New regulations
Best price clause could be about to expire – Booking.com is tweaking its pricing model
Tougher rules from the EU competition authorities will apply to the travel platform Booking in the future
© Imago Images
The EU competition watchdogs are targeting the world’s largest hotel portal Booking.com – stricter rules will apply in the future. Hotels can then lure customers to their own websites with discounts. The booking platform is trying to arm itself against this.
The world’s largest hotel booking platform Booking.com has to change its business model due to pressure from EU regulations. “We may have to think about a new pricing model,” says booking boss Glenn Fogel in the Capital interview. “Perhaps in the future we should charge money if hotels want to present their offers to us. Or they should pay for the customer service that we currently offer for free: for translations, for marketing, for financial transactions.” However, the considerations are not yet complete.
The statements show that the Dutch company is being hit hard by a new EU requirement. Europe’s competition watchdogs are targeting the large Internet companies, which they attest to a market-dominant position. In the future, stricter regulations will apply to them, which are regulated in the Digital Markets Act (DMA). In addition to Amazon, Apple, Meta, Microsoft and Alphabet, Booking is also included – as the only European company.
Booking.com fears competitive disadvantage
The voting process for the DMA is ongoing, but Fogel expects it to pass this year. Booking.com, for example, will then have to say goodbye to its controversial best price clause. According to this clause, hotels that offer their rooms on the platform are not yet allowed to sell them cheaper themselves.
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If hotels attract more customers to their own websites with discounts in the future, Booking will lose business. The platform is currently only paid a commission of 15 percent on average when a booking is completed. Competitors such as Expedia or Airbnb are not subject to the new EU rules. “This puts us at a competitive disadvantage,” says Fogel. “This makes business more difficult for us.” In 2023, Booking.com brokered more than a billion overnight stays worth 150 billion US dollars (around 137 million euros).