Direct bookings: Are governments doing enough?

Opinion: A simple message from our state and federal governments is what is needed for an industry in damage control – BOOK DIRECT!

Op-Ed by Chris Fozard, Operations Manager of Budget Motels

I write this sitting in my loungeroom as Melbourne’s Lockdown 5.0 is extended indefinitely, and COVID continues to lockdown other cities, regions, and states. I watch again as trust in our industry takes another hit and is now at an all-time low as travellers are hesitant to commit to future travel plans, and instead are waiting until the last minute to make bookings.

The future is uncertain, this we know, but a repercussion of this is that we can’t yet see a realistic timeframe of when Australia could expect to be opened up to international travellers, and we have focused our efforts on promoting travel of this amazing country to our domestic markets.

We all see the advertising for beautiful places, amazing experiences and incredible people, but we’re not seeing the BOOK DIRECT message on anything. 

It continually falls to the property owners and industry leaders to try and keep the travelling public informed about the damage that Overseas Online Travel Agents (OTA’s) do to our industry, but we need the politicians to help as well, starting with instructing their departments to BOOK DIRECT as many currently use the OTAs.

After surviving through bushfires, floods and pandemics, motel owners need to keep 100 percent of their booking and not pay up to 50 percent commissions to non-Australian, Overseas Travel Agent companies.

COVID sees Australia’s accommodation industry on a rollercoaster ride, and while we can report an increase in direct bookings for regional accommodation to an average of 10 percent, a 25 percent increase from this time last year, a push to support local Australian business will make it higher – where it needs to be!

In 2018 Charles Ikstrums (Budget Motels Chairman) and I had the privilege to work with Dick Smith on his viral video where he talked about the impact the OTAs have on this country, and in the short term, we saw a noticeable jump in direct bookings, which was what we hoped to achieve. However, many guests have fallen into their old habits of using the OTAs.

We need to again push the BOOK DIRECT message.

Some of the initiatives that our members do are, leaving a letter in the guest’s room explaining the difference between an OTA booking and a direct one.  Some offer free cooked breakfast when guests book direct, others a discount on the room rate, it doesn’t matter what it is as long as the guests feel that they’re being rewarded for booking direct, they will change their habits.

Our government officials are on TV pretty much every day now, and would it be too much to ask them to sign off with, “BUY AUSTRALIAN” or “BOOK DIRECT”?  I think it’s the least they can do.

Bio: Chris Fozard, Operations Manager, Budget Motels

Chris Fozard, Operations Manager of Budget Motels

After 6 years with the Royal Australian Navy, I moved into the hospitality industry.  I’ve worked in almost every aspect of the industry, from cleaning, bar-tending through to motel and hotel management. During this time I also worked with disengaged youth for 6 years, however, accommodation and hospitality are my passion.

In 2016 I came to the Budget Motel Chain and the UseROSS Channel Manager, and it’s been a fantastic experience where I have been able to focus my passion for the industry and work towards taking back some of the control the OTAs have slowly taken from property owners.

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  1. Couldn’t agree more!!!
    As the President of the Bendigo Motel Association I’ve been canvassing for change to the terms and conditions on the Victorian State Government Travel Voucher scheme to simply that. Book Direct! It’s the most simple and most supportive message they could deliver for our struggling sector. Now is the perfect time to share the love, spread the message and educate the general public. We’ve seen a number of “love your local” campaigns and it’s the same message. NOW is the time. This message has the opportunity to provide much needed support for our industry.
    We need action now, conversation is required. No more government ignorance around this concept.

    1. So frustrating!!! The ultimate slap in the face comes when Government funded tourism bodies (such as Tourism Queensland in our case) partner with OTA’s!!!

        1. James and Chris,
          Same story down here in Tassie.
          Last year when the Government released the Travel Vouchers I wrote letters to the Editor and even to the Speaker of the House of Assembly explaining the advantage of the whole Book Direct concept and suggesting making it a condition of the use of the vouchers that the users book direct. I got a reply from the Speaker saying what a brilliant idea and that she was going to take the idea to the Premier….and that’s where it all stopped. Tourism Tasmania also recently promoted a partnership with Expedia??? If one subscribed to conspiracy theories one might think that these OTA’s contribute substantially to Government election coffers Australia wide and that is why they are reluctant to promote anything against the OTAs.

    2. Kristyn,
      Charlie Loftus was on the Board of the Budget Motels, and he was quite vocal about the travel vouchers as well. (must be something in the water in Bendigo…)

      Thanks for you comment, and feel free to pass this link on to anyone that may be able to help us in the push to, “BOOK DIRECT”.

  2. Well said the both of you. ARAMA believes that everybody who is involved in Accomodation should push the Book Direct method. We are greatful for any Government assistance in the form of travel vouchers and would be even more grateful if the vouchers were conditional on booking direct.

    1. Hi Trevor,
      Thanks for your comment, and yes we all need to push the BOOK DIRECT message more, and hopefully we’ll get a few government officials saying as much on tv soon!

      By the way, keep up the great work you do too Trevor!

