Alleged predatory behaviour by foreign-based online travel agents (OTAs) is worrying traditional bricks-and-mortar agents in Thailand. They say OTA activity is forcing down room-rates and they want the government there to scrutinise the industry.
“We’re doubtful about tax payments by international online travel agents, many of which have bookings for illegal or unregistered hotels on their websites,” ATTA vice-president Surawat Akaraworamat told the Bangkok Post.
Sawadee.com director of sales, Pipakorn Lumwanna, told the Bangkok Post OTAs were pressuring hoteliers to give them the lowest room rates. He said some websites were selling five-star rooms at three-star prices, forcing operators of small hotels to slash room rates further, which depressed the overall rate structure.
Foreign websites were spending heavily on advertising, Pipakorn said. A big China-based online agent was wresting market share in Thailand by charging a lower commission than the typical 15-25%.
Only room charges are transferred to hotels in Thailand, after the commission fee is deducted.
Pipakorn urged the Thai government to follow the trail of money and tax payments by foreign travel websites, whose revenue goes directly to parent companies and overseas banks.
The concern goes beyond Thailand. Singapore-based Agoda.com, one of Asia’s leading hotel booking websites, was recently fined more than 20 million Taiwanese dollars (about AUD 855,500) by Taiwan’s tax office for not legally registering as a business in Taiwan and failing to issue unified invoices.
Written by Peter Needham