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Following news that the CMA is to investigate hotel booking sites, the story has been greeted with an air of scepticism and delight amongst the independent hospitality industry in the UK.
For the past decade now, hotel owners have seen a dramatic rise in how their guests make bookings; the smaller businesses have been powerless to compete with the spending powers of the Expedia and Priceline Groups.
The typical response I get when speaking to hospitality owners has been, “better the devil you know”, which is worryingly accurate.
In a recent study amongst hospitality businesses on the Yorkshire Coast, there was an estimated £1m spent on commission costs to the online travel agents every month.
Consumers don’t just want the best rates now, they demand it, and the hotel booking sites know this. This demand is why these sites have come under the spotlight recently, due to overzealous selling tactics.
Consumers also want a simple booking process. For example, when they start their search for a hotel most of the time they begin by doing a Google search.
The hospitality owners I chatted with don’t have an issue with the online travel agents spending money on search terms such as “Hotels in Filey”. Where they draw the line, however, is when OTAs start to bid on its brand name.
As the example shows below, when you search for a particular property, Expedia have bid on its brand name and have appeared above the property in question in the search results.
If you note as well, in the description, it is telling the potential customer that “Expedia guarantees the best price”.
I doubt that the CMA will take any intense action on the online booking websites but I do wish that people will contact the CMA and share their experiences
Also, what I have noticed is the public response to the investigation. I watched with interest on 27 October – when the news broke – how people responded on social media. They were publicly sharing their experiences about booking with the online travel agents, sharing posts and I even saw #BookDirect trending in some areas.
Maybe the fall out of all of this will be that the CMA doesn’t act, but the public will become more aware of OTAs dodgy and overzealous tactics.
Is this the beginning of the end for the online travel agents? Who knows? But one thing is for sure, the general public is on to them and knows it definitely pays to book direct.
By Mark Simpson, independent hospitality consultant
