OTAs move to dominate customer relationships – can it ever be green?

Hotels and B&B’s  scream "Enough" at governments’ anticompetitive OTA sweetheart deal while Tripadvisor extends hold on all destination activities

If destinations are to have any opportunity to make tourism sustainable it needs to be economically sustainable first – with up to 35% cut out by OTAs how can that be?

The battle between destination suppliers hotted up this week as BHA (British Hospitality Association) slammed Booking.com’s deal with the French, Italian and Swedish competition authorities. The deal in effect allows the OTA to enforce rate parity – in other words the lowest price will always be found on the OTA site and the accommodation-provider is powerless to offer lower priced deals direct.

And, on a second front, Tripadvisor moved to capitalize on its $200m purchase of Viator and its $140m of La Fourchette and others. This should allow Tripadvisor to offer not only links to hotel-booking OTAs, but also to tourist attractions, tourist guides, and destination restaurants – effectively lassoing source markets and destinations and putting a paywall between the two.

Hotel and B&B associations are up in arms about the OTAs sweetheart deal with the competition authorities.

Said Jackie Grech, of the BHA: "The industry is deeply concerned that online travel agents (OTAs) are stifling competition through high commissions, rate and service parity, and by manipulating search results and star ratings to attract customers to book the hotels that benefit the OTA’s own commercial interests rather than leaving the choice up to customers."

"Hotels, especially small independents, must either sign-up to sell rooms through OTAs and fork out up to 35% of their total room costs or face invisibility online."

Said David Weston of the B&B Association "The  B&B Association challenges Booking.com to defend how it uses its dominant position in the market to bully small independent B&Bs and hotels, by preventing them offering their best prices on their own websites," says David Weston, Chief Executive of the B&B Association. "We strongly believe that the Competition & Markets Authority should address this gross imbalance of power, returning some from this global giant back to the individual B&B and hotel owners."

Another point that Mr Weston makes refers to the practice of OTAs selling reservations looking as though they were the hotels themselves: "Further, Booking.com, Expedia and other OTAs should not be allowed to "buy" top places on web searches by "bidding" on the names of individual hotels and B&Bs without their permission for pay-per-click search advertising on Google.

And, of course one big green question remains to be answered. How can hotels offer a wholly economically, socially, culturally, environmentally service while they are forced to pay up to 35% to an OTA for access to the market?

Tripadvisor probably think they have the answer with its GreenLeaders scheme.

Valere Tjolle

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