By Vanessa Cavasinni, editor Australian Hotelier
On Friday, the Australian Competition & Consumer Commission (ACCC) ruled in favour of large online travel agencies (OTAs) like Expedia and Booking.com, stating that hotels that offered their accommodation through OTAs could not offer their lowest rates on their own websites.
An investigation was opened by the ACCC into OTAs last September, after several accommodation providers brought forth concerns about anti-competitive clauses associated with using OTAs. An agreement was reached between the ACCC and Expedia and Booking.com on Friday 2 September where the OTAs have removed the contractual requirements for accommodation providers to offer room rates equal to or lower than any other OTAs engaged and through offline channels and to make all remaining room inventory available on these sites.
“Australian accommodation providers will now be able to tailor their offers to better meet the needs of their customers and their own businesses requirements. They will now be able to offer lower rates through telephone bookings and walk-ins, offer special rates and deals to customer loyalty groups, in addition to offering deals via Expedia and Booking.com,” said ACCC chairman, Rod Sims.
However many accommodation providers were disappointed with the outcome, which means that they can only offer their lowest rates over the phone and on site, if they want to use an OTA.
The CEO of Tourism Accommodation Australia (TAA), Carol Giuseppi, expressed her concerns with the findings.
“TAA welcomed the chance to be included in discussions with ACCC, but has advised ACCC that in its view the agreement doesn’t go far enough to protect hotels and consumers.
“Whilst the decision that hotels no longer have to give OTAs the same availability of rooms was welcomed, TAA advised the decision to allow OTAs to prohibit hotels from offering lower rates online clearly lessened competition and was detrimental to hotels and travellers.”
Giuseppi continued: "We advised the ACCC it should have insisted that OTAs allow hotels to set their own rates online. Hotels will only be able to offer cheaper prices than an OTA over the phone, over the counter or via a loyalty club. Smaller hotels in particular feel very vulnerable to the power of the global OTA duopoly.
“The ACCC needs to send a stronger message to these two global giants to ensure travellers’ interests are protected.”
Bradley Woods, the CEO of AHA WA, also slammed the decision, suggesting that the new agreement particularly disadvantages smaller and regional hotels.
“It seems like it’s back to the 70s for the ACCC, with hotels only able to offer cheaper prices than an Online Travel Agency (OTA) over the phone, over the counter or via a loyalty club.”
“This deal is not fair for Australian consumers or hotels, especially smaller businesses in regional Australia that are struggling to be competitive,” said Mr Woods.
Both the TAA and AHA will be meeting with Federal Government representatives in Canberra later this month to protest the ACCC’s agreement.