OTA hotel pricing
The Competition and Markets Authority (CMA) has recently issued a summary of how OTAs can set their hotel prices.
Expedia and Booking.com used to require hotels to guarantee that they would not offer their rooms more cheaply on other OTAs. Since summer 2015, Expedia and Booking.com have changed their policies and no longer impose this requirement.
Expedia and Booking.com also now no longer require hotels to offer them the same or better room availability or conditions as hotels offer to other OTAs.
What does this mean for hotels?
- Hotels can choose to offer a lower price on other OTAs than they offer on Expedia and/or Booking.com
- Hotels can also decide to offer other OTAs better availability or conditions (such as room extras or ‘breakfast included’) than on Expedia and/or Booking.com.
- Expedia and Booking.com have also committed to allow hotels to offer lower prices in “offline” marketing channels than their prices on OTAs (provided that such “offline” rates are not published or marketed online by hotels).
- In other words, hotels can offer any price they wish to customers in person, by telephone, direct email or through private closed-user groups (e.g. hotel loyalty groups).
- However, OTAs, including Expedia and Booking.com, may still have clauses in their contracts which stop hotels charging lower prices on a hotel’s own website than they offer through OTA websites.
- Hotels should be aware of the points above when they are negotiating terms with OTAs
[Source: CMA, 5 July 2017]