More and more of us are staying home for our holidays — but even so, our small hotels and B&Bs are folding at a scary rate. UK hotel insolvencies are up 60 per cent, it was reported last week. Why? Competition bites, said the papers, blaming Airbnb. But there’s another biter, too — more sinister for seeming more helpful.
The majority of hotel bookings are now made on the internet, and most of those via one of the two enormous internet travel companies: Booking Holdings and Expedia. It might seem to you and me, as we click away the January blues, that there’s a swarm of jostling online travel agencies (or OTAs) — Trivago, Kayak, Agoda, Hotels.com, Priceline — but the reality is that almost all of them belong to, or are ‘affiliate partners’ of, Booking Holdings or Expedia. It’s a near duopoly, and these two tentacular monsters, the giant vampire squids of travel, are beginning to suck the life out of the small fry they claim to help. So yes, competition bites — but a chronic lack of competition bites too.
In the beginning, Booking.com (the larger squid) was a force for good. It took just a 5 per cent commission fee on each room and delivered customers who’d never otherwise have come. Then the commission began to rise: 10 per cent, 15 per cent, these days sometimes as much as 20 per cent — and for what? A hotelier in Cornwall explained his predicament to the BBC: ‘I have a small B&B, which I have owned for three years, and have not yet made a profit, due to Booking.com. I’ve had lots of customers book through them — then, if they cancel, Booking.com still takes the commission from me. If a customer leaves early or leaves without paying, they will not pursue the payment on your behalf.’
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