Good news about Booking.com in South Africa

The Competition Commission and Booking.com have agreed on the steps for the online booking platform to comply with the remedial actions recommended in the Online Intermediation Platforms Market Inquiry report.

Booking.com has committed to addressing the wide and narrow price parity terms in all contracts with accommodation providers and in any criterion relating to participation in its membership programmes.

The Commission explained that the wide price parity clause requires accommodation providers to offer prices that aren’t any higher than other online travel platforms.

The narrow parity clause obligates accommodation providers to offer prices that aren’t higher than their direct online booking channels.

“Removing both these clauses effectively enhances price competition between online travel agents and allows accommodation providers such as hotels and guesthouses to price lower on their own websites for online bookings,” it said.

The Commission added that consumers will also benefit from lower-priced options online, and the changes will allow accommodation providers to improve their direct sales channels.

Booking.com has also committed to establishing a programme to fund initiatives to identify, onboard, promote, and grow accommodation providers, activities, and experiences offered by SMEs owned by historically disadvantaged persons.

“The Commission is pleased with the positive outcome of the extensive consultations with Booking.com and the amicable, collaborative engagements with the platform and its representatives,” it said.

It added that the remedial actions are intended to enable platforms, businesses, and consumers to benefit from greater visibility, more intense competition, a level playing field, and a more inclusive digital economy.

The Competition Commission released its Online Intermediate Platforms Market Inquiry report in July 2023, taking a dim view of Booking.com and other similar platform’s price parity customers.

It said these requirements prevented customers from listing services and products at lower prices on rival sites.

Competition Commission acting deputy commissioner and inquiry chairman James Hodge singled Booking.com in the report. He said the price parity requirements harm consumers and hurt competition.

The Commission also found that Booking.com isn’t sufficiently promoting tourism to historically disadvantaged communities, distorting competition from such communities.

“To address this distortion, it is required to put in place substantial programmes to provide funding of initiatives in the identification, onboarding, promotion and growth of SMEs that are black-owned and/or in black communities on the Booking.com platform,” it said.