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Moving in the right direction: rebalancing the relationship between OTAs and accommodation providers

18 December 2014
18 Dec 2014 -
STAY-WYSEThe STAY WYSE association has welcomed news of the reported offer by Booking.com to abandon the ‘best price’ clause from its agreements with European hotels, seeing it as a positive step towards rebalancing the relationship between online travel agents (OTAs) and accommodation providers.

Competition concerns have been raised about the clause in contracts between Booking.com and hotels that require the hotel to offer Booking.com the same or better room prices as the hotel offers elsewhere. These ‘parity clauses’ have prompted investigations by French, Swedish and Italian competition authorities.

In response to the concerns, Booking.com has proposed to remove the parity clause so far as it extends to other OTAs. The changes would allow hotels to offer different prices to various online travel agents, however the price they give Booking.com must be the same or better than what the hotel offers through its own booking systems.

While it is a shame that the offer appears to have been made to end the competition probes rather than arising from a true belief in a fair market for all, the STAY WYSE association believes it is nevertheless a very positive step towards creating a more level playing field for accommodation providers of all sizes. “It shows that when the industry works as a group, things can change when they are against the true spirit of fair trade” the Board said in a joint statement today.

Nevertheless, still more needs to be done to rebalance the relationship between accommodation providers and OTAs. At the WYSTC Conference in Sydney in 2013, the STAY WYSE association published a declaration with a number of practices aimed at restoring greater market fairness in youth travel accommodation bookings.

While building brand loyalty is ultimately the responsibility of the brand owner, the next logical step in rebalancing the relationship between OTAs and youth travel accommodation providers would be to address the use of third-party brand terms in online advertising. Much of the current marketing research on millennials indicates that they value direct relationships with brands, and there is a desire for source brands to be presented at the top of the search engine hits, rather than having the OTA listing given priority.

Comments on the proposed commitments by Booking.com can be submitted to the relevant national competition authorities until 31 January 2015.