Booking.com of...

Hospitality association Hotrec urges authorities to act against leading OTAs

Hoteliers are increasingly reliant on major online travel agencies (OTAs) to fill rooms at the expense of direct distribution – yet, in Europe, half complain of unfair treatment by OTAs, according to a report by European hospitality association Hotrec.

Marie Audren, Hotrec Director General, claimed Booking.com had been “withholding guest data from hotel partners and preventing hotels from offering better prices on their own websites”.

She said: “Hotels face unfair business practices from Booking.com every day – financial loss, operational strain and reputation damage. This must end.”

In the Middle East, although business has slowed as a result of the Israel-Hamas conflict, the region incorporating Turkey and Egypt accounts for 4% of Booking.com's global room nights booked.

The financial implications of relying on OTAs are considerable. OTAs typically charge commissions ranging from 15% to 30% per booking, which can significantly impact hotel profits. As a result, there is a strong incentive for hotels to shift as much traffic as possible to their own websites. However, OTAs are not without their benefits, providing extensive marketing reach and helping fill rooms that might otherwise remain vacant

Hotrec's Hotel Distribution Study 2024, covering more than 3,000 hotels over a period from February to April 2024 in destinations including France, Germany, Italy, Spain, Greece and Turkey, found that 51% of bookings came direct in 2023, on a par with 2019 but down from 58% in 2013. Almost one third (30%) came via OTAs, up from 20% in 2013, with about 15% through the trade, and the remainder via other channels.

Booking.com accounted for 71% of OTA bookings while Expedia Group took 14%. The report concluded that "Booking.com and Expedia dominate the market and control pricing".

The complaints listed in the report were related to OTAs' high commission rates, monopolistic practices, undercutting hotel prices, and offering unauthorised discounts without hotelier consent.

More than two out of five hotels (43%) reported being undercut on price by OTAs, while 16% claimed it happened “frequently”.

Hotrec also recorded “concerns over the fairness and transparency of OTA practices, including reselling from other platforms.”

Hotels also reported “problems contacting OTAs for support”, “poor communication with guests booked through OTAs” and “issues tracking bookings from multiple OTA sources”.

Furthermore, the report found OTA multi-sourcing led to “pricing inconsistencies, booking errors, lack of direct guest contact, poor customer service, financial loss, operational strain and reputation damage”.

Yet almost half the hotels (48%) relied on the OTAs to sell a third or more of their room nights, with smaller hotels the most reliant.

The European Commission (EC) confirmed Booking.com as a ‘gatekeeper’ under the Digital Markets Act (DMA) in May 2024. Parent company Booking Holdings has six months to comply with the DMA and to report on its compliance.

The EC can impose fines of up to 10% of worldwide turnover for non-compliance, and up to 20% in case of repeated infringements as well as additional remedies such as obliging a gatekeeper to sell a business or parts of it.

Margrethe Vestager, EC Executive Vice-President in charge of competition policy said: “Holidaymakers will start benefiting from more choice and hotels will have more business opportunities following our decision.”

The EC last also launched major investigations into Google parent Alphabet and fellow ‘gatekeeper’ platforms Apple and Meta over non-compliance in May 2024. Google is the subject of two investigations, one into whether its search results – including Google Flights and Google Hotels – preference its own services over rivals.

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