Two big OTAs have had to bow to rate parity legislation in Europe and allow hotels more control over their own rates. How might this affect vacation rental owners going forward?
Online travel operator (OTA) giants Booking.com and Expedia have had to bow to pressure from hotel industries and competition authorities to change their contracts. Beginning this month, in Sweden, Italy and France the two sites must abandon rate parity and offer more control over the setting of their rates and conditions to hotels using their services.
Although it is still early days, some will see this as a significant indication that for the first time, the big booking sites will not get things all their own way. Instead of calling most of the shots and expecting the hospitality industry to fall into line, the big OTAs may have to develop more even-sided relationships with hotel owners. And, ultimately, with vacation rental owners too.
Different rates can now be offered
Under the new regulations, hotels will no longer be expected to offer the same rates through all booking sites. Instead, they will be able offer different rates to different OTAs, as they choose. And, it seems that they will also be able to offer yet another different rate to direct callers on the phone. Which raises the possibility of guests in the know ringing the hotel and booking direct for a cheaper stay.
Could we then have a world where, if we choose to do our business online, we get full control of the rates and conditions we offer through the booking sites? Let’s not get carried away here. Industry commentators are being unusually cautious. In any event, these rate parity changes apply only to a handful of European countries for the present.
‘These changes — and the fallout — will certainly take years to play out,’ says a recent Skift report.
Vacation rental involvement is not yet clear
The information we have so far only mentions hotels, not vacation rentals, though it seems unlikely that they would be excluded from any legislation.
If, like me, you follow these industry developments on the basis of ‘forewarned is forearmed’, you may want to take a look at the useful FAQs on rate parity on the Skift website.
One thing is for sure. This move is a step in the right direction. And if it leads to more freedom for vacation rental owners and lower commission rates for the booking sites, then I’m all in favour of it!
If this is going anywhere, and it looks as if it might, we’ll keep you posted.