Monday, December 10, 2018

EXCLUSIVE: Dick Smith injects $300m into “endangered” small town accom

Australia’s best-known multi-millionaire is fast becoming a folk hero among mum-and-dad accommodation owners.  

In September, Dick Smith released a video which has been directly viewed more than three million times and is estimated by industry players to have increased direct bookings for small accommodation businesses by 30 percent.

His anti-online travel agent campaign, which urges the public to bypass offshore commission-charging booking platforms and book direct with operators, has prompted thanks from businesses as far afield as the UK and New Zealand.

At the Budget Motel Chain conference in Adelaide where Dick Smith was guest speaker this week, operators estimated the video has resulted in a $300 million a year boost to the collective bottom line of small accommodation businesses.

“That’s 300 million a year I’ve saved going out of the country and that’s gone straight into the pockets of the country motels,” Smith told Accomnews.

“They say it’s very substantially upped their income. I believe I’ve had a 30 percent impact. It’s a huge amount of money.”

Talking about the Book Direct campaign, he said: “It’s one of the best things I’ve been involved with in a long time.”

So, what motivates a man who has made it big to stick his neck out for the little guys? It’s not about money or politics for Smith, which makes him a powerful independent advocate and someone unafraid to take on the big end of town.

“I would have thought by now one of the big companies would be taking some action against me to shut me up, the Trivagos or something like that, but I haven’t heard from them,” he jokes.

The entrepreneur sees globalisation and its effects on small business as an attack on the fabric of Australian society.

“I’m not in the hotel industry, I’m not involved at all,” he said.

“I did that (video) because I thought it was something worthwhile to do and the reason I came down and gave the talk at the Budget Motels conference is I love small family business.

“I said to the people at the talk, we have this bird called the night parrot which is incredibly endangered and they’re spending a fortune in trying to find it and protect it.

“The government should be spending a fortune in trying to protect small Australian family-owned businesses because they are endangered.

“You used to have the local hardware shop, you don’t have that anymore, you used to have the locally-owned service station…I’m concerned we won’t have local-owned accommodation places if we’re not careful.

“Globalisation when it comes to the accommodation industry has gone too far. It will result in this vast amount of money leaving countries like Australia and going to the northern hemisphere and I’m not happy with that.”

Following the uproar surrounding Smith’s video in September, the Australian Competition and Consumer Commission vowed it would take immediate action over the rate parity clauses imposed by online travel agents in their contracts with accommodation providers.

There has been no subsequent ACCC announcement on the issue, despite ongoing industry pressure for action, and the consumer watchdog has refused to provide a timescale for further regulation.

Dick Smith has questioned whether that silence is due to lobbying by powerful interests.

“They are scared of the lobbyists from the big companies which are just staggeringly powerful and they will make sure that they have frightened every minister,” he said.

“These people who are the lobbyists, they normally are Australians but they’re paid by these American companies…to convince the minister that he mustn’t change anything.”

The man who grew an electronics empire from his CB radio hobby believes in the power of determined individuals to effect change.

“I’ve told every motel just take no notice of the agreement and put on your own site cheaper prices and act in the interests of the consumers,” he said of OTA-imposed rate parity clauses.

“I’m very concerned about globalisation concentrating the wealth in the northern hemisphere which means vast amounts of money are going out of Australia.”

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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7 comments

  1. I have had cheaper prices on my own website for 5 years!

  2. What motivates Dick Smith? Ego.

  3. JoAnne

    I total agree with Dick Smith re profits going out of Australia. Its good to see someone standing up for Australian business.

    Its about time that the Government supported small business in this respect and also create a fair playing field between long standing regulated accommodation businesses and for example air BnB who are not required to maintain similar standards and conditions.

    This discrepancy is causing loss of income to small Australian regulated accommodation businesses thus reducing the amount of profits going back into the Australian economy and increasing the amount of money
    leaving Australia and going overseas from off shore booking sites.

    Thank you Dick Smith for standing up for Australian Business

  4. JoAnne

    I total agree with Dick Smith re profits going out of Australia.

    Its about time that the Government supported small business in this respect and also create a fair playing field between long standing regulated accommodation businesses and for example air BnB who are not required to maintain similar standards and conditions.

    This discrepancy is causing loss of income to small Australian regulated accommodation businesses thus reducing the amount of profits going back into the Australian economy and increasing the amount of money
    leaving Australia and going overseas from off shore booking sites.

    Thank you Dick Smith for standing up for Australian Business

  5. I totally agree with Dick Smith and the looming demise of small business. Although I do wonder whether anyone has questioned why the Government itself …state and federal… also incur between 12 and 15% commission on their bookings, as they also use overseas owned OTA’s. It is a start in the right direction making people aware that booking direct keeps the money in Australia but the Government needs to take the lead.

  6. Dick Smith is a great man, a true Australian who has been the Aussie batler himself starting at the bottom and working his way up, he loves Australia and all that represents a fair go.
    I have created a small eco friendly business from a bare paddock and single mom I worked and worked to create a family
    business. I am council approved and believed I had protection, I thought that was what I paid all those fees and contributions for .
    But alas no .
    After the GFC and terrible floods I was forced, as that was the only bank that would consider me, or lose everything due to having to rely on credit cards as people do not take holidays in economic crises. I had to take a loan that was interest only for 3 years approx $20k a year then the honeymoon was over and it went up to $60 per year now.
    In my small country area that is at least 2 people’s full time wage with non left for me. And this is impossible to keep up as there is so much competition from homeowners that have had no costs to set up shop.
    At the time I was lucky to get that . the only option was to lose everything and walk away with nothing, I was so proud I had survived the economic meltdown.
    I believed that as I had a perfect credit rating and a successful small business, now I would not have an issue with refinancing but no I am too old even though I am fit and healthy and have plenty of local people that I employ. I cannot get a loan for 25-30 years so that I can meet my repayments without stress and in the future look to selling when I feel the time is right.
    The same option that anyone else would have.
    From 5 approved local accommodation businesses to 1000 unapproved holiday rents in my local area.
    So what is a girl to do, you believe the local council will protect you, not in my experience.
    You think that any state government will support small business, I don’t dance in the right circles.
    Yes Federal government, sorry I have no super, everything is tied up in my property and as I don’t fit the box, looks like I get to work my butt off, lose the lot and end up on a pension that won’t pay for a rental , eat the cat food, leave the kids my funeral expenses and bless myself that I live in the lucky country that so many Australians worked and died for to create a life so that we all had great opportunities if we worked hard and were thrifty with our pennies.
    Whoops with the mom and dad businesses for you and me that love and worked hard for our community’s to support economic growth and stability on our backs.
    So conclusion, the ACCC has missed the point that many of us are perfectly capable of meeting our repayments with proven history and asset base and need good finance to keep our business and passions alive. With employment for both ourself and community and the flow on effect is massive, we spend locally and actually believe that what we do makes a better and safer country.
    IAS you destroy us, the country will fall into economic chaos.
    Then the conglomerates will have a good laugh and are obviously cheering us on.

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