Are online travel agencies treating us fairly?

By | Category: Travel news
the frustrated traveller, © Dan Sperrin

the frustrated traveller, © Dan Sperrin

Last week a House of Lords Select Committee suggested that the online travel agencies lack accountability and transparency. They further suggested that they should be scrutinised by competition authorities.

In giving evidence to the committee, the British Hospitality Association had complained about the activities of these travel agencies (referred in the trade as OTA’s) and contractual clauses which stop hotels offering lower rates than those on the online booking sites where they are listed. It said that these types of clauses are illegal in France and anti-competitive in Germany where Booking.com and HRS got wrapped over the knuckles by the courts.

Online booking agencies are dominated by just a few players. You might think you see lots of different names when you search online but Priceline – which owns Booking.com, Kayak, Agoda and Travelweb –  has over 50% of the market through its brands. It’s main competitor, Expedia, owns Hotels.com, Hotwire.com, CheapTickets Trivago, Egencia, Venere and Orbitz.

What seems to be happening is that accommodation providers feel they have to be listed with these online sites or lose business to their competitors. Those sites then take up to a quarter of the price you and I pay as commission. And accommodation providers, who sign with these sites, cannot undercut the price the sites advertise. Except that some do and if you ring directly, you might be able to negotiate a rate as Just about Travel pointed out.   Since I wrote that story four years aho, the amount of commission payable  to OTA’s has rise.

It means that we are customer are missing out on potential discounts and are paying more than we need. Last year The Telegraph ran a story that said as much.

Now that TripAdvisor has turned itself into a booking agency – in effect an OTA – it will be even tougher for consumers to find competitive prices.

The committee has also suggested that there should be better guidance on the websites about collecting enquirers and customer data, how it used and held as well as how OTA’s rank accommodation. Are those “recommends” that always come first on a site due to the OTA getting a higher commission or is it advertising under another name?

Finally the committee is recommending that an expert panel be set up to monitor these sites.

But will any of this happen? Will the EU, under whose responsibility most of this falls, do anything? And if it does will we have to wait years and years as has been the case with the new improved directive on package holidays?

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