EXCLUSIVE: Dick Smith blasts accom’s “immoral” “unethical” standover men

Dick Smith is almost as famous for passionately backing Australian business as he is for growing an electronics empire out of a CB radio hobby.

This week the entrepreneur took aim at accommodation’s public enemy number one, comparing online travel agencies to the infamous Kings Cross standover men of the 1950s in their demands for commissions from Australian moteliers.

When Smith tuned in to the ABC radio’s Australia All Over last week, he was appalled to hear about the commissions of up to 35 percent charged to moteliers on bookings made through sites like Expedia and Booking.com.

He has since posted a Youtube video lambasting the agencies (OTAs) and urging Aussies to book accommodation direct, lobbying Accomnews to help educate the wider public about the practice.

When he approached us for information on Friday, Smith said: “It’s unethical, it’s immoral – I’m comparing it with the standover payments made in Kings Cross because it’s that serious.

“I noticed when I started booking hotels on my iphone I’d see all these sites, and on principle never buy from them because I just knew they were leeches. I’d always ring the hotels directly.

“We should have Australians going direct. Why would you want to be paying any American billionaire some of the money for your booking in Australia? It’s outrageous.

“I think it’s a very serious issue. I suggest every motel owner sends my video to their email list because it’s incredibly important.”

Smith is critical of the Australian Competition and Consumer Commission for a perceived failure to protect moteliers from contract clauses imposed by OTAs which prevent them from advertising cheaper prices online.

The practice is currently under review by the consumer watchdog, with insiders predicting Australia may soon follow several European nations in banning parity clauses.

The American-owned OTAs currently pay no tax under Australian law, a situation about to change this November following an announcement in May’s federal budget. 

Smith said he was disappointed his video had so far failed to go viral, and he urged Accomnews editor Kate Jackson to send it out to as many mainstream media contacts as possible.

“It’s imperative to try and make my video go viral, it’s the public that have to know they’re being ripped off,” he said.

“The public are the ones who are going to do something about it.”

About Kate Jackson

Kate Jackson
Kate Jackson is the editor of Accomnews. You can reach her at any time with questions or submissions: [email protected]

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  1. Avatar

    Go Dick! I thought it was an awesome video and shared it on my business (accommodation) and personal Facebook pages. It got many shares and several comments saying people were not aware this was the case. We need to educate the general public about the OTA commission, most simply don’t know they’re taking a huge chunk of income from small businesses.

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    Certainly can agree with Dick Smith from an Australian Small business accom owner point of view.
    Must be on one of these sights to get any bookings , loose total control of your business.
    From an overseas traveller point of view , have found easier to use these sights because of language differences. Of course always being aware of what the excess commission rates are and relying on reviews from customer.

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    Well done to Charles from the Budget Motel Chain, who was explaining all this to Macca, when Dick was lsitening to the program. He was the one who got the ball rolling on this important issue. Well done to the Budget Motel Chain. Please make sure you do ost this video on all your sites and ask your famiily and friends to share it also.

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    Are foreign tourists really going to book directly with the property owners?

    I think the ignorance in this video is unbelievable, so Dick Smith is going to help all these hotel owners generate more bookings? I don’t think so.

    If in all other countries in the world that use these channels are improving business and making them grow why would it not work in Australia?

    I think its the mindset that should be changed, technology is changing the world, Dick Smith certainly won’t do that.

    • Avatar

      I think you are probably not an accommodation provider. Most, if not all accommodation properties these days have their own websites where bookings can be made direct, so why wouldn’t foreign tourists book direct? A properties Facebook pages also has an optional “Booking button” to link to your own website. It’s very hard for small B and B properties to compete with these foreign OTA’s. Try searching for a specific property and don’t be surprised if the first option that comes up is one of these! It’s not anything to do with technology, they have the financial clout to buy top advertising spots on Google etc.

  5. Avatar

    Great to see such a well respected Australian such as Dick helping to get the message out there.
    I’d love to see a shortened version made and shared – then it might go viral. Not too many people will watch all 8 minutes

  6. Avatar

    Well done Dick. I’ve shared it on my Facebook.

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