Accom in limbo over alleged OTA abuses

Accom operators are crying out for industry help to tackle OTA behaviour, more than a year after the ACCC began its review into the ‘conduct and practices’ of the dominant booking platforms.

Back in August 2018 a spokesperson for the consumer watchdog told AccomNews: “The ACCC is continuing to investigate the conduct of online travel agents in enforcing price and availability parity requirements with Australian hotels and accommodation providers.”

At that time, the Accommodation Association of Australia confirmed many of its members had already cooperated with the consumer watchdog over the investigation.

A year on, the ACCC says it is “unable to comment on any potential investigations that may be ongoing”, leaving accom operators in limbo over increasingly brazen OTA practices which they claim are damaging profits and threatening livelihoods.

We reported in March that Expedia and routinely pressure operators into matching the lowest rates of competitor OTAs, saying they will reduce the online visibility of those that don’t comply.

Now new online listing platforms such as Nustay are increasingly encroaching on the market, trawling the web for wholesale pricing, listing properties without operators’ knowledge and refusing to remove properties from their sites or reveal where they get their discounted rates from.

While they have distanced themselves from some of these new players, and Expedia are demanding rate parity from operators for the rates those competitors are charging. And the big two OTAs also stand accused of driving down rates in a similar way through their own discount affiliates, including Agoda and Booking.basic.

While operators are afraid to be named for fear of retribution by powerful industry bodies, one insider told AccomNews: “It’s getting terrible now. I have been in the hospitality game for about 30 years and its really getting dirty, the tactics that are going on.

“What I think the ACCC needs to do is restrict these sites, affiliates etc. They should have approval from a property to sell rooms. They are just going around doing whatever they want and covering their tracks.”

Another said of the online platform Nustay: “They won’t delete me, they say they can’t which I think is b***shit. The list of excuses just goes on and on.

“We’ve also had issues with Agoda, Ctrip and Booking.basic.

“The trouble comes when somebody walks in off the street and you say ‘the room is $150’ and they pull out their phone and say ‘here it’s $137’.

“If I don’t honour that, the customer’s going to walk and he doesn’t want to hear ‘oh, this is a rogue OTA’.”

Tourism Accommodation Australia CEO Michael Johnson says the organisation is working to end the process of OTAs distributing rates without permission.

“Recently at a revenue managers advance training course, TAA asked if anyone had heard of Nustay – no one was actually aware of the organisation – but I was able to show each and every one of them, they had rates on this new platform without any consultation with them whatsoever,” he said.

“Obviously, the concern is the OTAs are distributing rates without permission. This process needs to stop and TAA will continue to have talks with OTAs to bring this practice under control.”

An ACCC spokesperson told AccomNews that under the Australian Consumer Law, businesses are prohibited from making false or misleading representations.

“Online travel agents must not claim they have commercial relationships with accommodation providers unless it can be substantiated,” he said.

Dean Long, CEO of the Accommodation Association of Australia has described the issues of rogue OTA behaviour as the organisation’s “number one priority”.

 “AAoA is working hard to stop this behaviour as we know it makes it harder for accommodation providers to operate,” he said.

“Federally, it is our number one priority for government action and we are calling on the new Liberal government to support our industry and put an end to these unfair arrangements.

“AAoA is the industry leader on this issue and we will continue to be, as we are working with the ACCC and other government departments to ensure they understand the impacts on our sector.”

One operator, who again asked not to be identified, has called for the industry to run an awareness campaign educating the public on their booking options.

“It would be nice to see the Australian government, ACCC and tourism councils get behind the small hotel/motels and do a campaign to tell Australians that by using these companies they are funding overseas economies rather than booking direct, getting a better deal for booking direct and keeping Aussie dollars in Australia,” he said. 

“We would gladly disconnect from all of the OTAs, but a number of our bookings come from overseas guests who use these platforms.”

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4 years ago

The more we sit in limbo the more we allow OTAs to play divide and conquer. They have already convinced a large proportion of the public that they represent guests’ interests in the best way, through highly misleading pricing on search engines, through bogus cashback “rewards” or the ease with which one can post just any type of review, whether actually true or not. Many do not care that OTA commissions of 15 to 25 percent eat away a small hotel owner’s housekeeping budget and/or refurbishing budget. Standards are going down nationally because of them. Either they revert to 10 percent commissions or something must be done about them, it’s a crisis…

Reply to  Lidge
4 years ago

Agree wholeheartedly Lidge, The OTA and Metasearch grab is a total mess and unsustainable. It gets worse and worse, now siteminder is charging 16.5% using their demand plus – for a direct booking!

Reply to  Warren
4 years ago

Unfortunately, the lure of the global big leagues is too hard to resist: Siteminder started here but is now a global company since it was bought by Airbnb last year.

Question is, what are we prepared to do about it, honestly ? The govt can’t take us seriously because we don’t even know exactly what to ask for…. in my opinion, eliminating rate parity obligations would not be enough. After looking at Phocuswire, where xpedia ceo says his co is “at war” over clients’ booking experience, it’s pretty clear that not even Dick Smith has enough lobbying resources to take on those of the global companies, although his heart is in the right place. I’m very afraid it might just be us who will turn out to be unsustainable in the long run

4 years ago

love the idea of an advertising campaign letting consumers know that the money is going overseas. Also that certain companies such as Trip Advisor, Trivago, Hotels combined, etc are not necessarily showing the best price available (they only show OTA’s and not direct website bookings).

Peter Beck
Peter Beck
4 years ago

OTA’s how to wreck a viable industry into a basket case and no one seems to care. It doesn’t affect the top end of town but the small owner operators kills them. There goes the refurb budget the marketing budget the profit gone gone gone

Reply to  Peter Beck
4 years ago

Yep. If we don’t get together as independents, the big players aren’t going to shed any tears for us. We’ll be ripe for the picking. Someone’s already started, check out the Collective bargaining class exemption submission by Cable Beachside Villas on the website of the ACCC.

Dave Lachlan
Dave Lachlan
4 years ago

I am at a lose to why hotel/motel operators advertise their rooms on OTA’s or why they don’t have high nightly prices. The industry needs to toughen up and stop the OTA’s from taking control of their businesses.
The consumer will eventually go back to ringing the properties direct and getting better rates or their corporate rates.
Quest Apartments, Best Western, Quality Suites etc… need to have their CEO’s , Chairperson, Marketing Managers etc take a stance for the operators.

Howard Argus
Howard Argus
Reply to  Dave Lachlan
4 years ago

The reason why we advertise on the ota`s is because people won`t book direct for some unknown reason , even if the price is cheaper . We live in a small country town in Victoria with 3 motels and a caravan park . When you do a search for accommodation the first half of the page is ota`s then followed by all the motels websites, for us , we have our rates set at 12% less than we advertise on the Ota`s and yet we have less than 3% of online bookings from our website even though we have cheaper prices on our website and we are on the first page of any search. So if we don`t put our motel on there we would get pretty much nothing from online except a few that decide to go to our website . Now that is in a small country town with 3000 people in it with only a few motels. I can only imagine how hard it is to stand out in the city

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