back to article European Commish asks for rivals' moans about Booking.com

Rivals of Booking.com have been invited to have their say over alleged anti-competitive contracts imposed by the online travel agent. Following complaints in France, Italy and Sweden, the European Commission is co-ordinating a public consultation on the matter. Booking.com imposes so-called “parity clauses” in contracts with …

  1. Arion

    So... how exactly do parity clauses harm competition? It would seem to me that others can compete, so long as they do so on a level playing field.

    1. CM

      Booking.com charges 15% (a hotelier complained it jumped frrom 10%). The hotel could offer the room for less and come out ahead except for the same-price rule. That suits booking com as they know you won't do better elsewhere. Stifles other booking services who might decide to reduce their cut to 5% for example.

      1. gerryg

        except, of course

        These hotels are not compelled to work with Booking.com Similarly they are not compelled to accept American Express with their higher charges. Many still do for other reasons.

        How much advertising does a hotel not have to do as a result of these services?

        If someone can do it better for less don't use Booking.com

        If a hotel wants an alternative, use kick starter to help fund it. Find all the other hotels that want to work with you. Find out how much money and effort that will take.

        1. DavCrav Silver badge

          Re: except, of course: WHAT IS WRONG WITH YOU PEOPLE?!?!?one?!

          Sorry for the shouting, but this:

          "These hotels are not compelled to work with Booking.com Similarly they are not compelled to accept American Express with their higher charges. Many still do for other reasons."

          For the love of God, how long is it going to take for the phrase "market dominance" to actually become something people understand, like "toaster" or "buy one get one free"? If all the customers are on Booking, you have to go there, or you die. See, for example, Amazon, Google, etc.

          1. gerryg

            Re: except, of course: WHAT IS WRONG WITH YOU PEOPLE?!?!?one?!

            While we're busy loving god, "market dominance"? What happened to Kodak?, buggy whip manufacturers etc?

            Then there's James Dyson and vacuum cleaners.

            Look how the world is (slowly, admitly) moving away from Microsoft, previously IBM

            People dominate markets because they are good, people abuse market dominance because they are bad in all senses of the word

            1. big_D Silver badge

              Re: except, of course: WHAT IS WRONG WITH YOU PEOPLE?!?!?one?!

              And don't forget, Apple just got an a**e whipping for doing exactly the same thin to the eBook market.

              1. The First Dave

                Re: except, of course: WHAT IS WRONG WITH YOU PEOPLE?!?!?one?!

                "don't forget, Apple just got an a**e whipping for doing exactly the same thin to the eBook market."

                No, it got punished for trying to beat Amazon (the _actual_ dominant player) at their own game. Still don't understand how they lost that one.

                1. big_D Silver badge

                  Re: except, of course: WHAT IS WRONG WITH YOU PEOPLE?!?!?one?!

                  Because they thought price fixing was okay?

            2. DavCrav Silver badge

              Re: except, of course: WHAT IS WRONG WITH YOU PEOPLE?!?!?one?!

              "While we're busy loving god, "market dominance"? What happened to Kodak?, buggy whip manufacturers etc?

              Then there's James Dyson and vacuum cleaners.

              Look how the world is (slowly, admitly) moving away from Microsoft, previously IBM

              People dominate markets because they are good, people abuse market dominance because they are bad in all senses of the word"

              OK, how does that have any bearing on what I said? Market dominance is a concept that means you cannot screw people around once you have it.

      2. Anonymous Coward
        Anonymous Coward

        That 10-15%, whatever it might be, has to be offset against whatever marketing costs the hotel would have to swallow in order to get the customer to come directly to them. People get in a hell of a tizzy about price comparison sites charging commission, but they're basically acting as marketing departments for each of the companies they present prices for, and marketing always has to be paid for somehow.

    2. zanderman

      Rigged playing field

      The playing field isn't level. Booking.com has all the money in the world to pay for advertising (they're Google's biggest advertising partner) and they pay it in the confident knowledge that they're not being undercut. It's a rigged playing field and wholly uninviting to competition.

  2. Neil Barnes Silver badge

    Am I alone

    In generally preferring to deal directly with the hotel, or at least the chain?

    1. JimmyPage
      Stop

      Re: Am I alone

      possibly yes ... the pixie dust booking.com (other travel sites are available) brings to the mix is the social - reviews and other information, which over time can be considered fairly trustworthy.

      Travelling can be stressful enough. Start adding in another country, flying, different cultures and languages, and you might be happy to pay x% to somewhere like booking.com, if you trust the reviews. You also get the ability to comment on your own experiences.

      1. Tom Wood

        Re: Am I alone

        The point though is that you (as customer) don't pay 15% to Booking.com for the "service", the hotel does, and the contract with Booking.com prevents the hotel from recouping that cost by charging more through Booking.com than they do direct.

        Booking.com then do things like buy Google search ads with the hotel's name so that when you search for the hotel's name, the first thing you see is a Booking.com link promising the same rates as if you booked direct with the hotel, above the link to the hotel's own website in the search results.

        So, the hotel loses direct bookings (which could otherwise have been cheaper for the customer), and Booking.com makes a comparative killing, for doing very little.

        1. Anonymous Coward
          Anonymous Coward

          Re: Am I alone

          The key word here is 'could' - but they don't

          I book hotels quite often and I have yet to find a hotel that offers me the cheapest price booking direct.

