A new law creates carte blanche on room prices but a big legal “grey area” and mounting conflicts between hotels and OTAs.
Some have declared it the equivalent of the French Revolution for hoteliers, while others have called it an all-out war. A new law swept in 9 July means French hoteliers can now advertize lower prices for rooms across all distribution channels—including their own websites—than those offered to online travel agencies.
The French National Assembly brought rate parity to a grinding halt by adopting the final vote, which removes the clauses from contracts between hoteliers and OTAs.
The so-called “Macron law”—named after France’s Minister of Economy, Industry and Digital Affairs, Emmanuel Macron—is designed to invigorate the French economy by removing obstacles to growth and competition. The law states that when entering into contracts with OTAs, “the hotelier is free to consent to any customer discounts or tariff advantage of any kind whatsoever.”
The decision caps off a two-year battle led by AccorHotels and hotel employer union UMIH to remove the so-called “pricing parity clause” enforced by France’s three largest OTAs—Booking.com, Expedia and HRS—which forbid hoteliers to offer lower prices to other online booking firms or undercut the rates on their websites.
HOTREC, the European hospitality association, in a news release described the French vote as “another crucial step for hotels in Europe to regain control over their offer.”
Some 70% of hotel bookings in Europe are made through such online booking platforms, according to the French Competition Authority, which engineered much of the change.
- Read “Rate parity’s legal landscape”
The vote builds on the groundwork laid by the authority in recent months, including the April announcement that Booking.com agreed to remove the parity clause from contracts during the next five years. Under that arrangement, hotel price freedom was only partial, particularly for online sales.
>The announcement included provisions in Sweden and Italy as well, where anti-competition authorities have made similar moves against Expedia.
“With more than 35% and mounting reservations made online, that was giving the jackpot to Booking.com,” the UMIH said in a June news release.
The new law goes much further to enforce rate parity for all distribution channels.
“It is a real revolution that is underway for the French hotel industry and for our customers,” said Roland Héguy, president of UMIH in a news release. “After the decision of the Competition Authority, this vote will contribute to the establishment of a renovated contractual framework to restore conditions of a commercial relationship based on trust between hotels and booking sites in the interest of consumer.”
Read full article at: Hotel News Now
