Booking Hopes Its Kayak Brand Can Help Save eTraveli Deal

Booking Holdings has proposed a remedy to a hotel issue that is threatening European Commission approval of its roughly $1.8 billion deal to acquire flight tech company eTraveli Group — show hotels from competitors when someone books a flight.

The potential solution might include something like this: After someone books a flight on Booking.com, the company would use sister brand Kayak to offer a variety of hotel choices from rival online travel agencies and perhaps the hotels themselves.

Kayak is a metasearch — or comparison shopping site — so if the traveler was flying from Amsterdam to New York City, then Kayak might display rates from Virgin Hotels New York City via Expedia.com, Hotels.com or Orbitz; Hilton Club the Quin New York from those same or other rivals, and other properties, as well.

It’s unclear whether Booking Holdings would also include booking options from its own brands, such as Booking.com, Priceline, and Agoda.

The idea is to appease the European Commission’s fear that the acquisition would not only strengthen Booking.com’s flights businesses, but would also bolster the company’s already market-shaping hotels business.

European regulators are balking at allowing the consummation of Booking Holdings’ nearly two-year-old agreement to acquire flight-tech company eTraveli Group, based in Sweden, because they think the consolidation would hike costs for hotels and guests. eTraveli Group has a relatively small hotel business, and Booking.com is its main partner.

The European Commission, which has been scrutinizing the proposed marriage for several months, is expected to make a decision on the deal by August 30. Regulators in the UK already gave their blessing.

“Competition is already limited in the hotel OTA (online travel agencies) market and Booking appears to be unconstrained by competing OTAs, hotels and end-customers,” the European Commission said in a statement in June.

The EU competition watchdog said the deal may increase Amsterdam-based Booking Holdings’ bargaining position towards hotels and divert demand from cheaper alternative sales channels.

Booking.com stated in July that it expects to meet the European Union’s definition of being a “gatekeeper” by the end of 2023. Gatekeepers, under the Digital Markets Act, have a significant impact on the EU market and “link a large user base to a large number of businesses.” Google told the EU that it already meets that definition.

What this means under the European Union’s Digital Markets Act is that tech companies of this size — having at least an $82 billion market cap and 45 million active monthly users — will see some of their operations or business practices restricted. Meta/Facebook/Whatsapp, Amazon, Apple and Microsoft would also feel the pain.

Reuters was among the first to report that Booking had offered to display a variety of hotel choices to flight bookers as a proposed remedy to get approval for the eTraveli merger, but the report didn’t specify how Booking might do that.