MADRID – Hotels and travel sites that refer to booking sites from Google no longer need pay for this. Google offers hotels the option to sell their beds and disconnect from Booking and Expedia for free.
The two major online platforms control 85% of bookings in Europe (Booking 68.4% and Expedia 16.3%) and 50% worldwide. This dominant position allows them to pursue commission policies that hoteliers consider offensive. With Google’s attempt to break the duopoly Booking and Expedia have in Europe, it is causing a stir in the travel industry.
Commissions increased since emergence of OTAs
Newspaper Cinco Dias writes that Ramón Estalella, Secretary General of the Spanish Confederation of Hotels and Tourist Accommodation (Cehat), emphasises commissions charged to hotels have tripled since the emergence of the online agencies. “They say they charge an average of 15%, which is 22% according to our calculations.”
Estalella also stresses that it is unfair to believe that commissions are not modulated based on the size of the hotel. “A hotel that places 100 beds in Booking is not the same as a smaller hotel that does not have a commercial department and outsources these things to Booking. Obviously, the commission cannot be the same,” he says.
Google increasing market share?
Hotel industry sources point out that Google’s move, which allows hotels to boost direct sales through its proprietary platform, is seeking to increase market share with a free offer in the context of a suffering global hotel industry due to a year without income as a result of the corona pandemic.
The ability to reduce reliance on Booking and Expedia while boosting direct sales is a very powerful incentive for major Spanish hotel companies that have long been trying to increase their direct sales.
An example of this is Meliá, the first hotel company in Spain to experience strong growth of its own sales channel in the past four years. The hotel business led by Gabriel Escarrer had sales of €582 million through direct sales in 2019, representing 26.7% of the total, compared to €428 million in 2016.