The “Best Price Guarantee” clause on Booking.com has become a significant topic of discussion among local hoteliers, according to Georgi Genov, the director of the Association of Hotel and Hospitality Industry of Serbia (HORES). This clause, which mandates that hotels offer the lowest price exclusively on the platform in comparison to direct bookings, creates numerous challenges, particularly in terms of market competition and flexibility in business operations.
Global reactions to the clause
Genov explains that the “Best Price Guarantee” means once a hotel sets a price through Booking.com, that price must be maintained across all platforms. This restriction prevents hotels from offering lower prices on their own websites or other sales channels, making it difficult for them to fill rooms, especially during periods of low demand.
He highlights that this clause is causing significant issues for hotels worldwide. “It limits competition,” Genov says, adding that many countries have already taken action against it. For example, Germany abolished this clause in 2021 following a decision by the Supreme Court, while Spain also adopted similar measures to allow hotels more freedom in setting prices.
“In countries like Italy, Spain, and Germany, after the clause was removed, direct sales and occupancy rates increased by 20 percent,” Genov notes.
Economic impact on Serbian hoteliers
Apart from the competitive disadvantages, the clause also exerts financial pressure on Serbian hoteliers. Genov states that Serbia spends between 10 and 15 million euros annually on commissions to online booking platforms. He stresses the need for a national platform, which may not rival Booking.com, but could at least offer better commission rates through dialogue and negotiation. Currently, commissions on Booking.com range from 15 to 25 percent.
In smaller hotels, where bookings are not as frequent, the commission rate can reach up to 40 percent, further intensifying the financial strain. This leaves many smaller hotels in a vulnerable position, essentially becoming service providers for Booking.com without substantial opportunities to generate profit.
A call for legislative action
Genov is calling for changes to national legislation to allow Serbian hotels more autonomy in their pricing strategies. He urges the country’s competition law to address this issue, as eliminating the “Best Price Guarantee” clause could greatly improve occupancy rates by allowing hotels to secure more direct bookings.
He also suggests collaborating with the government on promotional campaigns, citing successful examples from Austria, where direct bookings have been effectively promoted by offering additional benefits to guests.
“We must act collectively as an association, with state support, because individual hotels lack the resources and power to take on such market practices on their own,” Genov concludes. He emphasizes that collective action and national policy support are key to improving the position of Serbian hoteliers in the global market.
