Hoteliers want to emancipate themselves from Booking.com and Co.

The proportion of hotel room reservations made via online booking platforms is constantly increasing. In 2016, it reached over 27 percent, as the Tourism Institute of the HES-SO University of Applied Sciences in Valais calculated in a study. The three platforms Booking.com, Expedia and HRS dominate the market. Booking.com has secured the lion's share: Around three out of four reservations via online booking platforms are made through this site.

The online platforms benefit from their technological progress and marketing efforts. Hoteliers can therefore hardly afford not to be represented on these platforms. The online giants can therefore enforce their conditions well. According to the industry association Hotelleriesuisse, they are subjugating hotel operators with increasingly restrictive specifications.

Support from parliament

The association describes the so-called narrow price parity clause as particularly problematic: This prohibits hoteliers from offering customers better prices on their own websites than on the booking platforms. On the other hand, hotels are allowed to offer lower prices on other booking platforms, on the phone or to walk-in customers - this broad price parity has been prohibited by the Competition Commission (Weko).

The industry's criticism of the narrow price parity has fallen on receptive ears in Bern. In the last fall session, the parliament instructed the Federal Council with a motion to ban such best price clauses for hotels on booking platforms. In Germany, France, Austria and Italy, the state has already intervened in favor of hotels. "We just want a level playing field," says Christophe Hans, head of economic policy at Hotelleriesuisse. "We have achieved a stage victory," he comments on the parliamentary decision. The Federal Council now has two years to act.

However, the dossier remains controversial in Bern: Opponents of stronger regulation argue that such websites would bring progress for consumers. Proponents, on the other hand, see such clauses as an impediment to healthy competition.

High commissions

But the clause is not the only criticism of the online giants from the side of the hotels: They also complain about excessive commissions and a lack of transparency about the rankings on these platforms, which determine how high up a hotel is listed. Thus, the price watchdog has also taken aim at the online booking platforms.

In September, he initiated proceedings against Booking.com. Previously, during an investigation, he had found evidence of price abuse in the commissions that hotels have to pay. The platform vehemently denies these accusations, saying that rates have not increased since 2010.

According to the HES-SO study, hoteliers paid CHF 152 million in commissions to online booking platforms in 2016, an average of CHF 34,000 per hotel. The amount of the commissions depends on various factors. Flexible marketing champion Booking.com once started as a small start-up, that was in 1996. Since then, the Dutch site has continuously morphed into a digital giant. The group is a true marketing champion, says Roland Schegg, professor at the Institute of Tourism at HES-SO. The platform never stops adapting to customer needs and is constantly evolving.

"We have the impression that Booking is constantly testing changes in certain markets. In this way, they demonstrate immeasurable flexibility," says Hans from Hotelleriesuisse. For example, the platform conducts so-called A/B tests on a daily basis, where it first shows several variants of a property to different users. Then it uses the version that has been best received by customers.

Rethinking necessary

In the eyes of tourism professor Schegg, the adaptation of the legal framework is necessary, but it is not enough for hotels to emancipate themselves. The unstoppable evolution of digitalization also offers new opportunities. Social networks, for example, make it possible to get in touch with customers in a way that was not possible 20 years ago. Some hoteliers have simply outsourced their marketing to Booking.

This strategy is possible, but leads to a loss of independence, says Schegg. At the same time, the hotels would have the chance to build a relationship with the customers, which Booking.com does not have. The hoteliers would have to develop a digital strategy. Collaborations between several players, such as the tourism offices and the large hotel chains, are also conceivable, he says. "You have to continuously innovate on all levels and try to function like a start-up," says Schegg. That hasn't sunk into everyone's heads yet: Many tourism players remain stuck in a traditional pattern, according to Schegg. (Alexandre Beuchat/SDA)