End of price parity a major blow for Booking.com

The OTA's European market share will come under pressure, with slower booking growth and higher marketing costs challenging earnings

Booking.com's market dominance in Europe is threatened by new regulations that allow hotel operators to offer lower rates than those listed on the platform. The ban on parity clauses opens up opportunities for direct bookings, supported by metasearch aggregators such as Google.

Key takeaways

• Booking Holdings, a leading European online travel agency, now faces challenges as regulations allow hotels to undercut its platform rates;
• Europe, a key market for Booking, generates significant profits due to market fragmentation and high commission rates from independent hotels;
• With the removal of price parity clauses, metasearch engines will drive more bookings, increasing Booking's marketing costs and squeezing margins;
• Although Booking has performed strongly recently, future earnings growth may slow due to increased competition and rising marketing expenses.

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