Online bookings in turmoil: Switzerland cuts Booking.com commission

• The Swiss Price Commissioner’s bold decision paves the way for regulations on booking platforms across Europe – What it means for hoteliers, tourists, and Booking.com itself

A landmark decision with multiple implications for the global tourism industry was recently made in Switzerland. The Swiss Price Commissioner has decided that Booking.com must reduce the commissions it charges Swiss accommodations by around 25%. The decision, which was based on national legislation to prevent abusive pricing in conditions of limited competition, has already caused tremors in the online travel agencies (OTAs) sector.

Regulatory intervention with spikes

The Swiss Price Authority has described Booking.com’s commissions as excessive, noting that the reduction is “necessary” to provide financial relief to hotels and, by extension, their customers. According to the decision, the platform has three months from the finality of the decision to implement the reduction, which will be valid for at least three years.

The intervention comes after failed negotiations between Booking.com and Swiss hotel associations for a voluntary reduction in charges. The regulation concerns all of Booking.com’s hotel partners in Switzerland, who pay commissions that often exceed 15% per booking.

As a spokesman for the regulator stated, “The aim is to strengthen the competitiveness of Swiss hotels at an international level and reduce the financial pressure on consumers.”

Booking.com’s response: Hard line and appeal

Booking.com reacted immediately, announcing that it intends to appeal to the Swiss Federal Administrative Court within 30 days. A spokesperson said: “Our partners choose to work with us – it is not mandatory. Interfering with a voluntary business model is not fair.”

The statement highlights the long-standing tension between booking platforms and accommodation providers: on the one hand, Booking.com defends its role as a booking engine, on the other, hotels complain about high fees that limit their profit margins.

European pressure and previous examples

The Swiss decision comes at a time of increased scrutiny of Booking.com across Europe. In May 2024, the European Commission labeled the platform a “digital gatekeeper” under the Digital Markets Act, demanding the abolition of so-called “parity clauses” – policies that required hotels not to offer lower prices on other platforms or their own sites.

This was followed in July 2024 by the conviction of Booking.com in Spain, with a mammoth fine of 413.24 million euros, for abusing a dominant position and imposing unfair terms on Spanish hotels.

The message from the regulators is clear: the business model of OTAs is coming under scrutiny, especially when the profit margins of tourism businesses are limited in a highly competitive environment.

What hoteliers say – A major breather for small businesses

According to Professor Jürg Stettler, head of the Institute for Tourism and Mobility at the University of Lucerne, the decision is particularly important for small and medium-sized hotel businesses that rely heavily on their presence on platforms such as Booking.com. “A 15% commission is not small – it significantly affects their profitability,” he notes.

Hotelier Markus Hostettler from Bern said he hoped the decision would serve as a precedent for other platforms such as Expedia and Airbnb. “Maybe it’s time for the other ‘big players’ to review their practices. It’s a strong message that one-sided terms are no longer tolerated,” he said.

Potential Impacts – What it Means for the Market

The Swiss decision could reshape the relationship between OTAs and hoteliers, especially in developed markets. If Booking.com is forced to lower its fees, hotels could offer lower prices to customers or increase their direct bookings.

However, if the company wins the appeal or other platforms do not follow suit, the dynamics may not change immediately. The crucial question is whether national and European regulators will dare to intervene.

In addition, the business model of OTAs may need to be adjusted. If regulatory pressure increases, platforms are likely to turn to other sources of revenue or enhance their services to justify their fees.

Conclusion:

The Swiss decision marks a significant turning point in the debate about the place of OTAs in the tourism ecosystem. Hoteliers are welcoming a much-needed development, while Booking.com faces increasing regulatory pressure across Europe. If other countries follow suit, a new, more balanced digital booking landscape could emerge, to the benefit of both hotels and consumers.

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