Industry criticism is mounting over the new deal set up by the Australian Competition and Consumer Commission (ACCC) to regulate hotel rates available through online travel agents (OTAs) and those available direct from hotels.
The deal lets hotels offer travellers a cheaper rate direct than those available through OTAs – but they still can’t do so online. See: ACCC helps hoteliers win partial victory over OTAs
The accommodation organisation Tourism Accommodation Australia (TAA) has voiced concern about the deal, claiming that it doesn’t go far enough to protect hotels and consumers.
The Accommodation Association of Australia agrees. Its chief executive, Richard Munro, says the accommodation industry has significant concerns “about an agreement which has been reached between the ACCC and the two offshore-based companies who command around 80% of the online travel agency market in Australia.”
The ACCC announced last week that Expedia and Booking.com had each reached agreement to amend price and availability parity clauses in their contracts with Australian hotels and accommodation providers.
Munro said that from what the Accommodation Association understood, “because the ACCC has not made public the agreement”, Australian consumers would be worse off under this “hidden arrangement”.
“We estimate consumers could still be paying up to 20% more for a room because of the secret commissions which are charged by these offshore global bohemoths,” Munro said.
“By far the biggest concern is that operators of accommodation businesses are prevented from advertising on their own websites a lower room-rate than what these online travel agencies display. The ACCC has seemingly overlooked the fact the internet is easily the number-one way consumers book accommodation.
“Effectively, this means the online travel agencies can still dictate – from their offshore headquarters – to small motels in regional Australia, what price they can charge for providing a service, when many of these accommodation businesses are struggling to be profitable.
“We would be keen to learn how many such operators the ACCC met with before reaching the agreement with the online travel agencies. With their dominant market share, the two major offshore online travel agencies are squeezing Australian accommodation businesses and Australian consumers will ultimately be the losers through higher prices or worse still, less choice because smaller operators in regional areas could be forced out of business.
“Another concern our members have raised is in communication received from one of the online travel agencies in question about this issue last week, the terms and conditions of the contracts between accommodation operators and the online travel agency state the contract ‘shall be exclusively governed by and construed in accordance with the laws of the Netherlands’.
“We would like to think Australian Consumer Law applies to transactions made by Australian consumers within Australia for accommodation booked at an accommodation business which is physically located within Australia.”
Edited by Peter Needham