Latest news with #rateparity
Yahoo
19 hours ago
- Business
- Yahoo
European hotels sue Booking.com over pricing rules
Hotel associations from more than 25 European countries have initiated a large-scale legal case against online travel platform challenging its use of rate parity clauses that allegedly restricted competition and inflated commission fees. The coordinated lawsuit follows a recent ruling by the European Court of Justice (ECJ) that deemed such clauses unlawful under EU competition law. Since the early 2000s, enforced contractual terms known as rate parity clauses. These provisions prevented hotels from offering lower prices on their own websites or other distribution channels, effectively forcing them to maintain uniform pricing on the platform. Hotels argue this practice limited their autonomy, raised operational costs through higher commissions, and suppressed price competition. The ECJ ruling on 19 September 2024 confirmed that these clauses breached European competition regulations by restricting fair competition and disadvantaging smaller independent hotels. The court found that policies hindered pricing transparency and consumer choice, setting the stage for collective legal action. The lawsuit involves national hotel associations from Austria, Belgium, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, and Switzerland. This broad coalition reflects the extensive impact of the platform's pricing practices across the continent. A dedicated legal body has been established to coordinate the claims, with the Netherlands chosen as the jurisdiction for the centralised proceedings. Eligible hotels that paid commissions to between 2004 and 2024 can join the collective action by registering through a streamlined legal platform. The process aims to reduce litigation costs and facilitate compensation claims for overpaid commission fees plus accrued interest. This legal action highlights growing concerns over the market power of online travel agencies and digital platforms in the hospitality sector. By challenging restrictive pricing clauses, hotels seek to regain control over their pricing strategies and improve competitiveness. Industry representatives emphasise that fair competition among booking channels benefits both consumers and service providers by promoting transparency and innovation. The ECJ decision and subsequent lawsuit may influence other digital marketplaces employing similar pricing restrictions. Regulators across Europe are increasingly scrutinising platform practices to ensure compliance with competition laws and to foster a more balanced digital economy. As the European hospitality industry recovers from recent disruptions, the outcome of this case could set a significant precedent. It underscores the importance of protecting independent businesses against anti-competitive agreements and ensuring fair conditions in online hotel booking markets. "European hotels sue over pricing rules" was originally created and published by Hotel Management Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Travel Daily News
19-05-2025
- Business
- Travel Daily News
Independent hotel rates aggressively targeted by secondary OTAs
Independent hotels pricing above market average face high OTA undercutting, with non-major OTAs showing the most aggressive parity violations. BARCELONA – As hotels continue to refine their revenue strategies, unveils the findings from the latest edition of its World Parity Monitor (WPM) exploring how a hotel's price position relative to its local market average affects OTAs pricing behaviour and rate parity. The April report has identified that when hotel rates are priced above the market average, the Lose rate – the percentage of times a hotel's direct price is undercut by an OTA – increases significantly, especially for independent properties. Non-major OTAs show the most aggressive pricing responses, underscoring the risks of overpricing in competitive environments. Across the sample, 75% of hotels were undercut by at least one OTA, and Expedia surpassed the 20% Lose rate threshold, reversing its recent trend of moderation. From January to April 2025, direct prices rose steadily and ended 6.3% higher than in the same period of 2024 – continuing the upward trajectory already observed last year. This trend reflects a structural pattern, where direct rates start low early in the year and peak around spring, particularly influenced by seasonal events like Easter. Notably, price positioning matters more than ever. While major OTAs like Booking and Expedia maintained stable Lose rates regardless of price segment, non-major OTAs became more aggressive as hotel prices rose. Meanwhile, the direct channel remained more competitive in lower-price segments and saw improved Meet rates at mid-range levels. 'Being just slightly above the average can trigger aggressive responses from OTAs,' says Jordi Serra, CEO at 'Hotels – especially independents – need to keep a close eye on how their positioning aligns with market trends.' 'If I'm an independent hotel and my price is above the market average, I should be concerned about OTAs becoming more aggressive and undercutting my rates. This is a very clear pattern we are seeing month after month.' The WPM also confirms that independent hotels are more vulnerable to parity loss. When priced more than 40% above the market average, the Lose rate reached 41.8% with non-major OTAs, compared to 34.0% with major OTAs. The World Parity Monitor is the first price parity center for the hospitality industry, created by It provides insights into price disparity trends across 3-, 4-, and 5-star hotels in the world's 60 most important tourist month, it analyzes over 5 million comparisons in Google Hotels, using a consistent sample of more than 6,000 hotels. This enables a reliable evaluation of price differences between hotels' direct rates and OTA prices. The WPM includes data segmented by occupancy levels, length of stay, and booking lead time. On the first month of each quarter, the analysis is extended to include country of origin, mobile usage, and family bookings. Month-to-month comparisons use consistent metrics to ensure reliability. Within the framework of the World Parity Monitor, the monthly World Parity Reports are focused digests of the latest pricing behaviors and trends. Methodology: Key Performance Indicators (KPIs) Beat : The hotel's direct price is lower than OTA prices. Meet : The direct and OTA prices are the same or within +/- 0.5%. Lose : The OTA price is lower than the direct rate.
