The case, or rationale, for government regulation and oversight of the “hospitality” industry (e.g., hotels, booking companies, etc.) is not merely made on the basis of monopoly or oligarchy in the industry at the expense of market competition, but also on issues concerning business ethics and managerial competence at not only hotel companies (as well as with franchisees), but also separate travel-reservation companies. The European Commission was therefore on solid ground in launching an investigation into a online travel-reservations company in 2026.
To
be sure, running a hotel, with customers staying at such short intervals, is admittedly
difficult, given the need for constant coordinating amid comings and goings. This
is no excuse, however, for dysfunctional management, such as in hiring
incompetent or “misaligned” employees in the first place, and later retaining such
hires as are discovered to have task or attitude deficiencies. Furthermore, the
hotel/motel industry’s franchise model seems particularly prone to franchisees
whose obsession on reducing expenses by trifling with amenities goes on as if
the customers, or “guests,” do not pick up on the underlying pettiness and
greed. Ending the “complimentary” breakfast at 9 a.m., for example, as some Marriot
hotels such as Residence Inns were doing at least in the mid-2020s to reduce
the number of customers (even though all of them have paid for the inclusive
breakfasts), is arguably unethical. So too is the practice of not a few house-keeping
departments of hotels to conveniently interpret the placement of a “Do Not Disturb”
sign as meaning that housekeeping service is not wanted that day, even in the
afternoon. Housekeepers can reduce their workload by such a convenient
assumption with impunity, and lying about whether a sign is on the hall side of
a room’s door can easily reduce a workload even more. Even in how reservations made
not directly through the hotel’s company, but, rather, online using a
travel-reservation service/company to get lower rates, front-desk managers of
hotels are known to relegate those “cheaper” reservations to inferior rooms,
such as ones near elevators and not having views. To be sure, a case can indeed
be made that customers who pay higher rates warrant better rooms, or at least preference
in choosing rooms, but the typical prejudice of hotel managers against “third
party” reservations as being inferior can easily translate into such customers,
or “guests,” feeling inferior as victims of prejudice. In short, the
profit-motive is alive and well in the hospitality industry, where even
extending a reservation must contend with the contractual mindset of hotel
companies wherein rate for each additional night is to be maximized by demand
and supply; daily expediency trumps investing in repeat business by building a
customer basis and even customer loyalty. In short, loyalty does not compute in
a daily revenue-maximizing, transactions-oriented managerial mentality. At
least in the U.S., that mentality really got going once people could shop
online for rates in the 2000s or 2010s. In short, the case for government
oversight of the “hospitality” industry is an easy one to make, especially since
the advent of computer technology used by the industry. The E.U.’s investigation of
Booking.com, an online travel-reservations company, announced in October, 2026
should therefore not come as a surprise.
The E.U.’s “investigation into
online travel platform Booking.com” came amid “concerns that it has failed to
adequately address fake listings and phishing scams.”[1]
A phishing scam is one in which personal/financial information of customers is
extracted for nefarious purposes such as identity theft. E.U. federal
authorities accused the management of Booking.com of having “underestimated the
impact of fraud and unlicensed accommodation on its platform and has not done
enough to prevent users’ data from being exploited by scammers.”[2]
The E.U. commissioner for technology, Henna Virkkunen, said at the time that
E.U. citizens “should be able to book their holidays without fear of being
scammed.”[3]
Additionally, the Commission was taking a look at Booking.com “because it did
not clearly label as ads those listings whose providers paid for a higher
ranking in search results shown to users.”[4]
This charge shifts the focus from the providers using Booking.com to that
company’s own management. Together, the opportunity of collusion at the expense
of the “users” is high enough that government oversight was justified.
Another American travel-reservation
online platform, that which was run by Super.com, was also ripe for investigation
because that company operated at the time in travel, financial tech, and
savings company—all of which came under the Super+ membership. How the company’s
hybrid prepaid Mastercard, useful for cashback and credit-building, and the cash
advances feature of the savings feature related to the travel-platform could have
been examined by regulators for possible structural conflicts of interest. Even
just within the travel platform itself, the company could have been accused of
false advertising because once a potential customer clicks on an advertised
rate, a new page comes to the fore (“checking for rates”) and often times a
new, higher rate appears as the only option. In other words, one rate may be
shown when a customer is deciding whether to use Super.com, Travelocity, or
Priceline, but once the rate shown by Super.com is clicked, Super.com’s
algorithm checks for rates! This process is inherently unethical because the
initial rate shown on a list of rates shown by other travel-platform companies
is shown as the rate that Super.com is offering; there should not be any need
for that company’s algorithm to then check for rates, and even worse,
for a higher rate to then be presented as the lowest possible in using
Super.com.
The advent of computer
technology in the making of hotel reservations has heightened rather than
diminished the need for government oversight and regulation. The profit-motive clearly
plays a significant role in the writing of the algorithms, and this should come
as absolutely no surprise because companies are profit-making machines and are
thus oriented to their own financial interest. In a hotel room, a card that
urges customers to reuse a bath towel because “we care about the environment” can
and should be taken as a subterfuge; the motive behind the sign is exclusively to
reduce the expense that the hotel pays for its linen and towels to be laundered.
The appeal to caring can even be looked at as mendacious, or at least as
raising the specter that a management is fine with misleading customers. An
organizational culture of unethical conduct at the expense of customers can
indeed be glimpsed by such small “red-flags.” “Hospitality” managements can
indeed be very petty—going so far as to dilute orange juice and reduce the
thickness of waffle-makers, for example, so as to reduce the costs of the
foodstuffs to the hotels. Hotel and especially motel managers and franchisees
can be incredibly selfishly and greedily shortsighted at the expense of repeat
business. That is, the hospitality industry is rife with exploits that can and
should be of interest to government officials who are oriented to consumer
protection rather to the financial interests of (regulated) companies or
industries whose political-campaign donations to elected representatives and
candidates for such public offices can be very persuasive both in
legislatures and regulatory agencies. The associated theory is called
regulatory capture. In investigating Booking.com, the E.U.’s executive branch may
have been resisting that, though it is possible that a more
politically-connected competitor of Booking.com had been pushing for the investigation
in what is known as the strategic use of regulation to gain market share and
even heighten the barriers to entry by potential competitors. An effective regulatory
apparatus should both investigate companies and ensure that markets remain
competitive rather than become oligopolistic or monopolies.
2, Ibid.
3, Ibid.
4. Ibid.
