Industry

Direct bookings: Governments can do more

Opinion: If governments aren’t informed about the damage OTAs do to our industry, how can they change?

Did you know each week, an average of $29.5 million leaves the Australian hotel, resort, motel and motor inn sector and goes overseas tax-free?* I’ll let you calculate the figure over a whole year.

Everyone knows the travel and tourism sector has been badly hit by Covid-19, and governments are propping up the economy with vouchers, schemes and allowances, but one of the biggest killers of this sector is the commissions paid to overseas travel agents when Australians don’t book direct.

The Australian Travel Vouchers scheme was a great initiative to promote regional Australian tourism. In fact, Victoria alone offered $22 million towards it.

My only frustration with this promotion was the lack of education to the Australian public to get them to book direct or buy Australian, which would have made sense and achieved the intended result. Instead, an estimated $3.3 million** that should have gone to regional accommodation and tourism operators went overseas tax-free.

Small regional accommodation providers are leaving letters in guests’ rooms, telling everyone who walks through their reception doors and informing callers that if they had booked direct, they would have received a better rate and a free breakfast, and that they would have supported local Australian businesses.

Then there are the State Tourism websites, which also use the overseas OTAs (online travel agents) as their primary booking engines.

Why do state governments utilise these offshore multinational companies for bookings on their own websites? Surely, they must know that commissions are sent overseas without any tax being paid? Or perhaps they don’t. So what can be done?

  • Speak with your local member. Show them an invoice from an OTA, showing how much has been taken from your bottom line in the past month or year.
  • Email your federal member and ask them if they’re aware of the damage that Covid-19 and OTAs are causing to you and your family.
  • Offer a better rate on your website and call it a sale, bonus or special. This is allowed under the narrow rate parity rules, which are dictated by OTAs.

Australian accommodation providers also need BIG voices to help spread the news to our politicians and governments to promote booking direct or buying Australian when they’re on TV or putting incentives together.

This is where the butterfly effect can really come into play. A single email from outback Australia won’t do much, but if this grows to thousands of emails to our politicians, we may take back some control of an industry in the grips of an insidious virus.

 

Chris Fozard

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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3 Comments

  1. We formed a co-operative in Port Douglas 5 years ago and paid for a consultant to extrapolate figures on the money flowing overseas to Booking.com and Expedia. We approached our local tourism board, our local council and our State and Federal members to seek assistance to address this issue. With over $12 million per annum being siphoned offshore in booking commissions from Port Douglas alone we figured someone would be interested. Even our industry body ARAMA were aware of the amount of money going off shore to Online Travel Agents such as Booking.com and Expedia but our concerns fell on deaf ears. With over 80 small hotel owners as members of the co-op in 2020 we again approached all levels of government during COVID and tried to get funding to write specifications for a Port Douglas Direct Booking website, again to no avail. However 4 major tour operators in this area were given $1 million each during COVID (one is not even an Australian company) It seems unless you are one of the big boys you don’t matter. Our local tourism board is made up members of these major tour companies – they advise the government on who gets assistance and what do you know – they got funded. You have to be a silver member and pay thousands in additional membership fees to get voting rights on this tourism board and even if you agree to pay the additional fees you can be refused. Our tourism bodies advertise and provide travel voucher schemes with “no book direct ” message which would assist small business owners immensely however taxpayers funds still flowed to these overseas companies . We don’t need to promote Australia as a destination or partner with booking.com and Expedia these days – I and most other TRAVELLERS USE REVIEWS AND SOCIAL MEDIA TO DETERMINE MY TRAVEL DESTINATIONS NOT ONLINE TRAVEL COMPANIES. We just need a user friendly online platform and our tourism bodies to back Australian small businesses instead of ignoring the problem.

    1. Yes Toni, it seems you have nailed the problem. Complacency! Just maybe a pollie ,with insight, reads you comment and the message that Chris is often on about too and acts. In Bendigo’s case it is estimated that ~ $2m leaves our shores.

  2. Watch these OTAs . I have had the same terms and conditions 48 hours prior to arrival for years then at the last Brisbane lockdown had 2 guests call to say they had tried to cancel with Expedia well within the period only to be told they were not entitled to a refund but could accept a voucher. On investigating with I was told my terms said no refund. I know it was never altered by me. Was only in the last couple of weeks. They finally paid me for the refund minus their commission. I am still in dispute with them for the full refund. Why should I refund the guest in full and they pocket the commission.

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