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ALL ABOUT YOU — COMMENT


NOEL JOSEPHIDES chairman, Abta, and chairman, Sunvil


When I started in travel in the early 1970s, life was much simpler. There were scheduled carriers and charter carriers. You went on holiday for one or two weeks. If you wanted three weeks, you had to pay a flight supplement. If you wanted anything really different, then you paid through the nose. Life was simpler for hoteliers, too.


Charter flights would arrive on a fixed day of the week and depart one or two weeks later. Hoteliers gave tour operators a special price and kept some rooms back to sell at ‘rack rates’, which were expensive and never discounted. Hoteliers generally resented tour


operators because they felt they were being screwed down on price. So, when the internet and no-frills carriers came along, hoteliers assumed this would free them from the clutches of the tour operator. They could now market their hotels and clients could contact them directly, simply booking a no-frills flight for whatever duration, to marry up with the rooms.


No longer so reliant on tour


operators, they turned to Expedia and Booking.com. This worked well initially, in spite of the warnings from traditional tour operators. Lately, articles have appeared in the newspapers reflecting hoteliers’ disappointment on how relations with online players are developing. According to The Times, the Bed and Breakfast Association has asked the Competition and Markets Authority to intervene to prevent Booking.com from using its dominant position to ‘bully’ small, independent B&Bs and hotels.


Deep concern Rather unexpectedly, Booking.com has agreed a settlement with


the French, Italian and Swedish authorities, apparently sanctioned by the EU, to prevent hotels from showing lower prices on their own websites than those being featured by Booking.com. The article also says the British Hospitality Association is deeply concerned that online travel agents are ‘stifling’ competition.


The public, of course, has no idea online agents are demanding as much as 30% commission from hoteliers, which smaller properties cannot afford, or indeed that online agents seem to be dictating what hotels can sell their rooms for. The basic problem is that online


travel agents, also partners of sites such as TripAdvisor, are so powerful,


Online agents are so powerful, they


appear above hotel sites on Google. Even the largest groups can’t compete


they appear above the hotels’ own sites in Google rankings. Even the largest hotel groups in the world cannot compete. The public believes it is getting the best deal and that it is accessing the hotels’ own sites. Priceline, Booking.com’s US owner, is said to spend more than $2 billion a year advertising with the likes of Google. In the good old days, tour


operators selling packages did, of course, market holidays where the individual price for the flight, hotel, transfer and hire car was not visible; the few that remain still do so. Tour operators do not compete with hoteliers. They help them market and allow them the freedom to sell the rooms they keep for themselves on an accommodation-only basis. Online travel agents, because they sell only accommodation-only, compete directly with the hotel. This will run and run.


For m re c u wr


r more collumns s by


Noietl Jotens bey Mde , go t travelweekly.co.uk


phiaurseen: o:


30 • travelweekly.co.uk — 7 May 2015


NOEL JOSEPHIDES


Online price debate will run and run


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