HOTREC Study Reveals Need for Digital Reform in Euro Hotel Sector

A recent study by HOTREC indicates a pressing need to implement the Digital Markets Act (DMA) to ensure fairer practices in Europe’s hotel industry. The 2024 Hotel Distribution Study focuses on developments in the European accommodation sector, shedding light on how consumers book hotel rooms and the rising dominance of Online Travel Agencies (OTAs).

The study reveals that key players in the hotel industry have expressed concerns over unfair business practices by OTAs, particularly Booking.com, which holds a significant market share. These practices have reportedly created issues that affect prices, operations, and guest experiences.

The DMA, which has designated Booking.com as a gatekeeper platform, imposes new digital rules that the OTA must adhere to. These rules are expected to allow hotels to offer better prices on their own distribution channels, thereby creating a level playing field for competition.

The study emphasizes the growing influence of OTAs like Booking.com, which has seen a 10% increase in market share in the European hotel sector over the past decade. Simultaneously, direct bookings continue to decrease. The reliance on OTAs has become especially prominent for smaller hotels with fewer rooms.

Booking.com and Expedia Group have emerged as dominant players in the hotel accommodation market, with Booking.com holding a 71% share in the OTA market. The study also reveals that OTAs undercut prices set by hotels in 40% of cases, creating operational challenges for hoteliers.

Digitalization in the European hotel industry is also on the rise, as reflected by the steady shift to direct online bookings. Electronic distribution, which includes OTAs, social media, and internet booking engines on hotel websites, now represents 45% of overnight stays booked via online channels.

In response to the study’s findings, HOTREC Director General Marie Audren expressed that the DMA and fair digital rules are crucial first steps in addressing the unfair business practices faced by hotels. The DMA is expected to help resolve issues such as withholding guest data and preventing hotels from offering better prices on their own websites.

HOTREC conducted the study in collaboration with the University of Applied Sciences of Western Switzerland Valais at the start of 2024, monitoring the evolution of distribution channels of European hotels with a specific focus on OTAs. The study, based on observations of over 3000 hotels across Europe, shows a high dependency of hotels on OTAs and is available at HOTREC.