Booking.com says it will amend its rate parity clauses across Europe by July 1 in line with commitments given to competition authorities in France, Italy and Sweden in April.
The Priceline-owned accommodation giant said in the Spring that it would support changes from the regulators which means, broadly speaking, that Booking can’t ask hotels for the same or lower prices than they offer to other third party distribution channels.
There’s some analysis on the various rulings and potential impact here.
A statement from Booking says it will “abandon its price, availability and booking conditions parity provisions with respect to other online travel agencies”.
It goes on to say that the move will mean “increased transparency and competition among online travel agencies…by encouraging properties to offer different pricing and booking policies” through different OTAs.
Cue even more frenzied shopping around by consumers who at last count were visiting about 20 sites before making a booking?
And, there’s a BUT, as highlighted in April – the “narrow Most Favoured Nation” clause remains meaning it can continue to offer the same or lower rates as on a hotel’s own website.
Booking says this means it can continue to “provide a valuable service to consumers that delivers transparency….and a valuable service to hotels by providing highly cost-effective marketing…”.
We know from quarterly earnings calls that Booking invests a heap of money in marketing and it’s also fair to say it offers a window to the world for hotels in terms of promotion and distribution in places they would not normally be seen.
The statement goes on to talk about the same standard terms for all European partners and it all “helping to build a single European digital economy”.
And, ends with this rallying call from president Gillian Tans as well as the hope of an “industry wide solution”:
“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.”
All this comes at an interesting time, particularly in light of last week’s ruling from the French National Assembly which cancels rate parity clauses.
It effectively tears up previous agreements between booking.com and the French authorities although the practicalities have still to be ironed out.
So, closure or a can of worms?
The French authorities have gone further than other previous rulings although it may take months for the regulation to go into effect.
Questions remain over who and what will be considered as a “reservations platform” within the terms of the ruling.
In addition, fines of up to Euro 150,000 can be imposed but someone will have to police it and rates can be here today, gone tomorrow.
Booking.com could also challenge the ruling and last week predicted a hotel price war as a result because it scraps parity between hotel online and offline channels and OTAs.
Role on the next chapter.
Original article can be read at: Tnooz