First consequences of their gatekeeper status and the application of the DMA.

Booking.com has announced that as of July 1, it will remove parity clauses from its contracts that allow properties to offer different rates on their own channels and on the Booking.com platform. This new measure is an update to its contracts with its partners in the European Economic Area in response to the new regulations of the Digital Markets Act (DMA).

With this update, Booking.com's partners will no longer be required to maintain the same rates on both the platform and direct channels. While the company believes that rate parity offers significant benefits to consumers by providing easy and secure access to a variety of options in one place, it has decided to comply with the requirements of the DMA.

After the European Commission (EC) appointed Booking.com as a gatekeeper, forcing it to adjust its business practices. In a statement, the company said: "While we believe that parity provides consistent price benefits for consumers by giving them easy and secure access to a variety of options on the same site, we will comply with our obligations under the DMA. We will continue to invest in products and services that create value for our customers and help them travel and experience the world".

In addition to the changes in the European Economic Area, Booking.com has begun to implement certain specific commitments in Spain in response to the draft decision of the National Commission for Markets and Competition (CNMC). The company has demonstrated its commitment and intention to act ethically while awaiting the CNMC's final decision, at which time it will evaluate its future steps.

The Digital Markets Act is a European Union regulation aimed at overseeing the operations of major digital platforms and promoting a fair and competitive market environment. The removal of the parity clauses marks a significant milestone in the dynamic between Booking.com and its hotel industry partners. The company's next steps will be closely watched by both regulators and the hotel industry.

The European Commission can impose fines of up to 10% of a company's global turnover for failure to comply with its gatekeeper obligations, rising to 20% for repeat offenders. However, in the case of systematic infringements, the Commission has the power to take additional measures, such as forcing the company to sell parts of its business or prohibiting it from acquiring services related to the cause of the infringement.

A respite for hoteliers

The reform of this clause has brought a ray of hope to hoteliers who have been expressing their dissatisfaction with Booking.com's demands for years. In particular, the Spanish Association of Hotel Managers and the Madrid Hotel Association denounced Booking.com for abusive practices, and several hotel managers accused the platform of imposing price parity.

Following these accusations, the CNMC warned that it would impose a fine of 486 million euros on Booking.com for restricting the prices of Spanish hotels. This amount will not be finalized until July, but it is already the highest in the company's history.

To try to alleviate these problems, the Global Reformbnb was created in Barcelona in 2023, an initiative that has already been operating since 2018 in New York, Paris and Tokyo, with the aim of addressing the growth of tourist rentals and the expansion of Airbnb. It is now also defending the interests of hoteliers against major players such as Booking.com and Expedia.

How does the hotel benefit from this new regulation?

Positive differences

New regulations in the area of rate parity offer a number of opportunities for hoteliers looking to optimize their direct channel sales. With the disappearance of restrictions imposed by the popular OTA, hotels can now work harder and better to generate positive rate differentials on their official website.

Discounts and Best Online Price Guarantee without fear

Until now, hoteliers have been reluctant to offer exclusive promotions or very obvious special discounts on their websites for fear of possible retaliation from the OTA, often resorting to promocodes or even hidden offers, if at all. Now, however, they will be able to implement these practices openly and without restrictions, benefiting both their own properties and their guests by fearlessly displaying classic claims such as the famous "Best Price Guarantee".

Improved competitiveness in metasearch engines

In addition, the ability to offer the best rate on the Web will significantly improve a hotel's competitiveness in metasearch engines. This new freedom allows hotels to highlight their most attractive rates and drive more customers to direct booking channels.

Although the implementation of DMA has affected both visibility on metasearch engines and the number of bookings through Google Hotel Ads, now, with the end of Booking's parity clause, hotels will be able to offer their rates more flexibly compared to OTAs..

For example, the new structure makes it possible to offer the reservation at a loyalty price versus the standard cost of the room in an online agency. This is an approach that Paraty Tech has been promoting for a long time, and which is now reinforced by not being subject to guidelines that limit pricing strategies.

More loyalty opportunities

In terms of loyalty, the possibilities have expanded considerably. Many hoteliers tended to offer benefits that were not strictly linked to price, due to the rigid clauses of Booking.com. Now, they will be able to easily create discount programs in their loyalty clubs, implementing levels with economic incentives to encourage repeat business and customer satisfaction.

Offsets: impact on the billboard effect

It is important to note that although the OTA will no longer contractually require price parity, they are likely to apply penalties that will affect the positioning of hotels on their platform: "This will not only affect direct sales through the platform, but also the billboard effect they generate for the hotel's direct channels", explains Daniel Sanchez, Chief Revenue Officer of Paraty Tech. With the intention of further boosting direct sales and conducting a more exhaustive analysis of the market, "using tools such as Price Seeker, our rate shopper, allows hoteliers to monitor the positioning of their establishments in different OTAs, both by comparison and by destination, in order to properly control this variable", adds the CRO.