Have hoteliers become free with their prices and distribution? Opinions are divided.
Until July 2015, hoteliers were forced by online agencies to offer the same prices on all online platforms, and even on their own websites. Also, the Competition Authority contacted in 2013 by the hotel unions, joined by AccorHotels, as well as the Macron law promulgated on August 6, 2015, have « rebalanced commercial and partnership relations » between OTAs and hoteliers. In any case, this is what AccorHotels states in its financial report for the first half of 2016. In theory, therefore, accommodation providers are free to charge the rates they wish.
« The pressure is no longer legal, but commercial »
Technology and marketing supplier to independent hotels, Fastbooking, a subsidiary of AccorHotels, however, is not entirely of this opinion. « Most independent hotels are even more respectful of price parity today, which proves the power of Booking and other large online agencies, explains Guillaume de Marcillac, co-CEO of Fastbooking. Before, distribution contracts contained leonine clauses, but hotels retained a certain autonomy. Today, while the clauses have disappeared, OTAs have become more attentive to the practices of hoteliers. And they strongly encourage them to give very attractive prices in exchange for their good positioning. »
A positioning that relies on an algorithm with unknown parameters, such as that of Google, adds Guillaume de Marcillac. “The pressure is no longer legal, but commercial”, especially in a hotel context affected by the attacks, particularly in Paris. “If you don’t play the game with the OTAs, you risk a reframing call, or even being put in the closet”, i.e. a deterioration in the display of prices, confides a major hotel group. “What’s more, you can lose sales,” he admits. Since prices are too high on Expedia or Booking can give the advantage to a competing establishment. And play the game, of course, of the comparators.
Booking satisfied with price developments
« Our robots scan all the prices », underlines Carole Poillerat, spokesperson for the hotel portal HRS, which however believes in a win-win relationship. “We do indeed call when the hotelier does not play the game, but the hotelier remains free from his distribution channels.” « The end of price parity allows us to have real business relationships, with regard to the cost of distribution and return on investment, with an advisory strategy on our part. »
Booking, which accounts for 40% of sales made by OTAs globally according to Phocuswright, is in a similar state of mind. “We had fairly restrictive clauses in the contracts,” commented Carlo Olejniczak, global director of relations with hotel chains for the Priceline. Removing them gave hoteliers the feeling of having the upper hand. But they must remain vigilant, and know which channels they want to work on, to then play competitiveness. » In other words, pay attention to the quality of prices, which has finally improved on Booking, he adds. The balance of power, in favor of the world leader in hotel reservations, is far from neutral. Especially when the economy is so difficult for hosts.
