Consumers and hotels alike will suffer if OTA price parity ends, European association claims
Amid industry-wide backlash against OTA-dominance, the French government has begun to implement a bill that will give hotels the power to control all online pricing but the European Technology and Travel Services Association (ETTSA) has voiced concern.
The bill seeks to end price parity and boost hotel discounts, according to the French Hotels Association, by bringing in a licence for hotels to increase prices.
Secretary General of ETTSA Christoph Klenner, said: “There will be no price competition if hotels determine all prices. Hotels will unfairly favour their own channels for the lowest pricing and availability, which will substantially reduce competition and consumer choice. It will lead to higher prices as there are no incentives for hotels to discount if they can eliminate all competition across distribution channels. Control over pricing and the ability to restrict supply will undoubtedly lead to anti-competitive behaviour.”
He added: “This bill promises to cause a nightmare scenario for online travel agents and hotels who will face huge legal uncertainty because overnight all agreements will have to be re-negotiated. This is an appalling situation for industry and consumers to face on the eve of huge summer bookings. Consumers may find that their ability to book French hotels online has suddenly vanished, seemingly without explanation.”
The scenario will prove an interesting one to follow as Australian providers continue to look for a way to overcome contentious relationships with their OTAs.
ETTSA also said in a statement last week: “Online travel agents created a revolution in opening global markets to hotels without them having to make any investment in innovation or capability. Hotels are now seeking to free-ride on OTA investments and legislate their pricing under the pretence that this will increase competition. It will lead to less investment in innovation by OTAs, and therefore less visibility for independent hotels in particular.”
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