Australian hoteliers now free to undercut OTAs on offline bookings
Friday, 05 Sep, 2016
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The Australia competition watchdog has finally struck a deal to partially end the price parity clauses demanded by the big hotel booking sites.
For years major OTAs such as Expedia and Priceline’s Booking.com had demanded a ‘lowest available price’ guarantee so that individual hoteliers could not undercut them.
The Australian Competition and Consumer Commission said this clause has now been removed for telephone and walk-in bookings, and for loyalty members.
"Parity clauses generally require accommodation providers to offer best price and availability to online travel sites. This guarantees the online travel site the accommodation provider’s lowest rate and prevents competitors and consumers from negotiating better deals directly with the provider," said ACCC chairman Rod Sims.
Australian accommodation providers will now be able to tailor their offers to better meet the needs of their customers and their own businesses requirements."
Combined, Booking.com and Expedia brands have an estimated 80% share of the online hotel booking market.
However the industry is far from satisfied.
Richard Munro from Tourism Accommodation Australia says it doesn’t go anywhere near far enough.
"By far the biggest concern is that operators of accommodation businesses are prevented from advertising on their own websites at 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," Munroe said.
"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."
"Smaller hotels in particular feel very vulnerable to the power of the global OTA duopoly," added Tourism Association Australia CEO Carol Giuseppi.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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