It’s official: Switzerland has joined the battle for direct bookings. And it’s not just hoteliers, but politicians too.
The long story short: Swiss hoteliers aren’t happy with OTAs, and politicians are starting to fight back; something OTAs aren’t too happy about.
Swiss politicians have stepped forward to take a stand against the overly powerful global Internet platforms – specifically, ones that enforce both incredibly high commissions and restrictive contracts.
Their stance? Bischof (CVP) is out to combat the “OTA stranglehold contracts,” while Semandeni (SP) came forward in support of a commission-free national OTA.
Confused? We’ll help break it down for you.
In Switzerland, 57% of hotel bookings made are direct bookings. However, of the 25% OTA bookings, a massive 70% come from one specific third party: Booking.com.
Factor in the 15% commission Swiss hoteliers face and restrictive contracts from OTAs, and it's no wonder hoteliers are feeling frustrated. Now, just how restrictive are these contracts? Der-Bund’s Stefan Eiselin reveals that these contracts dictate hotels can’t offer discounts even on their own sites.
Yes, you read that right. Hotels can’t offer their own guests special incentives for booking direct.
Two years ago, the Swiss Travel Centre opened Swisshotels.com, their own booking portal created to rival third party giants such as Booking.com and Expedia. Unfortunately, the Swiss site has only received 38,759 bookings in the past year – accounting for a mere 1.5% market share.
While the reasonable 10% commission-based system keeps costs low and also features package deals that third parties typically offer, Swisshotels laments they are still “fighting an army with nothing but toothpicks.”
An understandable statement, given that Booking.com has a marketing budget of $3 billion-plus per year. With such discrepancies only growing between hoteliers and third parties, Switzerland needs a change.
Luckily, Bischof and Semandeni are on the path to direct. These Swiss politicians are taking a stand and dedicate to securing better prices for guests on hotels’ websites, and more diversity in distribution channels.
It's a great place to start, if you ask us.