The recent news that online booking websites are going to be investigated by the Competition and Markets Authority (CMA) is welcome news indeed - and long overdue.
The CMA says it is 'concerned about the clarity, accuracy and presentation of information' on leading websites such as Booking.com, Expedia and Trivago, and that they may be making it 'more difficult' for consumers.
Hotel Bonanza believes that the tactics used by the big online travel agencies are certainly not in the best interests of consumers - or hotels - and here is why.
High commissions Ever increasing commissions are forcing many hotels to put up their prices, meaning their customers pay more. 15% is usually the minimum, but hotels pay as much as 30%. This is forcing many hotels to put up their prices, meaning their customers pay more. The only winners here are the big travel companies.
Premium positioning On top of basic commission, hotels can pay more to appear more prominently in the search results. This means consumers are not necessarily getting what they search for first, they are getting hotels that pay more money and have a high conversion rate, which makes more money for the booking agent. On Booking.com, plenty of its 'preferred partners' have very average review scores. Again, the only winners here are the big travel companies.
Rate parity clauses Although these are being successfully challenged in countries like France and Germany, the majority of hotels in other countries are still forced to agree not to sell any cheaper on their own websites by the likes of Booking.com and Expedia. This means that price competition is almost non-existent and renders price comparison websites like Trivago virtually useless because the prices are pretty much the same. Expedia, one of the companies that asks for rate parity, has a large stake in Trivago. The only winners here? Yes, the big travel companies.
Misleading discounts When you see offers of 70% off of more, it sounds great. What you possibly don't realise is that the 70% off is when you compare the price the hotel was selling at on another day when it was much busier. For example, the price could be 70% less than the hotel was selling at 15 days ago on a Saturday night when there was something going on in the area and there was high demand. Prices that say 70% off make you think you're getting a great deal, but you're actually getting the same deal that is available everywhere else. The only winners here ... yes, you guessed it.
These are just a few of the clever tactics OTAs use to increase the price of online accommodation - and their profits - rather than reduce it. They definitely don't want you to know that though, which is why this investigation is so important.
Hotel Bonanza offers a fairer, cheaper way to book and sell accommodation online. We charge hotels just 8% commission and offer our customers a membership that gives a genuine discount on every booking. We will focus on developing our membership to give our customers even better deals while charging hotels a fair commission. The reality is that both consumers and accommodation providers are being left out of pocket as the big travel companies power on to bigger and bigger profits and it is time that there was an alternative.
Find out more from our video explaining why hotels are being forced to put up their prices.