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Hotel portals are usually a delightful convenience. You enter the location where you'd like to stay plus how many, add the date and, just like that, you're presented with a broad selection of overnight accommodations. If, however, a handful of portals process 75% of all direct bookings, this can quickly lead to monopoly positions with the potential for abuse. It can even prompt the courts to take action over best price guarantees.
I'll admit it: I like Booking.com because they're masters of exaggeration. They just love to sell (better: procure) and pull out all the stops. Even the most run-down hovel in the middle of nowhere is touted as "Highly sought after, only one more available!" or lined with comments like "Already booked 4 times in the last hour!" and, my personal favorite, "5 persons are currently watching this". The thought of people scrambling to rent a tiny room with a toilet in the hallway housed in a gray prefab definitely brings a smirk to my face. It's obvious they're exaggerating and trying to build up pressure. The same pressure applies in conjunction with the price guarantee that these companies like to advertise. What may sound like a crazy bargain to us customers often turns out to be the opposite.
Let's imagine a hotel that has just made a contract with a portal like Booking.com. The hotel owner knows about the market power of Booking, HRS or Expedia (the big three in the industry) and is hoping for good business. Guaranteed prices are often part of these contracts meaning the hotel cannot rent out rooms for less through other channels (Internet portals, telephone or by word of mouth to walk-in customers). If you know about the irregular occupancy rates of many hotels and add to that the considerable commission fee of 13% that portals like Booking demand, you'll quickly realize that these aren't the best prices per se but the best contractually allowed prices. As punishment, hotels that flout these stipulations end up at the bottom in the list of search results and can forget about future successful transactions with the affected portals. Amazon tried something similar once but quickly backpedaled after strong opposition from the media and the FTC. Booking.com and others use a different approach: they pretend to be small.
When the Swiss parliament recently banned such price clauses in contracts between online booking platforms and hotels, Booking.com gave the impression they were a weekend project between two students rather than a part of the billion dollar US company Priceline. It would have certainly helped them had they adjusted the info on their Internet site that proudly claims they are "one of the largest travel e-commerce companies in the world" with "more than 15,000 employees in 70 countries worldwide" before avidly denying accusations of market domination and of being in a privileged position. 1,500,000 room night reservations every day also doesn't sound like they're just a minor player in the business.
Antitrust commissions have long been familiar with the strategy of playing down one's market relevance which is why legal proceedings are underway in Germany, France, Italy and many smaller countries. So the attempt to put contractual shackles on free businesses through sheer market dominance is met with resistance. What's problematic is that judgments like the one in Switzerland mostly target individual clauses not companies. This means smaller portals will also be unable to work out guaranteed low prices with hotels in the future. The world will surely keep on spinning without best price clauses and the big players will survive, but smaller companies will take a big hit.
In a remarkable reaction to the bill, companies lamented that hotel prices would now skyrocket. Have they thought about who's paying the 13% commission I wonder? It's certainly not the hotel owners who'll likely pass it on to their customers. The companies went on bemoaning the alleged curtailing of commercial freedom - but what about the hotel owners' freedom to set prices without pressure from portals? The idea that prices would now become astronomical is ridiculous. Even without special clauses, customers can easily compare offers including prices and benefits in just seconds. Lobbyists are probably the only people who believe the market cannot exist without quasi-monopolists. I for one won't be able to suppress my laughter should I find that prices have now come down by 13% for some hotels.
What I would like to know: do you use hotel portals to book your overnight stays or do you reject this new type of accommodation service?
An important service which portals serve is simply record keeping. While I often use Airbnb or similar accommodations, when time is premium and individual visits are of short duration I use a service such as trivago to compare portal rates, then select from the rates and providers listed - generally making my selections from only one or two. For example, last month I visited the UK, staying a single night each at over 20 small B&Bs. The logistics of keeping track of these reservations would be overwhelming, not to add finding the records at end of year. I could possibly do this if I were better organized, but I am not. When I have compared direct rates, despite claims, I have universally found them to be actually higher; moreover, the portals make filtering on amenities uniform and immediate, and present secondary information in a generally consistent format (parking, etc) - often difficult to ascertain from diverse website for small vendors. I am not sure that I would actually pay more for these advantages of portals, but I believe that I do not do so.
