Booking.com has ordered hotels to remove a widget that displays its rates for the property alongside other online travel agencies.
A letter sent to hoteliers which have installed the Price Check widget provided by Triptease have been told they have until the end of this week (November 27) to remove the feature or ensure Booking.com's branding and rates do not appear.
Triptease's Price Check widget works by sitting on the result pages of hotel websites, and kicks into action by showing the price for a room at the property at three OTAs.
The idea is that the consumer will see a demonstration "that the price is fair" and potentially book direct with the hotel if it sees that the price is cheaper than on the large OTAs.
Triptease, which took $2 million in funding earlier this year from Episode 1 Ventures and Notion Capital, claims the tool can increase direct hotel bookings by up to 35%.
The Priceline Group-owned hotel booking service says Triptease is "unlawfully accessing" data to collate the information provided on the widget.
Furthermore, it also points out that by showing the data, which it says is "often misleading, inaccurate and misrepresents the prices and availability being for rooms at your hotel on Booking.com", hotels could be in breach of advertising regulations in the European Union and elsewhere around the world.
The company has instructed its lawyers to pursue the matter with Triptease and says it will also be taking legal action against hoteliers as each will then be considered in breach of their contracts with Booking.com.
Booking.com has declined to comment on any aspect of the story.
The letter in full reads:
Dear Partner,
At Booking.com we pride ourselves in conducting our business in an ethical matter. This business conduct is throughout our business including the respect we take in our accommodation partnership agreements through to the display of all types of information towards our growing new and existing customer base.
It is our belief that we should achieve the right results the right way.
We understand that you are currently making use of a TripTease 'Price Check Widget' on your website.
We believe that TripTease is unlawfully accessing Booking.com’s data in order to collate the Booking.com information shown by the widget. Moreover, we wanted to make you aware that the Booking.com price and availability information shown by the widget is often misleading, inaccurate and misrepresents the prices and availability being offered for rooms at your hotel on Booking.com.
As you will know, misleading comparative advertising is a breach of European law in the European Union and in many other jurisdictions around the world.
We have instructed our external lawyers to pursue this matter with TripTease. We are prepared to take whatever action is necessary to protect Booking.com, our reputation and our data. For the avoidance of doubt, this includes taking legal action against our Partners to the extent they are in breach of their contracts with us – although we hope that will not be necessary.
In some cases, the TripTease widget suggests that the price of booking a room direct is cheaper than the price offered through Booking.com. As you know, pursuant to your contract with us, you are required to provide Booking.com with parity in respect of the prices for your rooms. If you are not currently providing Booking.com with the correct prices in accordance with your contract, we ask that you do so immediately.
If you are providing us with the correct prices, it may be that the widget is simply not capable of making the correct price comparison and is therefore failing to show an accurate price for the comparable reservation with Booking.com. Nevertheless, by displaying any such inaccurate prices on your website, you are engaging in the misleading comparative advertising practices referred to above.
As such, we require you, as our Partner, to remove the Booking.com brand and rates from the widget on your website prior to Friday 27 November 2015. If you are unable to do this, we ask that you remove the TripTease widget from your website entirely. Please confirm by immediate return letter or email to your local account manager that you will, and will continue to, comply with our request.
To the extent that you do not reply or fail to comply with our reasonable requests in this regard, Booking.com’s rights are reserved – including to take such legal action as we deem necessary.
We also wish to take the opportunity to reiterate that you are an important Partner to Booking.com and we value our relationship with you. Indeed, we look forward to it continuing into the future.
Triptease CEO Charlie Osmond tells Tnooz the company was created to improve the booking experience for travellers, claiming that they "waste millions of hours opening multiple tabs as they check and double-check the rates online".
He says the impact of the widget has been "dramatic" for hoteliers.
"This proves what we have suspected for years - many people prefer to book direct, they understand that hoteliers would prefer them to book direct and when we demonstrate that the direct price is at parity with the OTA prices, more people choose to book direct.
Osmond claims the service is "not a war against OTAs", adding:
"We believe Booking.com delivers a great deal of value to hotels and consumers. But they also suck a lot of value, especially from the independent hotelier."
The issue, Osmond says, has come to light because "Booking.com want to snatch transparency away from the public".
"Enough is enough. Transparency is good for competition, it is good for consumers and it is crazy-good for hotels."
Here is a short clip on how the Triptease system works:
Issues elsewhere
Meanwhile, Tnooz knows of another technology company, based in the US, that has a similar, but not identical, dynamic price tracking widget as part of its product suite.
That technology provider claims that last spring the Priceline Group asked it to either shut down its product or make changes to the product that the provider deemed unreasonable. The provider did neither.
One of that provider’s clients is a major US hotel. That hotel was threatened by Priceline Group that it would be removed from the group's search listings unless it stopped using the provider’s third-party widget, claims the technology provider.
An executive from the hotel declined to speak to Tnooz. The technology provider declined to speak on the record.
That said, the technology provider did make a persuasively believable case to Tnooz that Priceline Group had indeed asked it to shut down its widget functionality, partly due to claims of infringement of its intellectual property.
An executive familiar with the matter speculated to Tnooz that Priceline Group’s main concern might be that the various micro-meta widgets were exposing rate differentials that undercut rate parity and similar rate-matching agreements between online travel companies and hotels.
Sometimes, OTAs were undercutting hotels on rates, despite agreements. Sometimes, hotels were undercutting OTAs, despite agreements.
It’s unclear if micro-meta widgets could help strengthen rate parity, or if they might weaken it. Rate parity has been legally upheld in the US and is a mainstay of third-party distribution practices in the country.
Related agreements that could be affected include Most Favored Nations clauses (a horizontal price constraint) or Resale Price Maintenance (a vertical price constraint).