Labor’s plan will make booking accommodation much more affordable.
Did you know that you can often get cheaper accommodation rates by booking directly through hotel websites?
You can; only you may have to call hotels first to check which has the lowest rate.
Under existing laws, independent hotel operators cannot advertise lower rates that undercut larger online booking sites, but these laws would be outlawed if Labor wins the next federal election.
Labor claims that the “number one issue” facing Australia’s accommodation industry is how online booking giants such as Expedia and Booking.com use their market power to prevent businesses on their platforms advertising cheaper prices on their own websites.
While independent hotel and motel owners are copping a raw deal by using these larger booking websites, they feel forced to, in order to operate. But when doing so, they pay commissions between 10 and 30 per cent.
“They’re frankly gouging local hotel owners,” Shadow Assistant Treasurer Andrew Leigh told SmartCompany.
This is why YourLifeChoices has repeatedly informed it readers that booking directly with hotels will get them a better deal, as those who call providers directly or visit in person are offered cheaper rates than those who book online.
Mr Leigh believes it’s time for Australia to follow regulators in Italy, France, Germany and Sweden, who have already banned these pay parity clauses.
While Labor’s policy addresses pay parity clauses, it doesn’t really help independent hotels compete with larger platform’s online discoverability, which dominate search result listings.
This means smaller hotels and chains still have to use larger platforms to be noticed by potential bookers.
Some operators derive up to 80 per cent of their business from these larger platforms, but have to pay steep commissions, cutting into their bottom lines.
But the discoverability problem means they have little option but to use them.
Labor’s principal focus is to create “proper competition” by ensuring that consumers can go direct and save money.
“A platform like Expedia or Booking.com will invariably have a stronger presence online than any individual hotel but that doesn’t entitle them to be getting nearly a third of the booking fee,” says Mr Leigh.
The Australian Competition and Consumer Commission (ACCC) is also currently investigating pay parity clauses.
“The ACCC continues to look into potential issues within the online travel booking industry, including parity clauses, to see if further action is warranted to improve competition and business practice,” said an ACCC spokesperson.
The industry keenly awaits the outcome of the ACCC’s probe – as too should consumers.
“It will hopefully recalibrate the way people book,” said chief executive of the Accommodation Association of Australia Richard Munro.
Do you book your accommodation directly with hotels?
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