A digital white flag

For the attention of Rutger Prakke, General Counsel and Managing Director at Booking.com

Hi Rutger,

I understand that Kees doesn’t want to reply to me directly but I’m still hoping we can move things forward. I realise this blog makes for rather a public discussion but this is probably as good a place as any for that. The Office of Fair Trading is there to protect the consumer after all.

I’m not sure what I was expecting you to comment to the Sunday Times but certainly not what you did. Just to remind everyone, it was this:

Booking.com’s Rutger Prakke stated that Booking.com would welcome any investigation. “We are not aware of infringing any law and we have not been advised by any regulatory authority that rate parity constitutes anticompetitive behaviour,” said the company’s Rutger Prakke. “It’s a free world and hotels can sign up or sign off with us as they wish.”

You’re a lawyer, I’m not, so I’m not going to even give you my slant on that factor. I’m sure you’ve read all the same legislation that I have in coming to your conclusion that enforcing rate parity is not anti-competitive.

I’m more interested in the effects all this has on the hotel industry which is shaky at the best of times. Whether or not it’s anti-competitive behaviour, what’s the economic argument for Booking.com insisting that no other company is allowed to sell at lower prices than itself? I want Skoosh to determine its own selling prices. I want to price differently for different sales channels, create my own special offers and so on. Shouldn’t I be allowed to? Isn’t that my job as a distributor? Are you saying perhaps that discounting has had its day?

Who benefits economically from rate parity? I don’t see how the hotel benefits. Why is it better for a hotel to have all distributors selling at the same rate? It might sound fair but is it practical? One price for all channels across the whole world sounds a bit broad brush to me. A hotel in the Loire Valley may want to offer a special deal just for Brits on their half term holidays to establish a foothold in this market but they can’t because, under the restriction of price parity, if they offer a deal in the U.K. they have to offer it to everyone else. Has marketing had its day?

Is it good for the consumer even? I know you’re not saying it, but I’ve heard this argument that  consumers get confused if they see different prices for the same product. As far as I’m aware, consumers love price comparison sites. That’s one of the best things about e-commerce to my mind. Why do you want to preclude this or am I missing something?

I’m not judge and jury here. I’m concerned for my business, my industry and ecommerce as a whole. If rate parity is allowed to take hold, I see a time where there is absolutely no discounting online at all. It doesn’t matter where anyone goes to shop for a product, the price will be the same. As I’ve said elsewhere, that all sounds very Cold War to me.

I know it’s challenging to you my putting this out on a blog but I’m not here for the fight. I’m not even here for the justice and recriminations. I just want to get on and run my business. I can’t do that right now because I spend a third of my time dealing with the hotels you’ve asked to call me demanding that Skoosh raises its prices.

I’m putting out the digital white flag to you and asking you politely to stop enforcing rate parity.

Truce?

Cheers,

Dorian
Skoosh

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2 Responses to “A digital white flag”

  1. Peter says:

    I’m putting out the digital white flag to you and asking you politely to stop enforcing rate parity. :-)))
    You are kidding right :-)) You don’t expect Booking or any other OTA stop enforcing contractual terms. Next time ask them for lowering their commission or give you their business 🙂

    You are asking over and over why should you do keep rate parity.
    Here’s one:
    hotels are happy to share with you (and other OTAs) their profits on commissionable basis. When they work on say 20%, you keep those 20% from 100%. If you, as skoosh, will sell the hotel not with 20% commission, but with a 1EUR markup, then the hotel looks bad in front of their customers, who will say – but look here, they sell for this and that much. And you know very well that the best guest for hotel is a direct reservation. With your approach, not any more.
    In short, I would say that you are damaging the business not only for other OTAs, but the most for your “business partners – hotels” – who don’t seem to be so eager about working with you 🙂
    Btw – with how many do you have direct contract???

  2. Dorian says:

    Hi Peter,

    I’d happily reply to any or all of your comments if you say who you are and declare your interests. Your email address looks like it was created just for this post.

    Cheers,

    D

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