New opportunities for hotels: more (price) competition without limitations from Booking.com

By Adchieve

09 July 2024

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From 1 July 2024, hotels are able to offer their rooms at a lower price than on Booking.com. This has become possible because Booking.com has removed parity clauses from its contracts with hotels in the European Economic Area. This measure was taken in response to new regulations from the Digital Markets Act (DMA). The DMA is a European law to regulate large digital platforms and promote a fair and competitive market environment. The change means that hotels are now allowed to offer different rates on their own channels and on the Booking.com platform. Booking.com was designated by the European Commission as a 'gatekeeper', meaning it is subject to stricter rules to promote competition and prevent abuse of market power.

What do the changes entail?

Removal of parity clauses: Previously, hotels were obliged to offer the same rates on Booking.com as on their own websites. This clause has now been removed, leaving hotels free to offer lower prices on their own websites.
Improved competition: The change means hotels can now compete directly with Booking.com on price, which is likely to lead to lower room rates for consumers. Hotel prices are expected to fall by 5% to 10%.
More customer data for hotels: Hotels will receive more customer data with direct bookings, enabling them to provide better service and targeted offers.
Impact on Booking.com: While Booking.com will comply with the new regulations, the company may make strategic adjustments such as offering discounts and loyalty programmes to retain customers.

Strategies to benefit from the elimination of parity clauses

Optimise direct sales channels: Hotels should improve their own websites and booking systems to become more attractive for direct bookings. This can be done by offering exclusive promotions and discounts not available on Booking.com.
Expand loyalty programmes: With the new freedom, hotels can develop comprehensive loyalty programmes, offering discounts and other benefits to encourage repeat bookings.
Use of technology: Investing in technology such as rate shoppers and metasearch engines can help hotels keep their prices competitive and better understand how they perform against competitors.
Monitoring and analysing impressions, clicks and conversions: By closely monitoring the performance of their marketing and distribution strategies, hotels can quickly make adjustments to maximise their visibility and conversions.

KPIs to monitor

Direct channel conversion rate: Track how many website visitors actually complete a booking to assess the effectiveness of your direct sales strategies.
Price comparison with your competitor: Ensure your prices remain competitive against similar hotels in your market to remain attractive to potential guests.
Impact on visibility ranking on Booking.com: Regularly check how your hotel ranks in search results on Booking.com and adjust your strategies to improve your position and attract more bookings.

Conclusion

Booking.com 's policy changes, prompted by the Digital Markets Act, offer hotels new opportunities to optimise their pricing strategies and strengthen their direct booking channels. Removing parity clauses gives hotels more freedom and potential to cut costs and improve their competitive position. Hotel marketers should seize this opportunity to adjust their strategies and make the most of the new market dynamics.