The power of Expedia and Booking.com doesn’t seem to have been dented by the well-publicized competition law changes made in countries across Europe over the past few years.
A new study released by European Union (EU) competition authorities shows that their well-intentioned moves have had a limited impact in the world of online travel agencies and hotels.
Several European countries have attempted to deal with alleged anti-competitive practices employed by the two biggest online travel agencies — Expedia and Booking.com — through various pieces of legislation.
The changes were enacted to try and improve competition by outlawing or restricting parity clauses in contracts between hotels and third parties.
Although individual countries brought the action, both Expedia and Booking.com decided to amend their policies for the whole EU.
In essence this meant that hotels would no longer be forced to give the online travel agency the lowest prices and best availability and would be free to cut better deals elsewhere – apart from on their own websites.
Germany went further still by outlawing Booking.com’s tweak (it is still investigating Expedia), meaning that hotels are actually free to offer the cheapest price direct online.
All this was supposed to invigorate the market by allowing competition to flourish but so far it looks to have had very limited success judging by the study of 16,000 hotels in the 10 Member States, 20 online travel agents, 11 metasearch websites and 19 large hotel chains.
Of those hotels that replied, 47 percent said that they were not aware of the changes brought in by the “big two.” Worse still, of those hotels that were aware, the majority said they had not done anything about it, and only a quarter decided to change their pricing.
Competition authorities just don’t seem to have made as much of an impact as they might have expected and even those hotels that are aware of the loosened pricing rules didn’t seem to have been too bothered.