OTAs seem to be facing controversy left, right and center these days. Booking.com is appealing the courts who turned down their trademark for their name (“too generic”, apparently), and OTAs across the board have been criticized by Britain’s House of Lords for jacking prices up when people view a particular listing multiple times.
Expedia is attempting to change the narrative around booking direct, claiming that hotels will suffer losses in what they call a “short-sighted” strategy. Although their calculations are already being questioned by hoteliers, it remains to be seen whether Expedia’s spin will slow hoteliers’ book direct momentum.
Hyatt has become the most recent big chain to initialized a book direct campaign of their own. They’re openly offering discounted rates for loyalty-club members who book direct via web, mobile app or phone – combining loyalty rewards with direct booking perks.
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A new report has found that OTAs use web cookies data to increase hotel prices for people who have repeatedly visited them or viewed a particular hotel listing multiple times. These results from a House of Lords report have led the upper house’s EU Committee to condemn the online travel industry.
They accuse websites of misleading customers through rigged pricing, fake reviews and doctored search options. It warned that OTAs are offering controversial “personalised” pricing in which information provided, or revealed, by customers is being used to determine an individual price for a particular item or service.
Booking.com has run into a wall trying to get trademarks related to its namesake, and it’s going to court to overturn U.S. Patent and Trademark office decisions.
The USPTO argues that Booking.com is merely descriptive of the travel services that the site offers, so it can’t be trademarked.
In a chart provided to Skift, Expedia lays out what it calls a conservative estimate on how hotel owners would be taking a revenue hit of around 8% because of chains’ decisions to publicly offer hotel loyalty program members lower rates on hotel websites than they give to Expedia, for example.
Cyril Ranque, Expedia Inc.’s president of lodging services, argues that hotel owners didn’t have a say in what he considers the chains’ “short-sighted” and “strange” marketing strategy to emphasize direct bookings at the expense of online travel agency distribution.
Hotel companies have a tortured relationship with OTAs, relying on them but paying commissions of 15 percent or higher. The hotel chains would rather keep that money themselves.
“It costs them less and it gives them a better chance to create a business relationship,” said Henry Harteveldt, of travel consultancy Atmosphere Research Group. “They get our email information and a chance to win our ongoing preference.”