Booked a terrible holiday? Don’t forget the website that sent you there |
We’ve all returned from a summer holiday and wanted to give the hotel, airline or travel company a one-star rating, but why does the price comparison site that took us there avoid such scrutiny?
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So-called ‘digital aggregators’ have transformed consumer markets for the better. Platforms like Booking.com, Expedia and Airbnb bring together large numbers of providers that allow customers to compare alternatives, find better prices and complete transactions in just a few clicks. They give smaller providers access to global demand and make segmented markets far easier to navigate, but this convenience comes with a growing imbalance of power.
Customers tend to gravitate towards aggregators offering the widest choice. Scale attracts yet more scale, creating an environment in which a small number of aggregators become exceptionally powerful.
Competition breeds discipline
Established platforms are challenged by companies offering more specialised comparisons, curated selections or services for particular groups of customers. These challengers usually address only part of the market and advantages enjoyed by the largest aggregators remain difficult to overcome.
Providers can of course withdraw their services, but doing so may mean losing access to huge numbers of consumers which even large hotel........