New EU legislation regulates price clauses for online giants such as Booking.com and Google. Learn more about the new EU regulations on online hotel booking sites.
After a group of friends didn’t show for a 2019 hotel reservation in Germany, the hotel charged them for their booking. They argued the German wording didn’t make it clear that they were obliged to pay.
Following dialogue with the European Commission and national consumer authorities, Booking.com has committed to make changes in the way it presents offers, discounts and prices to consumers. Once these new changes are fully applied by Booking, consumers should be better able to make informed comparisons in line with the requirements of EU consumer law.
With increased digitization and e-commerce, online travel giants, so-called OTAs, gained enormous market power globally. Also in Scandinavia, an increasing proportion of hotel bookings are made with players such as booking.com or hotels.com.
Didier Reynders, Commissioner for Justice and Consumers, said: “All companies must meet our high consumer law standards if they want to do business in the EU. As a market leader, it is vital that companies like Booking.com meet their responsibilities in this area, ensuring that online accommodation reservation systems are free from manipulative techniques such as hiding sponsoring in ranking, unduly putting time pressure on users or misrepresenting rebates. The European Commission and national consumer authorities will continue to monitor all online travel platforms to ensure a fair online environment for consumers.”
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The EU’s top court says that online hotel systems must have “easily legible and unambiguous” reservation buttons if customers are on the hook for charges.
In a case referred to the European Court of Justice by a German court, the unnamed defendant argued that it wasn’t obvious on the German website for Booking.com that he was required to pay for his four hotel rooms after he didn’t show up for his holiday because the wording of the button was imprecise.
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OTAs do not own any tourism products themselves. They are only an intermediary between hotels / restaurants / activity organizers and the customer and are therefore often referred to as third-party players. And the largest are defined as gatekeepers. Now EUs wants to regulate these as follows:
Make clear to consumers that any statement such as “last room available!” refers only to the offer on the Booking.com platform;
Not present an offer as being time-limited if the same price will still be available afterwards;
Clarify how results are ranked and, whether payments made by the accommodation provider to the OTA have influenced its position in the list of results;
Ensure that it is clear when a price comparison is based on different circumstances (e.g. stay dates) and not present that comparison as a discount;
Ensure that price comparisons presented as discounts represent genuine savings, e.g. by providing details about the Standard Rate price taken as a reference;
Display the total price that the consumers will have to pay (including all unavoidable charges, fees and taxes that can reasonably be calculated in advance) in a clear and prominent way;
Present sold-out accommodation in a position in the search results that is appropriate to the search criteria;
Clearly indicate whether an accommodation is offered by a private host or a professional.
EU legislators have agreed to introduce a ban on the OTAs price parity clauses in the hotels’ contracts. These are clauses that refuse hotels to sell hotel rooms through their own channels, such as the hotel’s own website, at a lower price than the OTAs charge for the same rooms. This fight has been going on for many years and the clauses have been the subject of lawsuits in many countries.
New EU Regulations on Online Hotel Booking Sites, written by Tor Kjolberg