When planning a city break, modern travelers consider a range of pros and cons. Are the hotels up to standard? Where are the tastiest places to eat? And what exactly is there to do in the city?
25.08.2023 - 13:17 / skift.com / Dennis Schaal / European Commission
There is no doubt that Booking.com is the dominant hotel room seller among online travel agencies in Europe. It is also apparent that the European Commission is acutely focused on limiting Booking’s grip.
But in delaying or potentially scuttling parent company Booking Holdings’ still-pending November 2021 deal to acquire Swedish flights seller Etraveli Group for $1.8 billion, the Commission’s logic appears to be skewed.
With a final decision due by August 30, the Commission issued a statement of objections to the proposed acquisition last month, arguing that the deal could strengthen Amsterdam-based Booking’s position in hotels.
Citing one of its concerns, the Commission said the deal could “strengthen Booking’s dominant position in the hotel OTA [Online Travel Agency] market further, increasing its bargaining position towards hotels and diverting demand from cheaper alternative sales channels. Competition is already limited in the hotel OTA market and Booking appears to be unconstrained by competing OTAs, hotels and end customers.”
Let’s remember that although what is now called Booking Holdings originated in 1996 with Priceline’s Name Your Own Price feature for buying airline tickets, Booking.com long focused solely on accommodations, and only launched its own flights business in 2019.
The basis for the Commission’s concerns is the idea that strengthening Booking.com’s position in flights, which is why the company is trying to acquire Etraveli, would also bolster its ability to sell accommodations, attractions and car rentals.
But this line of reasoning downplays several facts, including:
In fact, it is well-known that people booking a trip, whether it is a flight or a hotel or both, tend to search dozens of travel sites before finalizing their bookings. They might do research on Google, search hotels on Trivago, or go directly to a hotel website to earn or burn some points for the booking.
So would Booking gain a substantial advantage in hotels when someone books a flight on its website or apps? Marginally, at best.
The Commission forecasts that Booking.com would increase its hotel market share in the low single-digits from the acquisition, if it goes through.
But does that number take into account that Booking.com already has a flights business — and that it will continue to build that business regardless of the outcome of the acquisition?
Is virtually any substantial acquisition that would strengthen Booking.com, regardless of how far afield from the hotel sector it might be, now off the table?
That appears to be the logic of the European Commission’s objections.
This could end up in the courts.
When planning a city break, modern travelers consider a range of pros and cons. Are the hotels up to standard? Where are the tastiest places to eat? And what exactly is there to do in the city?
Berlin, Vienna, Venice, Rome, Milan, and Zurich. Is two weeks in Europe enough time to explore all of these cities?
In the face of record hotel rates that continue to grow, coupled with sustained high airline fares, some travelers feel they can no longer take a luxury European vacation. They are wrong.
The European Commission is set to block Booking Holdings’ $1.8 billion deal to acquire Sweden’s eTraveli Group, a critically important transaction that’s been in limbo for nearly two years.
When I planned my two-week backpacking trip through six European cities across four countries in October 2022, the last thing I expected was to be blown away by my budget bookings.
Editors' note: JetBlue provided TPG with a free one-way business-class ticket for the inaugural Paris route. All opinions expressed here are the author's alone and were not subject to review by JetBlue.
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