Learn about the four most troublesome contract clauses that hinder hotels' ability to compete effectively with online travel agencies.

3. Hotels’ most common complaints against Online Travel Agencies (OTAs):
Hotels Vs. Online Travel Agencies
Brand hijacking
in Google Adwords
Lack of control
of any marketing
Rate parityHigh
commission rates
Lack of customer
relationship management.
These problems persist because of stringent contracts
where OTAs hold all the power.

4. 4 troublesome
OTA contract clauses
Always read the fine print in your contract with any OTA.
Standard OTA contracts between hotels contain
a lot of legalese, but hotels should be aware
of these four types of contract clauses that work
actively against a hotel’s best interests.

5. Clause #1: Closed User Groups
“[OTA] shall be entitled to give a discount on the room price
at its own costs to its closed user group members.”
Large OTAs are able to offer discounts and loyalty
programs en-mass by cutting into their commissions.
For independent hotels that cannot offer robust
loyalty programs, this can be very damaging.
How to protect yourself:
Insist on wording that OTA closed group discounts only be offered
with your express permission or participation in a discount program.
Example from OTA contract:

6. How to protect yourself:
Be very careful about how it’s worded. Insist upon an addendum clause
that allows you to market to your own guests, as long as they have provided
direct consent.
Clause #2: Owning
the Guest Relationship
“Direct Marketing to Guests. The Accommodation agrees not to specifically
target Guests that have been obtained via [OTA] in either online or offline
marketing promotions or solicited or unsolicited mail.”
Though it is fair for OTAs to manage initial bookings
with new customers, OTAs should not have the right
to own your guests forever.
Example from OTA contract:

7. How to protect yourself:
Insist upon clauses that allow you to choose which OTA affiliates and owned
metasearch channels you want to work with. At least maintain the right
to disconnect from any third-party platform.
Clause #3: Rate Parity
on Third Party Platforms
“In no event shall [OTA] be liable to the Accommodation for any acts
or omissions on the part of any Third Party platforms.”
Hotels often give OTAs the right to use their IP
(photos, name, logo, etc), which helps to sell bookings.
However, third-party sellers sometimes use tricks to
make the OTA rates appear lower than the hotel rates!
Example from OTA contract:

8. How to protect yourself:
Insist against such clauses in your contracts. Then make sure your name
is properly trademarked so that you can lodge a formal complaint with
Google in the event of a hijacking.
Clause #4: Brand Hijacking
“[OTA] is entitled to promote the Accommodation using the Accommodation’s
name(s) in online marketing, including email marketing and/or pay-per-click
(PPC) advertising.”
Brand hijacking is universally despised by hotels, yet here
it is, written into the contract! Not only that, many OTAs
then insert a clause to prevent hotels from doing the same
to them.
Example from OTA contract:

9. Additional
Legal Protections

10. Additional Legal Protections
Hotels need to review their contracts carefully and insist
upon clauses that will protect their interests.
The name of your OTA partner and the rates
at which it sells your bookings should not be
considered the intellectual property of the OTA.
Clarify intellectual property definitions

11. Additional Legal Protections
Makes sure it’s written into your contract
that running your own best rate guarantee
programs is not a violation of the OTA’s rate
parity rules.
Insist on being able to use your hotel’s
own best rate guarantee program

12. Additional Legal Protections
Hotels should insist upon API access
to an OTA and its affiliate sites. This will
allow the hotel to monitor rate parity.
Require transparency checks from the OTA

13. Strength In Numbers
Hotels need to work together
and lobby for the necessary changes
in their contracts that will protect
them from OTA bullying tactics.
Let's make hotels equal partners with the OTAs once again.
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