What is the challenge?
Online Travel Agents (websites like Expedia, Booking.com etc.) are an incredibly valuable source of bookings for the majority of small hoteliers and B&B’s, however we all know that those bookings come at a cost: With a % of your room rate going to the agent.
For a long time the agents have been demanding “price parity” – meaning you cannot advertise cheaper rates with different websites, and you can’t even advertise a cheaper rate on your own site where you pay 0% commission!
This has been an issue in our industry for some time, all across Europe, and now there is a real head of steam building up for change with a legal challenge in French courts earlier this year pushing the issue further into the limelight.
What’s happened now?
On Friday Expedia have taken the initiative by announcing that they would be waiving their “rate, conditions and availability parity clauses with its hotel partners for a period of five years in line with Clauses 1.1, 1.2 and 2.1 of the formal commitments offered by Booking.com and accepted by the national competition authorities in France, Italy and Sweden in April 2015”.
You can read more about this from Expedia’s press release.
But what does that mean for hotels and B&B’s?
According to an Agreement between Booking.com, Expedia and the Office of Fair Trading:
- You can now charge different rates on different online channels.
- You may also offer a lower rate to repeat customers or to customers that are part of a loyalty program.
So what should you do?
At eviivo we believe the following recommendations are the best course of action right now:
- Stay open to plenty of different online travel agents! – The world of online bookings is changing fast and consolidating, but as a business you do not want to be too reliant on one place for your bookings. You will also need to keep your own website up to date and make sure it’s equipped to take bookings directly.
- Keep your rates the same on all the agency websites you advertise on. Just because you can charge different rates on different websites doesn’t mean you should. By giving the same price to all Agents, you will protect your own margin leaving them to compete with each other and do the best for you at the lowest commission rate.
- Do everything you can to win repeat business through offline means! – After a traveller stays with you once and sees how awesome you are they will want to come back. Make sure they know they can get a better deal if they phone or email you directly or quote a special reference (which you may store on the Guest profile in the eviivo suite) when they book on your website. And remember: Any repeat reservations taken on your website are entirely commission free.
- Keep an eye on our blog for regular updates: Fair pricing is high on the agenda of the European Union and national governments right now so we expect more developments in the future. In fact, only a few weeks ago, the French government ruled in favour of hoteliers, allowing them to offer lower prices on their own website regardless of if they’re for a repeat customer. So, keep an eye on our blog, we will keep you up to date!
At eviivo we can help make taking more online bookings hassle free thanks to our suite of apps. So don’t forget to find out a bit more about us.