Why Hoteliers Have Turned on Booking.com and Filed a Landmark Lawsuit
For two decades, Booking.com was hailed as the unbeatable ally of hotels worldwide. It offered instant visibility, global reach, and a flood of bookings at the click of a button. But that partnership has soured. Thousands of European hoteliers, backed by national federations and Hotrec—the European umbrella for hospitality associations—have initiated a massive class action against the online travel giant. They demand the return of millions of euros in commissions and accuse Booking.com of abusive practices that turned opportunity into dependency.
The Rise of Commission Dependency
Booking.com’s growth story began in the early 2000s, when independent hotels struggled to attract international guests. By listing on the platform, a small inn in Tuscany could suddenly book rooms from customers across the globe. Yet with that visibility came a steep price:
- Commission Rates up to 30%: Hotels would pay almost a third of their nightly rate to Booking.com for each reservation.
- Rate Parity Clauses: Contracts forbade hotels from offering lower prices on their own websites or through other channels.
This model created a dependency: hoteliers felt they had to accept Booking.com’s terms or risk losing the vast majority of potential guests. Over time, what started as a marketing boost morphed into a near-monopolistic straitjacket.
The EU Court of Justice Smashes the Illusion
Earlier this year, the Court of Justice of the European Union (CJEU) ruled that Booking.com’s rate parity clauses were illegal under EU competition law. According to the judgment:
- Platforms cannot impose terms that prevent suppliers from setting lower prices on independent channels.
- Any agreement restricting price freedom among businesses infringes on the competitive process.
Armed with this landmark decision, Europe’s hoteliers saw their chance. Federalberghi (the Italian hotel federation) and Hotrec quickly mobilised member organisations to prepare a class action suit covering commissions paid from 2004 to 2024.
From Partnership to Courtroom Battle
The class action is unprecedented in scale. Thousands of hotels across Italy, France, Spain and other EU countries have signed up to reclaim unfairly collected fees. Their core arguments include:
- Illegal Contractual Terms: The parity clauses imposed by Booking.com deprived hotels of their right to independently set room prices.
- Excessive Commission Levels: Rates nearing 30% far exceed the typical marketing or distribution costs hotels would pay to other channels.
- Economic Dependency: By dominating the online travel market, Booking.com effectively forced hotels to comply under threat of losing vital bookings.
Legal teams are now estimating that affected hoteliers may be entitled to recover between €500 and €1,000 per room per year in excess commissions—potentially amounting to tens of millions in collective claims.
Why Rate Parity Matters for Consumers and Hoteliers
While hoteliers bear the direct financial burden, travellers are not immune from the effects of parity agreements. Here’s why:
- Higher Room Rates: With no ability to undercut platform prices, hotels must price at or above Booking.com’s level, limiting discounts for direct bookings.
- Reduced Transparency: Guests cannot shop multiple channels to compare genuine rates.
- Innovation Stifled: Hotels lose the freedom to create loyalty programmes or exclusive offers on their own websites.
By challenging these practices, hoteliers seek not only compensation but also a freer, more competitive market that benefits every traveller.
What Happens Next in the Legal Saga?
The class action will proceed under national laws in each participating country. Key milestones include:
- Filing Period: Hotels have until late 2025 to lodge claims for the commission period under review.
- Initial Hearings: Courts will assess whether the parity clauses breach domestic competition codes.
- Potential Appeals: Booking.com may contest rulings, arguing that parity ensures rate integrity across channels.
Industry experts predict a multi-year litigation process, but even the mere threat of huge payouts has already forced Booking.com to reconsider its terms in some markets.
How Hoteliers Can Protect Themselves Today
For hotel owners and managers eager to regain pricing freedom now, these steps are crucial:
- Review Contracts: Scrutinise your agreements with OTA platforms for any parity clauses.
- Diversify Channels: Strengthen direct booking channels—website booking engines, loyalty programmes, social media campaigns.
- Negotiate Commission Rates: Seek to cap fees at reasonable percentages or push for hybrid commission models (e.g., a fixed fee plus performance bonus).
- Educate Staff: Train front-office and sales teams to promote best-price guarantees and highlight direct-booking advantages to guests.
By taking proactive steps, hoteliers can mitigate platform dependency even before legal outcomes are finalised.
The Broader Implications for the Travel Industry
This legal battle underscores a growing tension between digital marketplaces and service providers worldwide. Similar parity clauses have been challenged in other sectors—rental cars, airlines, Amazon resellers—hinting at a broader crackdown on restrictive contracts. For travellers, a more open marketplace could mean better deals and greater transparency. For service providers, the fight signals a potential rebalancing of power away from large platforms to individual businesses.
A New Chapter in Hotel Distribution
The lawsuit against Booking.com marks a pivotal moment for the hospitality industry. If successful, it could:
- Restore hotels’ prerogative to set independent rates and craft unique guest experiences.
- Inspire similar actions against other OTAs enforcing restrictive terms.
- Encourage the development of alternative distribution networks and booking technologies.
As the case unfolds, both hoteliers and travellers will watch closely. The outcome may transform how we book hotel rooms—and redefine the relationship between global platforms and the businesses they serve.