‘Highjacking’ names on search engines should be halted, says David Weston.
The relationship between accommodation owners and giant online travel agencies (OTAs) is one of the hottest topics in our industry just now.
The big OTAs undoubtedly offer huge benefits to hotels and B&Bs, helping us to fill our rooms by marketing them globally on user-friendly apps and sites for a known commission rate, payable only when a booking is taken.
However, this great boon has come at a heavy cost – the dominance of the two biggest US OTAs which have 80% of the market, and the consequent reduced margins for accommodation owners, loss of cashflow, soaring cancellation rates and a compromised relationship with their guests.
Profits have taken a big hit for accommodation owners, employers and risk-takers as the online intermediaries grab an ever-larger share of bookings (taking a 15-25% cut on these).
Prices have been driven up for consumers and the OTAs have been hugely enriched.
The big two OTAs are now worth much more than the four biggest global hotel groups combined.
From the small accommodation-owners’ perspective, this loss of control and profitability to the intermediaries has not been the result of free and fair competition.
It has been at least partly driven by (a) some egregiously misleading marketing, (b) restrictive “rate parity” clauses preventing discounting by owners to direct bookers, and (c) the dominance by the OTAs of internet search.
Back in July 2017, the B&B Association filed five formal complaints with the UK competition regulator, the Competition and Markets Authority (CMA), covering those three key areas.
Three of our complaints – on fake ‘discounts’, misleading availability statements and manipulated search rankings – were acted on by the CMA on February 6 this year, when it banned a raft of “misleading” practices by OTAs.
Our first complaint to the CMA had been about ‘rate parity’ clauses, which we still want banned – and I wrote about that issue for Travel Weekly recently, explaining why OTA ‘rate parity’ clauses should be banned.
That leaves our fifth complaint to the CMA from 2017 (also still not addressed) against forced (non-optional contract term) bidding by OTAs on hotel and B&B names on search engines.
This practice enables the OTAs to colonise the top of search listings, even for searches of a hotel or B&B’s own brand/name, without the owner’s express permission.
It is typically bundled with all the other terms and conditions, so non-negotiable.
One of our members, B&B owner Frank McCready, refers to this as ‘highjacking’ another business’s name, or ‘brandjacking’.
He says: “The considerable investment I have made in a website that enables online real-time availability and booking is totally wasted. I am now invisible in web searches – lucky to appear on page ten!”
His requests to the OTA to stop bidding on his name were refused and he was told by Google that only a spend of over £900 per month on pay-per-click would counter the OTA taking top place on Google searches for his B&B’s name.
He has launched a petition on the UK Government and Parliament site to make ‘highjacking’ of a hotel or B&B name on search engines illegal.
We agree that a hotel or B&B should be allowed to say to an OTA, “Yes, we’re happy to deal with you, happy to give you our availability, happy to pay you commission on bookings you bring us. BUT we don’t want you to undermine our own direct marketing by bidding on our own name with search engines”.
That would make competition freer and fairer.
The way to achieve this is for the CMA to ban the OTAs from forcing their name-bidding terms on an accommodation provider.
It must not be a non-negotiable item bundled into the OTA’s terms and conditions on a “take it or leave it” basis as at present. It must be subject to separate, express agreement.
We see this as a modest and reasonable way of redressing the grotesque imbalance of power between global OTAs and family businesses and making competition a little fairer.
Join me in urging the CMA to act. You can sign the petition here.
David Weston is chairman of the Bed & Breakfast Association.
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