Hoteliers are delighted at a pledge by the Australian Labor Party (ALP) to let them advertise cheap room rates online without fear of being penalised by giant online travel agents (OTAs).
If elected to government in the coming federal election, Labor will pass legislation allowing hotels and motels to display online the prices for their rooms – even if the rates are lower than those shown on Expedia or Booking.com websites.
Currently, “price parity clauses”, detested by hoteliers, prohibit hotels from advertising on their own websites prices lower than those on sites related to Expedia or Booking.com.
Chief executive of the Accommodation Association of Australia (AAoA), Richard Munro, is jubilant, describing the ALP announcement as “ a breakthrough for our industry and consumers and welcome news to the Accommodation Association of Australia, who have been lobbying for this outcome for years”.
The two dominant online travel agency global behemoths – Expedia (which operates the Expedia, Wotif, Hotels.com and Trivago brands) and the Priceline Group (which operates the Booking.com brand) – command almost 85% of online accommodation bookings in Australia.
The AAoA has long claimed that the pricing-parity requirement in their contracts with Australian hotels, motels, apartments and other accommodation businesses represent a restriction on trade.
Entrepreneur Dick Smith’s stand on the issue in the video below (“Hi, it’s Dick Smith here and I’m bloody angry!”) has gained a lot of traction:
The AAoA says the fact an operator of accommodation is restrained from selling a lower rate online is “an outrage” which does not pass any fair test.
The public are getting a dud deal when they do not book direct or via a bona fide ATAS-accredited Australian agent, it adds.
“The Accommodation Association of Australia welcomes this historic announcement from the Labor Party,” Munro declared.
Country pubs stand to benefit
“Effectively this means that our industry, should the Labor Party win office, will be able to finally offer the best rate directly to our customers without fear of being darkened or threatened by these big multinational OTA’s.
“This announcement is very welcoming for our members and the industry across Australia; the winners will be the operators of small business and the public who can finally get a better deal by going direct online once this legislation is passed.
“Up to this point – the only way to offer our customers a better rate was via telephone, walking in or via a hotel loyalty program, but customers are booking online and not getting the best deal at all!
“We know the ACCC are currently investigating arrangements between OTA’s and the accommodation industry and are considering legislation introduced into Federal Parliament under the Competition and Consumer Amendment (Misuse of Market Power) Act 2017, and we look forward to that investigation concluding soon.
“On behalf of the members of the AAoA, we want to thank the Honorary Dr Andrew Leigh MP, the Shadow Assistant Treasurer and Federal Member for Fenner (ACT) for acting on this important issue, and hopefully the ACCC and Government will follow suit to what is a sensible and fair decision by the Australian Labor Party”.
Written by Peter Needham
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