Reimagining the $9 trillion tourism economy—what will it take?
Hey everyone, I recently read an article that McKinsey published on the future or the tourism industry following this
The Australian Competition and Consumer Commission (ACCC) have recently ruled in favor of Booking and Expedia’s rate parity restrictions. The decision is similar to the one made by the European Commission last year.
The Australian Accommodation Association (AAA) are appealing this decision in an attempt to regain control over the rates that they can set for their own properties. They insist consumers are suffering from an extra 15% or more in artificially inflated prices due to this Rate Parity restriction.
From the article, Hotels go to war against Expedia and Booking .com:
The ruling meant hotels could not offer a cheaper price on their own website but they could provide a better deal if a guest called them direct.
“To say members of the AAA are angry with the outcome of the ACCC investigation is an understatement,” said Mr Munro in his letter to Mr Sims.
“The ACCC is seemingly unaware that the overwhelming majority of accommodation bookings in Australia in 2016 are made via the internet, and very few bookings are made directly with accommodation businesses and/or through walk-ups.”
The reason hotels could offer better rates if they weren’t contracted to online travel agencies, was because of the commissions charged by Expedia and Booking.com, he said.
“The commissions are as high as 20 per cent. They’ve almost doubled in recent years and it’s only going to get worse for as long as these two command such control,” said Mr Munro.
Expedia and Wotif, on the other hand, feel that the ruling is perfectly fair.
Managing Director of Expedia Australia New Zealand, Michael Pearson said the Expedia marketplace was “where hoteliers gained global exposure to consumers who found value and efficiency in shopping for travel through our world class travel brands at no upfront cost”.
“Hoteliers only pay for this visibility if a booking is made on Expedia’s websites,” said Mr Pearson.
Wotif Managing Director Daniel Finch said the website had helped thousands of hoteliers who wanted to compete with each other for consumers’ business.
“We help consumers discover these hotels quickly and efficiently,” said Mr Finch.
“By doing so, Wotif helps its hotel partners become visible and bookable to consumers locally and globally.”
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