In our latest blog post, our Dall member – SeekandHit agency summarizes the recent decision by the European Court that prohibits Booking.com from including price parity clauses in its contracts with hotels across the EU. This ruling enables hotels to offer lower prices on their official websites, breaking away from the practice that previously hindered direct bookings. To learn more about how this impacts hotels, and advertisers visit SeekandHit’s blog.
Hotels can now use lower prices as a compelling reason for guests to book directly on their official websites. Previously, with identical pricing on both Booking.com and hotel websites, guests often chose Booking.com due to its brand recognition, loyalty programs, and mobile discounts. This reliance made it difficult for hotels to build their customer databases.
By offering lower prices directly, hotels can attract more guests and diversify their booking channels, reducing their dependence on online travel agencies (OTAs). Direct bookings allow hotels to collect valuable first-party data and improve long-term customer relationships. While advertising costs may initially seem higher compared to Booking.com’s commissions, direct acquisition through paid ads could be more profitable over time due to customer lifetime value.
This ruling presents a unique opportunity for mid-sized and smaller hotels to compete for direct reservations, particularly in cases where large hotel chains may have different agreements with Booking.com. Additionally, the decision could spark changes in advertising strategies, prompting hotels to reinvest in paid campaigns through platforms like Google Ads and Meta Ads.
Key Points:
- Boost to Direct Bookings: Hotels can now offer lower prices on their websites, providing a strong incentive for guests to book directly rather than through Booking.com or other OTAs.
- Advantages for Hotels: By acquiring direct bookings, hotels can build valuable customer databases, leading to better long-term relationships and potentially higher profitability, even if initial ad costs are higher.
- Reduced Dependence on OTAs: Hotels now have the opportunity to diversify their booking channels, avoiding reliance on a single platform like Booking.com, which charges commission on each booking.
- Opportunities for Mid-Sized and Small Hotels: While larger hotel chains may have separate agreements, this ruling offers smaller hotels a unique chance to compete for direct bookings and increase their independence.
- Potential Changes for Advertisers: Hotels may reinvest in paid marketing channels like Google Ads and Meta Ads, where previous campaigns might have been unprofitable due to price parity constraints.
While the full impact of this decision is still uncertain, it presents a significant opportunity for mid-sized and smaller hotels, and advertising agencies. Visit SeekandHit for further insights on how hotels, and advertisers can adapt to these new regulations.
