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OTA giants working to “kill” competition, Nustay tells regulator

Online booking site Nustay has filed a complaint with the European Union’s antitrust regulator claiming Expedia Group and Booking Holdings are trying to wipe it out.

The Danish start-up, featured in AccomNews last week following operator complaints about its pricing tactics, claims it is being targeted by the big two online travel agents for offering lower prices than those on their own platforms.

It says Booking.com and Expedia are punishing properties that appear on the Nustay site.

Both OTAs have distanced themselves from Nustay, Expedia saying it had terminated its relationship with the company following “a number of complaints from hotels” and Booking.com saying it “does not have any commercial agreement with Nustay” and does not supply the company with rates or listings.

Nustay argues the OTA giants are in breach of competition rules for trying to maintain “artificially high price levels” for hotel rooms – so keeping their commissions high – by preventing Nustay from offering lower prices.

Founded in 2014, Nustay advertises rooms booked at a block rate, as well as direct on-demand booking, in a bid to provide customers with lower prices than those found on rival sites.

It charges lower commissions than the big two OTAs, claiming to deliver better prices for customers but the same earnings for properties.

Operators argue the Danish site routinely lists properties without the owners’ knowledge, and their low pricing then undermines the property’s attempts at maintaining rate parity with the big OTAs, which in turn punish the operators through low quality scores.

Nustay has told the European Union the big OTAs are harming operators’ ability to take bookings by downgrading properties in search rankings for offering lower pricing on a competing website. And it claims hotels, in turn, are pressuring Nustay to raise prices so they don’t lose business on Booking and Expedia.

Bloomberg reports the European Commission has confirmed receipt of Nustay’s complaint and is assessing it.

“We really have the possibility to give a better product to the consumers at a lower price, but we are seeing a tremendous effort from Expedia and Booking.com to kill us before we even get a chance to get a foothold,” Nustay CEO Mathias Lundoe Nielsen said in an interview with the media group.

Lundoe Nielson said Nustay decided to file the complaint to try to get fair terms and “show how big of a problem it actually is”.

The company said its visibility online increased markedly last autumn when Google started including Nustay’s offers in its hotel search alongside Booking.com and Expedia’s pricing. That development also triggered complaints from more than a thousand properties, which urged Nustay to increase their prices after being pressured by Expedia and Booking, Lundoe Nielsen told Bloomberg.

AccomNews was alerted to the company by readers complaining about Nustay offering reduced rates on rooms which were then affecting their price quality scores with the two major OTAs, in turn causing the property’s rooms to be selected for offers such as early payment discounts on those sites.

“The end result of the OTA games/wars is that we are needing to lower our direct booking prices to remain competitive and secure our own bookings,” said one operator.

Another said: “They are underselling our rates on Booking.com and Expedia and as such destroying our quality scores.

“I have been in contact them and they refuse to say where they get their pricing from and refuse to remove my listing… Everyone is listed with them and probably don’t even know they are listed.”

A Europe-wide crackdown has curbed the rate parity demands imposed by the big OTAs on operators in recent years, in a move designed to return a measure of control over pricing to hoteliers.

Now Booking and Expedia have urged the EU to probe how Google shows their sites in travel search results. Margrethe Vestager, the EU’s antitrust chief, has confirmed she is looking at Google’s local search.

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Kate Jackson

Kate Jackson is the editor of Accomnews. You can reach her at any time with questions or submissions: [email protected]

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