The European hotel industry is celebrating a huge victory as the European Commission officially blocked Booking Holdings’ acquisition of the Etraveli group. This landmark decision recognizes the detrimental impact the merger would have had on various parts of the tourism ecosystem, particularly the accommodation sector.
HOTREC, a leading organization representing the European hotel sector, sees this decision as a significant step in curbing the immense power of one of the largest online platforms. This power has been affecting the daily operations of tens of thousands of Small and Medium-Sized Enterprises (SMEs) in the hotel industry. If the merger had been approved, Booking could have further strengthened its dominance in the hotel market by cross-selling its different services. According to HOTREC’s distribution study, Booking’s market share in the hotel accommodation market has already increased from 60% in 2013 to a staggering 71% in 2021.
Marie Audren, the Director General of HOTREC, expressed her satisfaction with the European Commission’s decision, stating, “HOTREC has long been raising concerns about Booking’s market power and its impact on European hoteliers. Today’s decision is a clear recognition of those concerns, and we wholeheartedly welcome it. HOTREC will continue to stay vigilant and strongly react to any business decisions that negatively affect SME hotels.”
European hoteliers face daily challenges due to the unfair practices of powerful Online Travel Agents (OTAs). For instance, HOTREC’s distribution study reveals that over half of hoteliers (55%) feel pressured by OTAs to accept their terms and conditions, such as cancellation policies and special discounts, which hotels would otherwise not voluntarily offer.
While today’s decision is a significant win for competition enforcement, HOTREC also highlights the important progress made on the legislative front with the introduction of the Digital Markets Act (DMA). This law represents a crucial milestone for the hotel industry, as it will ban all price parity clauses that prevent hoteliers from offering better prices on their own channels compared to the online platforms. Additionally, the DMA will provide business users with better access to the data generated by their listings.
In July 2023, Booking stated that it does not yet qualify as a gatekeeper under the DMA. HOTREC acknowledges this decision and is closely monitoring the DMA implementation phase and the practices of OTAs towards their business users.
