When I was reading Financial Times on a British Airways flight last night, there was interesting article about Booking.com reaching an agreement with French, Italian and Swedish authorities regarding price fixing.
The European online booking giant that is owned by Priceline had required hotels to fix their prices so that Booking.com always had lowest prices on its website. The new settlement allows hotels to offer lower prices on other third party sites and over the phone, but not on their own websites. This doesn’t make much sense.
You can access the Financial Times article here (could be behind a paywall depending where you try to access it) of which below is an excerpt:
Booking.com has more than 41 per cent of Europe’s €43.9bn market for air travel and hotel bookings, according to Phocuswright.
Critics said that the ruling would do little to open the way for real competition in a market that has become dominated by Booking.com and Expedia.
“Hotels would have to undercut their own websites and also pay commission to offer a better rate to a smaller online travel agent,” noted Carolyn Jameson, the general counsel of Skyscanner, the price comparison website that has challenged Booking.com and Expedia in the UK.
“It doesn’t help competition and it’s terrible for the consumer — hotels can’t offer them anything but the same price they offer Booking.com. And there are very few rival travel agents in the market,” said Dorian Harris, the chief executive of Skoosh, an online travel agent that brought the first competition complaint in the UK in 2010.
Many don’t realize the size of the Booking.com relative to other hotel distribution channels especially in Europe. It is crazy that hotels are not allowed to offer lower prices on their own websites than those on Booking.com (that usually takes roughly 15% commission).