Research

Dominant platforms like Booking.com have often imposed Price Parity Clauses to prevent lower prices on alternative sales channels. We provide quasi-experimental evidence on the removal of these price restrictions in France in 2015 for three major global hotel groups. Our analysis reveals limited and non-significant price effects for rooms sold through consumer-visible channels, such as hotels’ websites or online travel agencies. However, we document a significant price reduction on sales channels not visible to consumers, such as direct offline bookings. Additionally, we identify a significant shift in the share of bookings from online travel agencies to the hotels’ direct offline channels.

This paper examines the impact of online travel agencies on hotel pricing strategies, consumer behavior, and market dynamics within the hospitality sector. Using channel-level proprietary data from major hotel chains across eight European countries, we adopt a structural approach to estimate demand and supply, and simulate policy counterfactuals. Our findings reveal that online travel agencies expand demand without exerting significant competitive pressure on market prices, due to limited substitutability between sales channels. We assess potential regulatory interventions. A fee cap would benefit hotels in the sample and consumers, while hurting outside competitors. Provisions that facilitate direct communication between hotels and customers, in the spirit of the disintermediation allowed by the DMA, would be successful in shifting some sales from the platform to the hotel website while reducing margins overall.