Booking: The Gatekeeper that won't Let Go & What Hotels can do about it!

In May 2024, the European Union designated Booking.com as a gatekeeper under the Digital Markets Act (DMA), a move intended to usher in fairer practices and transparency within the digital marketplace. The goal was to address concerns about data sharing, pricing transparency, and the platform’s dominant position over hotel partners. However, nearly half a year down the line, progress has been slower than anticipated, leaving hotels still grappling with many of the same challenges.

Given the current state of play, the big question is, how can hotels compete on a leveled playing field and continue to strengthen their direct business performance? Keep reading to find out.

The Love / Hate Relationship between Booking and Independent Hotels that neccessitated legislative change

Since its inception, Booking.com allowed independent hotels, without brand recognition, to sell rooms on a global digital marketplace. The platform’s broad inventory and growing influence led many consumers to believe that all hotels that matter were listed there, and thus, Booking.com also became a significant source of revenue for hotels. In the years that followed however, this relationship evolved into one of over-dependency for many independent hotels, with 60% to 90% of their bookings coming from Booking and other OTAs.

This heavy reliance left hotels with reduced control over their brand, pricing, and guest relationships. These challenges increased when Booking introduced a number of one-sided policies to their business model - including price parity and not sharing consumer data with their hotel partners in order to continue engaging guests directly.

However, a turning point came for hotels during the pandemic when travel ground to a halt. During this period, independent hotels took it upon themselves to resolve guest issues and provide personalized services. This hands-on support created stronger bonds between guests and hotels, leading to a surge in direct bookings even after OTA operations resumed.

However, Booking.com also faced criticism for issuing mass refunds during the pandemic without the consent of independent hotels, even when guests had accepted credit. This and other historical practices mentioned above, highlighted the imbalance in power dynamics, as hotels had limited control over refund policies and were often left to manage the fallout from cancellations. This further drew attention to Booking.com’s anti-competitive practices, market dominance, and outsized influence over hotels’ pricing autonomy and direct guest relationships, further necessitating regulatory action.

In May 2024, the Digital Markets Act (DMA) introduced new rules aimed at leveling the playing field by requiring Booking.com to share guest data more transparently. However, many hotels still report limited access to this information, hindering their ability to market directly to customers. Research by Hotelier News shows that 40% of European hotels continue to experience pricing disparities, with OTAs undercutting the rates advertised on hotel websites.
Despite the DMA’s objectives, Booking.com’s market dominance remains largely unchallenged, commanding over 71% of the European OTA market in 2024. High commission fees, often exceeding 20%, still pose a significant burden for smaller independent hotels, who struggle to balance the revenue generated by the platform with the operational and financial challenges of their dependency.

How Independent Hotels can Continue Strengthening Direct Performance despite the Slow Pace of Change from Booking.com

Independent hotels that prioritize their direct channels and relationships with guests are in a better position now that Booking.com has been forced to change their policies and level the playing field. Here are the best practices to help your hotel achieve this in light of the current situation:

1. Maximize Direct Bookings by Breaking Price Parity
   Leverage the new terms in the Booking.com contract that allow you to break price parity. By setting competitive rates on your website that differ from those on Booking.com, you can attract price-sensitive travelers directly. Highlight these offers prominently on your site to encourage potential guests to book directly, boosting your revenue and reducing reliance on OTAs.
2. Utilize Google Price Ads and Free Booking Links for Visibility
   Advertise your lowest prices through Google Price Ads and Free Booking Links to enhance your hotel’s visibility in search results. By prominently displaying your best rates, you can capture the attention of potential guests comparing your price with Booking.com’s price. Guests actively seeking deals can then direct them to your website for booking.
3. Demand Guest Data Transparency
   Advocate for increased access to guest data from Booking.com. By encouraging transparency, you can better understand your customers’ preferences and improve your direct marketing strategies. This information is crucial for building personalized guest experiences and fostering direct relationships.
4. Request Clarity on Ranking Changes
   If you notice fluctuations in your ranking on Booking.com, inquire about the reasons behind these changes. Ensure that your standing isn't negatively impacted by pricing alone; it should reflect your overall value proposition and commitment to guest satisfaction.

Conclusion

In light of this changing landscape, hotels have a significant opportunity to enhance their direct performance. They should take advantage of recent developments by demanding compliance from Booking.com on price and guest data transparency while prioritizing the optimization of direct channels for increased bookings. By concentrating on these efforts, independent hotels can build stronger relationships with guests, ultimately driving more direct bookings and improving overall business performance and profits.

About GuestCentric

GuestCentric is a leading provider of cloud-based digital marketing software and services that help extraordinary hoteliers promote their brand, drive direct bookings and connect with customers on all digital platforms. GuestCentric's all-in-one platform provides hotels with the only unified solution for managing their guests' online journey: award-winning, high impact websites; an integrated, easy-to-use booking engine; social media marketing and publishing tools; a GDS chain code and a channel manager to offer rooms on Amadeus, Booking.com, Expedia, Galileo, Google, Sabre, TripAdvisor and hundreds of other channels. GuestCentric is a proud provider of solutions that maximize direct bookings to hotel groups and independent hotels from collections such as Design Hotels, Great Hotels of the World, Leading Hotels of the World, Relais & Chateaux, Small Luxury Hotels and Small Danish Hotels. GuestCentric is featured on Skift Travel Tech 250, a list of the top 250 travel tech companies shaping the modern-day travel experience.

Melissa Rodrigues
Content Manager
+35 196 157 3854
GuestCentric Systems

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