Who is Booking.com that we all book our hotels with?;

Travellers love her, hoteliers have a love-hate relationship with her, tour operators fear she will steal their business, airlines, rent a car and tours have found another sales channel, courts around the world have a headache when they hear her name.

Whatever your relationship with Booking.com, one thing is certain: That it is an online, American giant that is constantly growing and conquering «planet travel».

Booking Holdings currently operates in 220 countries through its six core brands Booking.com, Priceline, agoda, Rentalcars.com, KAYAK and OpenTable, which will soon become eight. That's because, in the midst of a pandemic, the company has announced two mammoth acquisitions in just two weeks, spending €2.6 billion and expanding its travel services portfolio.

These are the Swedish ETraveli, which is active in airline ticket booking, and the US-based Getaroom, which has 150 subsidiaries and sells business-to-business hotel rooms. Both acquisitions, worth €1.6 billion and €1 billion respectively, are awaiting regulatory approval.

In 2019, 845 million room nights, 77 million car rental days and 7 million airline tickets were booked through Booking Holdings-owned sites in 2019. The group's revenue that year amounted to $15 billion.

Other «mammoth» acquisitions like Kayak.com in 2013 for $1.8 billion, a year later OpenTable for $2.6 billion, etc.

But who is this company and how did it manage, in the last decade, to sell from its site 28 million accommodation - hotels, villas and houses - millions of airline tickets, car rentals, excursions, etc.?;
Why have thousands of hoteliers, municipalities, governments and protection authorities taken it to court?;
Why do millions of travellers drink water in its name?;

Let's start from the beginning

Who would have thought that the Dutch group in 1996 would have thought that their small start-up in Amsterdam would have grown into one of the world's leading online travel companies.

Its system is simple. It listed hotels from all over Europe on its platform, in a way not very different from its current form, and allowed the traveller to see prices and availability online in any region they wanted to travel to and make a reservation. All that was required, as is still sufficient today, was a simple entry of details and no credit card payment. Payment was made by the customer directly to the hotelier when the stay was completed. Booking agreed a commission with the hotelier, ranging from 15% - 25%.

Travel in Europe and the world was increasing, the internet was becoming a part of people's daily lives, and hotels were starting to build their websites. The internet seemed like the ultimate sales tool, as it turned out to be.

The company was acquired in 2005 by the US-based Priceline for just $133 million.

Registering more and more hotels on its platform was not an easy task, even in countries with a history of tourism like Greece. They had to be photographed, texted and most importantly have their rooms available in real time on the internet.

Booking's salespeople ploughed through towns and villages, even reaching accommodations that were not even connected to the internet, to convince small and large hoteliers alike. Its contracts were described by many as «occupational», since the conditions for double bookings and prices, as well as payment clauses, were particularly harsh for hoteliers. The room rate has always been the ultimate concern for Booking and perhaps the company's «Achilles» heel', which has dragged it to court many times, forcing it to pay large fines.

The - horror - best price clause

A clause - the most important one - in hoteliers« contracts with Booking prohibited them for years from selling cheaper to anyone else than the price it was selling their rooms for. The famous »rate parity" quickly became the fear and terror of hoteliers, who were terrified that another reseller might set a cheaper rate. Booking had a way of checking and the bells were heavy.

It did not take long for the protests, the mass lawsuits, while the competition and protection committees were rather late, since only in 2015 Booking, but also other major online tour operators such as Expedia, abolished the term after pressure and court decisions. Specifically the clauses in their contracts that prevented hotels from advertising lower room rates with other agents or even on their own sites.

Of course, this has whetted the appetite of hoteliers to claim compensation for their lost revenues before 2015. A German Supreme Court ruling, just this May, definitively ruled the best price clause illegal, at least for the German territory.

As D.W. reported at the time, Booking.com claims that since 2015 anyway it has not implemented any «best price clause» to prevent lawsuits for damages. However, it will not avoid a new legal adventure. Already some 2,000 hoteliers have taken legal action in a Berlin court, demanding compensation for the pre-2015 restrictions.

Bells for bad practices

It was only in 2019 that the UK Competition and Markets Authority (CMA) ordered Booking to make changes to some of its practices, such as messaging: «only one room left on our website» that do not give an accurate picture of a hotel's availability, misleading consumers. In addition to Booking, the authority sent warnings to six other online tour operators to make changes to misleading practices by 1 September.

In the summer of 2019, Caribbean hoteliers also threatened Booking with a mass boycott for changing its procurement policy.

The company was targeted by the Municipality of Paris in France in 2019. The case concerned houses rented through the platform as the court found that Booking violated provisions of the French tourism code by deliberately withholding information from the municipality's services, notably the number of rental days of furnished tourist accommodation marketed by Booking. The company paid the municipality a fine of EUR 1.3 million, a very low fine, since Booking eventually communicated the data, but with a delay.

Consumers love Booking

Even many hoteliers who are aware of the commissions that Booking takes from a property when it comes to their own holidays choose to book with them. And it's not just the ease of the process, but more importantly the perks the platform gives you when you're a regular customer. Better room, flexible cancellation policy etc.

And its rating system is another point of pressure for hotels, which often give their best rooms to Booking customers in order to get a good review.

Booking currently spends millions of euros to advertise hotels and services. It comes first in google searches when someone is looking for a place to stay, provides consumer convenience and has 24 hour service.