On October 27 2017, the British Competition and Markets Authority (CMA) announced plans to investigate third-party booking site practices and transparency. The investigation is the result of a year-long study conducted by the CMA that monitored digital comparison tools across a variety of different industries.
But what does this mean for the UK hotels that supply the inventory for these sites?
1. The good news for hoteliers is that it IS good news
The CMA’s decision to investigate the accuracy of booking sites comes at a crucial time for the hotel industry. With hotels becoming increasingly dependent on these third-party booking websites, they are unable to compete directly with the sorts of strong-arm tactics the investigation hopes to uncover.– Kristian Valk, Hotelchamp CEO
The CMA’s probe aims to look at the clarity, accuracy and presentation of information on third party booking sites. This means that tactics like manipulated meta-search rankings, inaccurate discount claims and hidden charges are all under particular scrutiny. This is advantageous for hoteliers as they are usually the tactics which either limit OTA visitors from seeing your hotel, or perhaps lead them to mistakenly believe they will get a better deal through a third party instead of your direct channel.
2. It’s time to focus on your direct channel
This investigation is a real win not only for consumers, but also for the hotels that strive to provide them with legitimate value. By bringing more transparency to the industry, this will allow hoteliers to compete on a more level playing field – offering what is right for the guest, not the middle man.– Kristian Valk, Hotelchamp CEO
The catalyst for this investigation is fundamentally whether consumers are getting the best deal. As Andrea Coscelli, Chief Executive of the CMA, said: "Sites need to give their customers information that is clear, accurate and presented in a way that enables people to choose the best deal for them."
As Coscelli elaborates, it is a popular fiction that this best deal is always offered by the OTA.
“We are concerned that this is not happening and that the information on sites may in fact be making it difficult for people to make the right choice.”
The CMA’s efforts to highlight this misconception presents the golden opportunity for hoteliers to optimise their own direct channels. With guests now more savvy to the fact they should be further investigating the right deal for them, hoteliers should be ready and waiting to present them with the best offer as soon as they hit your direct channel.
By intelligently identifying common details about your website traffic, such as location, browser type or desired dates, hotels can now offer visitors tailored content and deals to convince them to book direct. These relevant offers provide more legitimate value to a guest and firmly demonstrate that they are getting a better deal through your direct channel as opposed to an OTA.
For more information about optimising your direct channel, see Why hotels should invest in direct bookings over OTAs
3. Have your say
With hotels having to pay higher and higher commision rates, it’s inevitable that they’re forced to pass these rising costs onto consumers simply to stay afloat.– Kristian Valk, Hotelchamp CEO
Whilst this investigation is positive news for hoteliers, there is still a long way to go. Hoteliers need to build on this momentum to develop their own channels and decrease their dependence on these third parties. As long as hotels are reliant on OTA bookings, commission will only continue to rise, harming both the hotel and ultimately the guest’s back pocket. Now is the time for hotels to speak up and be heard about how their business been affected by booking site practices, rankings or commissions.
UK Hoteliers can go to the Competition and Markets Authority website to have their say. By using this investigation as a platform for your feedback, hoteliers can forge a more sustainable future for the industry – one where you are back in control of your distribution and revenue.
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