I am very grateful that at least in the EU, corporations are made to conform to existing law and punished when they don't, even with what is apparently (in a move typical here in America) massive lies by their attorneys.
Here in the U.S., corporations which contribute massively to politicians (and which the Supreme Court has designated as 'people') are encouraged to form monopolies and scam the public in any way they can by a legal system which winks at prosecution possibilities. Shareholder value is everyone's god.
And their massive PR departments are constantly braying about "market forces" and the "free market" and "consolidation which will save consumers millions of dollars!", all of which are complete lies.
America has become a country for, by, and dedicated to corporate greed and profit. Anyone who opposes that is branded a lefty communist.
I've used Booking.com a number of times in the past, under the (obviously mistaken!) impression that I would get the best deal.
Now I know better! In future I shall book direct with the hotel and ask for a discount. Perhaps I'll suggest that the hotel should split the Hotels.com commission with me by offering me a 6.5% discount.
Many thanks for some very useful background information on this, Sven.
How True, Even in Australia we are subjected to the same misguided Bull, Only one left, book now. Do not book. Phone the hotel direct.
much easier, cheaper, and know from the conversation what you actually get. Then arrive at the hotel in plenty of time to make a deal, see the room. Or just move on.
I have used booking for quite a while along with 4 other major sites for booking rooms.
sometimes I just call the motel/hotel and make my own booking for less.
We are becoming slaves to all the clickbait
I stopped using portals when I discovered that they have structured their tax affairs so that they pay no taxes in my country. Don't like people or companies that won't pay their fair share.
In the Western world almost everone is caught in a maelstrom of advertising and online booking.
(Maelstrom: A situation or state of confused movement or violent turmoil.)
Whether one jumps in or backs away from the edge is choice, what are the choices, brainwashing by advertising, laziness, trust in the unknown, recommendations from 'those who know best' or, stop-think-what if...?
I am the latter, I will never trust advertising sales pitches, not for any product, they lack the truth, and as for guarantees, the fine print is indecipherable and in truth, indicates that the buyer is at fault for purchasing the product.
The 'old school' method of manual selection and choosing, buying by dealing and speaking face-to-face, or at least by telephone to a person who probably needs the job instead of pushing 'phone buttons, apps, keyboards, plastic screens and hearing zombie voices to perform actions which human beings are capable of performing normally without stepping into the maelstrom from which escape is nigh on impossible for the current Generation X ....
There was a indigenous booking site in Australia called WOTIF which I trusted and used, it had a unique way of displaying data it listed all the places which fitted your criteria then alongside showed the daily prices for two weeks around your dates. This allowed you to make direct comparisons, unfortunately they have been taken over by Expedia and this is all gone. I now use the portals only to see what's there and then book direct, If somewhere gives me good service I use them next time I visit, I used to travel often for work and built up a good repour with several hotels which still give me special service such as superior rooms and discounts.
We rarely, if ever, use the booking portals. We find them very useful to check prices but then book directly with the hotel of our choice. Invariably we find that the price is cheaper or at least there are free goodies such as free parking ( great in the city), discounted breakfasts etc. All you have to do is ask and say that you don't like the portals and generally nice things happen.
We always book accommodation direct with the Hotel, Motel or Lodge where we intend to stay. We were recently given a 10% discount in the accommodation price because we had booked direct.
I use hotels.com and booking.com. I firstly check across the prices and then ring the hotel directly to check prices. If there is no difference I use Hotels.com because of the reward system. Many times though the direct approach yields a slightly cheaper price so I book that way.
Sometimes the inflexibility of the apps means I have to deal with the hotel directly, eg if I want to book a family trip and want rooms or cabins next to each other I can't do this on the app.
I think it's bad if they are enforcing restrictive practices through their contracts.
RG