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Expedia campaign branded a “new low”

A Queensland tourism advocacy group has described as “pure negligence” a decision by Tourism Port Douglas Daintree to collaborate with Expedia on its latest promotional campaign.

Gerry Ireland, director of the group Port Douglas Direct, says the decision to promote the region in tandem with the online travel agency, which was recently named in a UK crackdown on agencies using misleading marketing practices, requires providers to heavily discount rates.

The March campaign, which runs until the end of the year, compels participants to offer discounts of at least ten percent on the Wotif and Expedia websites.

Mr Ireland said: “In what can only be described as an act of pure negligence, the EO and directors of Tourism Port Douglas Daintree have entered into an irresponsible collaborative promotional campaign with Expedia and Wotif.

“This domestic campaign will be based around onsite media banners that link to a landing page featuring activities, flight and hotel deals for Port Douglas and the Daintree. Such great exposure for our beautiful destination!

“What is sinister is the total disregard for a balanced view in owning responsibility for how tourism is promoted in Port Douglas Daintree.

“Expedia charge 15 percent commission of the room rate, the promotional expectation of TPDD and Expedia is a minimum additional 10 percent discount on the room rate; for example, if the online room rate is $100/night, the minimum promotional room rate will be $90/night and Expedia will then charge a commission of 15 percent, which means the net room rate after these discounts is $76.50/night.

“A minimum 25 percent commission total booking is destructive to the Port Douglas accommodation sector. Someone has to pay for the 25 percent, either the property manager, resort owner, property owner, or the tourist customer.”

Mr Ireland described the move as “a new low” for the tourism authority, which came in for similar criticism for a decision to run a similar joint campaign with Booking.com last August promoting the region on the side of Melbourne Trams.

“Tourism sustainability requires a certain level of business acumen, as well as trust,” he said.

“It seems as though TPDD management and directors are consistently struggling with this fundamental business management requirement.”

Tara Bennett, executive officer of Tourism Port Douglas Daintree, has been approached for comment.

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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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9 Comments

  1. This “rot” in the industry is widespread across Australia. Too many bureaucrats get talked into DISCOUNT as the only way to drive business. The focus should be on value add and the best personal local experience. There are so many local small regional booking cooperatives across our country – Regional and State marketing organisations should be pushing their own brand rather than growing multi-national’s brand

  2. Hi Gerry

    You could turn this into a good thing though. No one is stating what price you need to offer to begin with, what dates you need to provide availability, or even what style of accommodation is made available. Often in my experience, walk ins are offered a “free” upgrade to a superior room for the same price as the basic accommodation in an attempt to seal the deal. Therefore why not only make the superior rooms available on this deal and only make rooms available in the periods you need occupancy. In my experience these “Packages” sold by Expedia attract bookings many months in advance and are more often than not sold to international visitors. As they only book this when it is bundled with flights and car hire, the traveller is far less likely to cancel or change their booking as their whole itinerary is planned to the max for the period of stay in Australia. Our data shows that the cancellation rate of these bookings, most of which are 6 months ahead of time is only 3%, versus the 28% + for usual OTA bookings. We see this as a massive opportunity for the Whitsundays which could be used to your advantage if the operator manages it well. Stop looking at the discount, look at the initial price, room offering and time frame first and use it wisely!

    1. I think the point is that Australian Tourism is SELLING out to the big American Booking.CON and Expedia. They use to push DIRECT HOTEL, BED & BREAKFAST bookings. Why not reach out to us directly as Dick Smith says keep the money in Australia as these OTA’s still DO NOT pay GST?

      What right do these bureaucrats have are you not in place to work for us Aussies?

      It is the same with Tourists going to the Visitor Information Centres all bookings are made through Wotif (Expedia) previously it was directly through the accommodation provider

  3. What shouldn’t be forgotten is the fact that Expedia charge 25% commission on accommodation if an airfare is booked at th ed same time as the accommodation. This is because as far as I know, airlines do not pay commission.

  4. Travailen,
    No one is mentioning here the fact that you as a supplier, if you do this deal with Expedia have to do it for every other OTA you may be on ” RATE PARITY” is what each provider has agreed to in their terms and conditions with any OTA platform across the board. All of us in the accommodation sector have a rack rate the rate we would like to get but everyone discounts that rate so in fact there is already a discount in place at the start. If you look at rack rates typically they are discounted 20 to 30% or more during a slow season add Expedia’s 15% commission and that’s “NOT NEGOTIABLE” plus the minimum of 10% Expedia wants on this deal. We don’t need a Royal Commision to see where that’s headed. As to the 25% Expedia wants if guests book flights as well, we personally don’t prop up Airlines bottom line so opted out of this after the first booking came through with a 25% commision.

    1. Hi Trevor

      I do hear you however the rate parity no longer exists between agents in Australia, only between your personal website and an OTA. So yes, if you offer Expedia a lower rate then you must offer it to others otherwise your personal website looks more expensive. However the beauty of the packages is that the consumer does not see the rate unless they are packaging their trip. So you still have your normal rate on the Expedia non package promotion which matches the other OTA’s.
      In addition why do you have a rack rate if you always discount it? How about the industry collectively goes back to seasonal rates of some sort and sticks to them. Think back tot he wholesale days where rates were full price, set in advance and the wholesaler sold them at a 25% commission. The fear factor of someone finding a lower rate at your neighbours property when searching on line is forcing the price down and hence making the 15% commission intolerable. No one would mind paying 15% on the rack rate as it would be more profitable than the old wholesaler pricing. So go back to rack rates and problem solved!

      1. If you don’t have a lower rate on your own website than what you you have on the OTA’s you have rocks in your head. Parity be damned. These parasites are not telling me what to charge directly.

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