  3. Top article & replies.
    My husband & I have been in this industry for 19 years. As a small business owner it hurts everytime I have to pay the OTA commission. As our area is flooded with alot of holiday rentals we struggle to get our share of the market. Air BNB is becoming another major problem, as they are not regulated to ensure cleaniness etc and they also do not pay business fees to councils & industry bodies etc.
    Market presence on the Web is such a hard place to get a footing as the OTA’s pay big money (our tax free commissions & get good rates) to Google etc.
    Governments are also missing out. The OTA’s do not pay our Goods & SERVICES TAX, surely this is a “service” provided in Australia.
    BOOK DIRECT, save our small businesses, and your hip pocket.

    1. Thanks Kaye,
      I couldn’t agree more about your OTA comments.
      We at Budget Motels love to drive the BOOK DIRECT message, and will continue to for all property owners across Australia, especially in regional areas that seem to be overlooked at times…
      If you’d like to help pushing the message, please feel free to give us a call. (03) 9784 4111.
      Thanks again.

  4. Great to push the ‘Direct is Best’ line for sure. Who could disagree with you, Kristyn, that the voucher campaign is a perfect opportunity to raise the stakes on this?
    However, is it always true that guests obtain the best deal when coming direct? Do some of us in the industry let ourselves down when we seek a higher price than the OTAs? Also, are our own websites sufficient and up to date enough to allow ease of bookings that show a benefit beyond what the OTAs offer?
    Moteliers should endeavour to always demonstrate that by coming direct the guest will not only achieve a better price than offered by the OTAs, but also provide an explanation as to how this is possible ie. by pointing to the ~15% commissions charged but usually unknown to the guest.

  5. It is no good complaining about the OTA’s because the government on all sides are now either tone deaf or the OTA’s have bought enough of them.
    Be real people, no one is going to help you!!
    I have found a way of halving my OTA commission and really it is quite simple. I am presuming you have good website, because that is very important for several reasons.
    Firstly you must use two servers, then you can adjust variances in your prices. I use my PMS for my booking button Expedia and and Channel Manager to hook into the GDS.
    I have them all at different prices with the OTA’s up to $40-00 dearer on certain days and still people book! The clever ones book direct electronically or by phone.
    If more people took this direction, more would then be booking direct. There has to be a saving to the customer. So normal price direct and OTA special covering all the other expenses. The interesting thing has been that you can experiment by seeing what price people are actually prepared to pay. It may surprise you.
    So there you have it, problem solved and you make more money.

    1. I agree with you to a certain extent, Charles.

      The truth of it is that the OTA’s saw an opportunity at a State level to embed themselves in STO’s. Most state governments have cut their budgets so the big OTA ad budgets were and are very attractive. It’s a very powerful ‘tool’ in their toolbox.

      Secondly, what also does not help is the rebates and commissions the large hotel chains receive from the OTA’s. The thinking being if the big hotels offer parity pricing, the smaller ones are then forced to.

      We don’t offer parity pricing. Our book direct pricing is set as only part of the inducement. We offer a reward during the guest stay. And when delivering that reward, we explain the importance of book direct and the costs to the Australian economy of OTA’s.

      On the 22nd May, 2015 I wrote a detailed letter to the then Treasurer, Joe Hockey and cc’ed Josh Frydenberg, Malcolm Turnbull and Andrew Robb about the economic effect of OTA’s. Still waiting for a reply.

      We can’t rely on Canberra to fix our problems.

      1. HI JULIAN, Nice to have a comment on my experience.
        I do have replies from The Prime Ministers office ( Malcolm Turnbull). I have tried your methods and it only causes problems from some of the customers. The customer now has an option to pay more, which is fine. If more room providers did the same thing the message would quickly spread. The problem could be quickly solved without Government intervention. Cheers. Charles

    2. Hi Charles,
      Not sure about the 2 servers you mentioned, seems a bit confusing for those who aren’t up on computers.
      We have a simple way to adjust prices to recoup some, if not all, of the commission the OTAs charge, by using our channel manager.
      The room rates that we put into the Channel Manager are the same for all channels, thereby adhering to price parity. But by adding different percentages of commission on different OTAs, we are keeping our own website the cheapest, therefore enticing the guest to call and book direct. Our Channel Manager makes it so easy for us to do.
      Keep promoting the BOOK DIRECT message, we have successfully converted most of our guests. with only about 15% using OTAs.

  6. Totally agree with Chris Fozard and all who want to get rid of OTA interference and commissions.
    The Govt by default or design has allowed the OTAs to tag along and feast on our taxpayer funded Covid 19 recovery and stimulus packages, simply by saying nothing about BOOK DIRECT. Hoe hard can it be ?

    We complained to the ATO about OTAs not paying GST or income tax in Australia by claiming that the sale transaction with the guest took place somewhere else. We requested the same conditions but were told we had to pay GST and income tax on the sale because it took place here in Australia. More nonsense.

    Just continue to educate the guests face to face and turn any booking you can into a direct booking any way you can and save the commission.

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