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What will Switzerland new rules for hotel booking platforms mean for travellers?

Amanda Previdelli
Amanda Previdelli - [email protected] • 18 Jun, 2022 Updated Sat 18 Jun 2022 08:22 CEST
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A Swiss airlines flight over the Swiss Alps. Photo by Obed Tewes on Unsplash

Hotel booking platforms will face certain restrictions in Switzerland and hotel websites will be able to undercut prices and conditions after a vote in parliament. What does this mean for you?

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Switzerland's Parliament has approved restrictions on online reservation platforms, including Booking.com, Hotels.com and others, looking to protect the Swiss hotel sector.

The new rules ban the so-called "parity clauses" between hotels and booking platforms. This means that hotel websites will be allowed to offer better prices and conditions than those on aggregator websites like Booking.com.

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The rule was much debated, and representatives of the booking platforms have come out against it, saying the move was "shortsighted" and did not benefit the sector. However, the hotel association HotellerieSuisse disagrees, stating the new rules give hotels "their entrepreneurial freedom back".

What are these parity clauses?

Parity clauses are standard in many online reservation platforms and are particularly famous for Booking.com. These websites are extremely popular and have a significant market share, meaning that most travellers book through them instead of the official hotel websites.

READ ALSO: Why Switzerland won't introduce €9 rail tickets like in Germany

In order to be featured in these "hotel Googles", the establishments sign a contract with the website that dictates things like the amount of commission they will pay for the platform. So every time you book a hotel on Booking.com or Trivago, a percentage of the price goes to the website, not the hotel.

This is how they make money, and though some associations complain that fees have been getting way too high, those will remain the same.

The Swiss government saw an issue with the "parity clauses", which, according to legislators, hurt competition.

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These contract clauses force hotels to always be at least in parity with prices and offer on booking websites. This means that they cannot offer cheaper stays or perks like complimentary breakfast to people booking directly on their website - the offer needs to be on par with the one on the booking platform.

What is changing then?

The Swiss Parliament voted to ban those clauses, saying they hurt competition. Hotels will then be allowed to have different (cheaper) offers and services advertised on their websites.

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The ban is enshrined in a new Federal Act against Unfair Competition article.

"Today, hoteliers and hoteliers can finally breathe a sigh of relief. In recent years, they have invested significantly in digitization and expanded their direct booking offer, which will now pay off", said HotellerieSuisse.

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"As soon as the law comes into force, they can offer their guests the best prices on their own portal. In addition to the price, they also get their entrepreneurial freedom back via conditions and availability. They can thus make a differentiated offer."

How do travellers benefit?

People looking for hotels will be able to have more offers. They can search online and check-in many places for different prices and booking conditions.

"It is always an advantage for customers when the competition takes place. Hoteliers must have sovereignty over all rates. Only in this way can they make better offers than the booking platforms," said Andreas Züllig, President of HotellerieSuisse.

READ ALSO: Which flights have SWISS airlines cut ahead of the summer season?

Even if you find a hotel using a booking platform, it will be worth checking out online and seeing if fees and offers on the actual website are different - perhaps better.

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With hotels looking to attract more people to book on their website, where they won't need to pay commissions and fees, chances are that many will take advantage of the parity clause ban.

How is it in other countries?

In many countries, the parity clause still stands, and hotels are forced to keep prices equal or higher than those on the booking platforms.

READ ALSO: Switzerland proposes travellers pay for Covid boosters

However, many Swiss neighbours, including France, Italy and Austria, have already banned the clause. In Germany, court rulings after lawsuits also forbid platforms to force parity from their hotel partners.

"The Parliament's decision, therefore, also eliminates a location disadvantage of the Swiss hotel industry and makes Switzerland a tourism location more competitive in an international context.", added HotellerieSuisse.

 

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Amanda Previdelli 2022/06/18 08:22

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