          Recent example - The Marriot near Preston for the company Christmas party

          Direct - £130

          Corporate 'discounted' rate for the party - £80

          Booking.com rate £60

          I have found this time & time again. If the hotels would offer me a competative rate I'd be happy to book direct, however I'll always go for the cheaper option

          1. Tom Wood

            Re: Am I alone

            In the case of big chains like Marriott, especially in "business" locations like Preston (when was the last time you went on holiday to Preston?) the dynamic is different. They use different pricing to segment their target market.

            They know that the many of the people booking direct with them are using corporate rates and corporate credit cards and by booking direct they can collect reward points. They're not paying the bill so don't have to worry about getting the absolute cheapest price.

            Those who book the Marriott through Booking.com will be the few leisure travellers who are visiting friends nearby or something who are after a good rate. If the Marriott have rooms free, they can afford to cut their margins and pay the 15% and still sell to these people through channels like Booking.com. (Besides which, they will probably make money back selling breakfast and drinks and so on, on which Booking.com won't take a cut).

            It's a different game with smaller independent hotels, who don't have corporate accounts and rely on leisure travellers for most of their business.

        2. gerryg

          Interflora

          If that is what Booking.com are doing, without the permission of the hotel then this legal case concerning keywords is timely and relevant.

    2. Voland's right hand Silver badge

      Re: Am I alone

      Once you have established that the chain/hotel is OK - yes.

      If you are going into unknown territory, Booking.com is the best choice out there. It is not rigged like yelp or tripadvisor, the review score + review contents are a fairly good gauge on what you are going to get. It is a quantum leap compared to Opodo, Xpedia and any other of the hotel brokers that predated them. You can find hotels even in the most remote backwater too.

      There is a reason why they have become a near monopoly - they deliver something which the customer likes (and the hotels not so much). As far as price parity - Amazon does the same by the way. It is the same conditions as the Amazon marketplace. There is a way around it too - loyalty rebates (though trowing an Eu competition sueball seems to be easier).

    3. Kubla Cant Silver badge
      WTF?

      Re: Am I alone

      Am I alone in that I make a practice of checking several booking sites when I'm looking for a hotel? I'm slightly surprised to learn that booking.com is dominant, because I've rarely found their offer the most attractive.

  3. Busby

    I still don't understand why these clauses are allowed to exist as to me they can be interpreted as price fixing.

    Doesn't matter if it's Amazon with ebooks or booking.com with hotel room the only reason they exist is to limit competition and make sure the middle man takes theire cut.

    1. Ossi

      What's wrong with middlemen? Why shouldn't they get paid for their services? As a number of people here point out, you could just contact the hotel directly, but people still choose to use them, so they must be providing a useful service.

  4. gerryg

    Invaluable

    Without Booking.com quite a few hotels and B&Bs would not have got my business. 85% of nothing is nothing.

    I choose location within city, level of quality of room and then price. Booking.com helps me find "the one". Of course all this information empowers the consumer. Competition is thwarted by information asymmetry and the consumer is usually on the wrong side of the information asymmetry problem.

    And let's look at who is complaining.

    1. VinceH

      Re: Invaluable

      "Without Booking.com quite a few hotels and B&Bs would not have got my business. 85% of nothing is nothing."

      I usually start a search on booking.com* - but once I find somewhere that seems like a good choice, I then search elsewhere, and if I find it for the same price (be that direct, or another website) it gets booked that way.

      However, I do this because I had a client that used booking.com, so I was already aware of (and disapproving of) booking.com's terms. To the average punter, though, what you say above probably applies in spades.

      * I sometimes also search by wandering around the area using Google's StreetView. If I spot a suitable hotel or B&B, I then search for it 'properly'.

  5. Ossi

    The parity clause is not obviously anticompetitive. If hotels were able to charge less on their own site, they would always have an incentive to do so. Once word got round that this was happening booking.com (and all other comparison sites) would be finished, as people would looking for a hotel on the comparison site, and then go to the hotel site to book. Having no comparison sites is not good for competition or choice.

    However, it would be better if there were competition amongst comparison sites. Hotels should be able to offer different deals to different comparison sites (which would likely simply reflect the different charges - they wouldn't have any other incentive to offer different prices). In other words, booking.com's proposed solution seems like a fair one.

  6. Stretch

    Use the comparison sites but ALWAYS call direct. You'll get better deals, less hassle and less spam.

  7. Andrew Moore

    That explains it...

    I was wondering why hotels were giving me better prices over the phone than on their websites- no overview by reseller websites.

  8. Anonymous Coward
    Anonymous Coward

    Please El Reg, I beg you...

    Remove the frickin' stupidly large stock photos from the top of every story. They are crap!

    1. Thunderbird 2

      Re: Please El Reg, I beg you...

      you could add something like

      www.theregister.co.uk##.article_head

      to your ABP filters

    2. Anonymous Coward
      Anonymous Coward

      Re: Please El Reg, I beg you...

      Yes, photos only when they add something to the story. Otherwise they are just adding unnecessary scrolling.

  9. zanderman

    Negotiating with terrorists

    These competition cases are perverse.

    10 European competition authorities have found that Booking.com has been distorting the price for hotel rooms by precluding competitors, and hotels themselves, from lowering their margins and offering better prices than Booking.com.

    If that's a problem, you'd expect the competition authorities to tell Booking.com to stop tampering with the market, and even fine them for doing so. Instead, Booking.com has come back with a proposal to tamper less.

    This begs the question, why is Booking.com in the position to dictate any terms?

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