Tuesday, May 22, 2018

States urged to support crackdown on “wrecking balls of Australia’s accommodation industry”

A leading tourism body has called on all states and territories to support the government’s new tax law for online travel agencies.

Treasurer Scott Morrison announced in last night’s budget that GST will be applied to Australian hotel bookings made through offshore digital businesses, so they face the same tax rules as Australian businesses.

The Accommodation Association of Australia is now urging states to support the tax to ensure it becomes a reality.

“On behalf of the accommodation industry, we welcome the first step the Turnbull Government has taken to force offshore online travel agencies to pay their fair share of tax in Australia,” said CEO Richard Munro.

“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 per cent of online accommodation bookings in Australia, yet they employ very few people in Australia and pay virtually no tax in Australia.

“It’s high time that these wrecking balls of Australia’s accommodation industry start paying their way instead of robbing hard-working local accommodation businesses of revenue, costing Australian jobs.

“On behalf of our members, we intend to write to all relevant state and territory ministers to urge them to support the change the federal government is proposing to extend the GST to offshore sellers of hotel accommodation.”

Mr Munro said the association would also like to see the nation’s competition regulator play a far greater role in the policy area, to ensure any financial hit wouldn’t be passed on to accommodation businesses across Australia.

“While this crackdown on online travel agencies is an excellent initiative, the last thing we want is for these foreign giants to ramp up their commissions even more, meaning Australian accommodation businesses simply end up paying online travel agencies even more,” he said.

“Therefore, we would like the Australian Competition and Consumer Commission to take immediate steps to ensure this doesn’t happen.

“We are also promising to continue our campaign to ban parity pricing, which prevents accommodation businesses from advertising a lower room-rate on their websites than online travel agencies.”

Mr Munro said even more GST revenue could be recouped if the proposed tax change was extended to apply to sharing economy accommodation providers, including Airbnb.

“Airbnb does not charge GST, which is one of many unfair advantages it has over traditional accommodation operators,” he said.

 

About Kate Jackson

7 comments

  1. So they get hit with tax instead of with a law stopping them hosting anonymous “reviews”.

    Which means their commission fees will go up to cover the tax (regardless of the claim it won’t) and we still get to be slagged by all the whingers anonymously.

    Situation normal, politicians ignoring the real problem.

  2. So many guests that come to our Motel don’t know (or claim not to know) that their $$ is going overseas when they use OTA’s they also claim not to know that we the owner of the business pays the price for them using the OTA’s with the commission payments. Awareness of the commission fees and the fact the money is going overseas needs up front and in the face of the people using these OTA’s.

    Its great news that will get taxed but there needs to be something in place especially for the Mum and Dad owned motels that the commissions wont go up and put people/families out of business.

    Totally agree Andrew anonymous reviews should not be allowed, we cant “Review the guest” so they should put their name to their review and we should have right of reply with the truth!.

  3. I agree, by the time the commission has been paid and the GST paid we have lost at least 25% of the money we received from the guest. Most of us don’t charge the high rates just in order to survive. Pretty disgusting, the guest do not understand that their money is going overseas. A lot of my guests think they are booking direct when in fact the OTA’s site comes up instead. VERY SAD THAT THE GOVT DOES NOT LOOK AFTER THE SMALL OPERATOR.

  4. Great news, finally a spotlight on the OTA’s. The GST is already paid by the Hotelier on the total sale. Simply the OTA’s are not paying 10% GST on their commission which ranges from 12.5% to 25%. The GST tax avoided by the OTA’s is therefore on a 12.5% commission is equal to 1.25% of the Hotels revenue. The bigger issue is our Federal & State regulators are toothless and unmotivated when it comes to dealing with the bulling behaviour of the OTA’s which have enormous market power. Complaints go no where. Its left to the Hotelier to take the legal recourse and risk being deregistered by the OTA.

  5. I wrote letters to both Federal and State ministers of tourism etc. When I eventually got a reply there was a lot of buck passing, but in the end it was “if you don’t like it, go to the ACCC”. Yeah right, little ol me takes on international mega corporation.
    So they get to host anonymous reviews that can be from every twit, scammer and competitor down the road, but I get identified if I respond AND even if I prove that reviewer never stayed or used photos of another property nothing gets genuinely investigated or taken down.

    In short, the politicians don’t care.

    Be interesting to know how much in political donations the OTAs pay to the major political parties………

  6. Maybe there is another point that is being missed as the overall GST situation won’t make any difference to the operator. if the OTA adds it on, the property can claim it. The apartment owners if not registered for GST will be hit with this but otherwise there is little effect to the operator. Of course the states will earn extra revenue which is a plus.
    However how about we turn the focus of price parity around. Currently the property can’t list a direct price below the price offered to an agent. However it seems the agents are breaking their own parity rules and often sell the room at a price below that which it was given. So Richard how about you get a lobby group together to ask the ACCC and anti-competitors to make this unlawful. If the properties can’t sell for less, why can the agents. it might be quite an easy win and at least we get one thing over the line

  7. Ha ha ha ha Well not all of us are with online bookings. They already rip you off twice and we still have to pay our taxes.GST or whatever. Expedia charge more than our price then hit us for another ten dollars booking fee. So I got rid of them. I am not working for them. We are on google. We are new leaser’s and will get our clientelle via word of mouth and google. As a small country motel we cannot afford to pay twice.

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