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Aussie hostels scent victory over ‘unreasonable’ OTAs

September 26, 2013 Headline News, OTA News No Comments Email Email

egtmedia59Operators of Australian backpacker hostels are battling against clauses in contracts with online travel agents (OTA’s) with they consider unreasonable and unbalanced.

They have been joined by other hostel operators from around the world and they scent victory.

There are now reports that Hostelworld.com, the world’s biggest seller of backpacker accommodation, has revised its contract to meet some of the hostels demands.

At the forefront of the rebellion is youth travel accommodation industry association StayWyse (the Association of Youth Travel Accommodation), backed by the Backpacker Operators Association of New South Wales (BOA) and similar organisations from around the world, even as far away as EGT_Artical Banner A 250x250Argentina.

Following a forum in Sydney on 19 September 2013 at the World Youth & Student Travel Conference (WYSTC), which discussed the topic “Between conflict & cooperation: finding win-win outcomes for hostels with Online Travel Agents (OTA’s)” StayWyse issued the following statement:

Resetting the Relationship: establishing fair practices in online distribution

Online Travel Agents (OTAs) and youth travel accommodation operators are mutually dependent. OTAs have benefited by broadening the variety of product they offer, while youth travel accommodation providers have gained distribution to customers in markets where they are less well known. Youth travellers have gained most – by from being able to access a broad range of accommodation options, coupled with customer reviews and location content.

Nevertheless the accommodation operators are the ultimate providers of the product; they alone should determine where it is sold and at what price. There is thus a need for a sensible reset to be found in a relationship which, over time, has become less and less commercially balanced. A number of fair practices need to be established to ensure product sovereignty rests with the operators. Equally OTAs that provide genuine value to operators can be assured of continued support in terms of competitive product and good availability.

Agreements between OTAs and youth travel accommodation operators should not contain clauses that:

1.    Allow the use of property or brand names in online advertising, unless specifically authorised;
2.    Require rate parity;
3.    Enforce mandatory availability parity (either via last room availability or minimum allocations);
4.    Allow for agreements to be terminated at short notice (without a compelling cause), with no consultation and without being signed by
5.    Are not written in plain English (and are not translated into the main official language of the operator)
6.    Conflict with national or international trade, competition or consumer laws;
7.    Require operators to indemnify OTAs for tax obligations on commissions;
8.    Allow the OTAs to be opaque in how they display default search results (including the use of spurious ” recommended” terms that are designed to mislead consumers, when the basis of recommendation is the % commission paid or the availability given to the OTA);
9.    Result in commissions being paid on no shows or any other unrealised turnover.
10.  Discriminate against an operator based on size or location.

The above code of practice represents a constructive and balanced approach to resetting the relationship between OTAs and youth accommodation operators. It’s adoption will result in a better deal for consumers and will promote genuine competition.

The Backpacker Operators Association of New South Wales, Australia (BOA) endorsed the StayWyse position.

“BOA applauds StayWyse acknowledging the broader issue of imbalances occurring in agreements between OTA’s and accommodation operators, BOA’s honorary secretary, Robert Henke, declared.

“This code of practices represents a balanced and constructive approach to resetting the relationship between OTAs and accommodation operators. BOA endorses a co-operative approach with its members in adopting the code”.

Now, the scent of victory is in the air. The respected Travel Trends site (traveltrends.biz) is reporting that HostelWorld.com has revised the terms of its contract to exclude, most significantly, the demand for rate parity.

“To my knowledge they are the first OTA in the world to do this,” Henke told Travel Trends.

Written by : Peter Needham

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