Is Rate Parity Over?

The European Commission has today designated under the Digital Markets Act (DMA), Booking as a gatekeeper for its online intermediation service Booking.com

(May 13th 2024 - https://ec.europa.eu/commission/presscorner/detail/en/ip_24_2561)

Most of our customers are aware of Rate Parity requirements from the OTA's. Some follow the rules slavishly and some go out of their way to offer better rates through their website (and seem to benefit handsomely with Direct Bookings).

To our knowledge Rate Parity was successfully challenged in countries such as Austria and France many years ago, but the OTA's still found other ways to impose this (For example excluding hotels from special marketing programs if they didnt offer rate parity).

Its too early to see what will be the effect of the European Digital Markets Act (DMA), this is what Margrethe Vestager, Executive Vice-President in charge of competition policy said;

Today’s good news is: Holidaymakers will start benefiting from more choice and hotels will have more business opportunities. Following our decision Booking.com joins the list of core platform services required to adhere to DMA rules.

We will wait to see the real results. Interestingly applying the DMA to Google seems to have had a negative effect on Google Hotelads which was a popular way for hotels to bypass high OTA commissions.