We have a responsibility to our customers to ensure they get the best price, said Booking.com's managing director, Peter Verhoeven, when I asked him why the company would not let its accommodation partners sell cheaper on their own websites.
I joined Mr Verhoeven on a panel at the International Hotel Investment Forum this week (March 7th), along with Expedia's Christopher Michau, Best Western Italy CEO Giovanna Manzi and Bridgestreet CEO Sean Worker to discuss hotels' distribution strategies with OTAs and other partners.
We kicked off by debating a question asking whether old-fashioned thinking about hotels being in competition with OTAs for the customer was a thing of the past. I strongly disagreed with this suggestion, arguing that it did not reflect a single conversation I'd had in the last 12 months, whether with a one-bedroom guesthouse or huge chain.
Yes, the frustrations are different, but they are most certainly not going away. The big chains are furious about appearing below the likes of Booking.com and Hotels.com in the paid-for Google search, while the smaller properties are struggling to stay in business due to the enormous commissions. Meanwhile, the cost of direct marketing continues to go up, making it impossible for anybody to compete who doesn't have the deepest of pockets, only deepening resentment towards the big OTAs.
However, everybody except the OTAs is losing out when it comes to rate parity, despite Mr Verhoeven's comments. As long as The Priceline Group, which owns Booking.com, and Expedia insist that properties give them the same rate as they sell on their own website, customers will simply not get a good deal. Why is that? Because there is no competition.
Booking.com and Expedia tie up the accommodation providers in the name of being fair to their customers, when in reality it's having the opposite effect. How can customers be getting a good deal when the price is the same on almost every website? Getting rid of rate parity would level out the playing field because it would provide an actual variation in pricing. This means the guest would get genuine value.
This is obviously not something that will benefit the 'big two' though, which is why they are so keen to make it sound like they're doing it for their guests.
At Hotel Bonanza, we believe that until there is a real alternative to The Priceline Group and Expedia, nothing will change.