Booking.com at the center of compensation controversy

15-11-23

Booking.com has been at the center of controversy in a number of recent situations. From financial problems with hotel partners to tax disputes in Italy and a failed acquisition, the company has faced a variety of challenges that have generated mixed reactions in the business community and among consumers.

On November 13, 2023, Booking.com issued apologies to hotel operators and offered cash compensation to those whose payments were delayed by more than 21 days due to problems in their financial systems. Glenn Fogel, CEO of Booking.com, acknowledged the negative impact on business and apologized for the delay in payments.

However, compensation was only offered to those whose payments were more than 21 days late, excluding the initial 10-day freeze period that members were advised of. The lack of details on the amount of money to be paid and the number of partners to receive compensation has generated criticism and left some affected parties dissatisfied.

Italy Tax Dispute Resolution: Million-Dollar Settlement

Booking.com reached an agreement to settle a tax dispute in Italy through a payment of approximately €94 million ($100.25 million). The investigation by the Guardia di Finanza in Genoa, launched in 2018, alleged that the company evaded €153 million in value-added taxes (VAT) related to vacation rentals between 2013 and 2019.

Although Booking.com claimed to have always complied with Italian VAT laws, the settlement with the Italian Revenue Agency covers the period from 2013 to 2021. The company filed its VAT return for 2022, committing to act as a tax agent for transactions with individuals not registered for VAT.

This ruling follows a series of tax settlements between Italian authorities and other large international companies, underscoring the growing attention on the taxation of tech and travel giants in the country.

90 million payout for failed eTraveli acquisition

The company also had to face the consequences of its failed attempt to acquire Swedish group eTraveli for $1.8 billion. The European Commission blocked the deal, and Booking Holdings had to pay a termination fee of $90 million, equivalent to 5% of the total value of the deal.

Although disagreements over closing conditions and regulatory approvals led to the blocking of the acquisition, Booking.com CEO Glenn Fogel had vehemently defended the transaction in the past.

These recent events highlight the challenges facing Booking.com in the competitive world of online booking and underscore the importance of transparency and efficient management of relationships with partners and tax authorities. The company remains a central figure in the online travel industry, but faces constant pressure to maintain the trust of its partners and customers in the midst of complex and challenging situations.