Hoteliers are increasingly dependent on online travel agents (OTAs) to drive bookings with nearly a quarter of of overnight bookings generated through this channel in 2015.
That’s according to new research from HOTREC – the association for hotels, restaurants and cafes across Europe – based on responses from 2,000 hoteliers across Europe.
It said the OTA market is dominated by three companies, which hold a common market share of 92% – Booking.com, Expedia and HRS, with the first two holding an 80% share.
In parallel to the rise of the share of OTAs in hotel bookings, the share of direct bookings has dropped to 55%.
Christian de Barrin, CEO of HOTREC, said: “The study clearly shows that online platforms are steadily acquiring bigger and bigger shares in hotel bookings, while the hotels’ own distribution channels are on a decline making dependency on OTAs growing.
“The situation is especially critical as it seems that the OTA market tends to become a duopolistic, or even monopolistic, one in Europe, with one player (Booking.com) controlling closely 2/3 of the market.”
The report said despite the introduction of parity clauses in Germany and France last year, which the respective governments expected to increase competition in the OTA market, there has been no “significant movement” in terms of the commission rates paid by hotels to OTAs.
Only 8,5% of hoteliers reported a reduction in commission rates over the past year, while the rest continue paying at least the same rates as before.
Markus Luthe, chair of association’s distribution task force, added: “It is crucial that despite the huge imbalance between the various players the market conditions become more fair and balanced, with the freedom of each and every single hotelier to be able to set their own conditions for their own services freely and be able to fairly negotiate on contract terms and conditions with every distribution partner.”