Hotelier Outrage Over ACCC Rate Parity Agreement With Booking.com and Expedia

Australian hoteliers have blown up over the “secret” agreement between the Australian Competition and Consumer Commission and the online travel agent duopoly of Booking.com and Expedia, which allows the global retail duopoly to prevent hoteliers offering cheaper prices than them online.

“We think the ACCC has gone about it in completely the wrong way – we’re incensed about it in fact,” said Richard Munro from  Accommodation Association of Australia.

“We have written and sent four letters to the ACCC specifically around this issue over the past 12 months and haven’t heard back”.

“They won’t engage with us but obviously clearly have engaged with the OTAs to work out an agreement that suits them.”

Mr Munro said the accommodation industry is outraged. “I’ve had so many calls from people today who want to sign and up and join the fight.

“It really has struck at the core of the industry – rate parity is the number one issue”.

Under agreements, Booking.com and Expedia have agreed Australian hoteliers can offer cheaper rates through offline channels or closed user groups such as loyalty clubs.

But not their own websites.

“By far the biggest concern is that operators of accommodation businesses are prevented from advertising on their own websites at lower room-rate than what these online travel agencies display.

“The ACCC has seemingly overlooked the fact the internet is easily the number-one way consumers book accommodation.

“Effectively, this means the online travel agencies can still dictate – from their offshore headquarters – to small motels in regional Australia what price they can charge for providing a service, when many of these accommodation businesses are struggling to be profitable.”

Tourism Accommodation Australia CEO Carol Giuseppi said her organisation had been in constant dialogue with the ACCC but was disappointed with the outcome.

“TAA welcomed the chance to be included in discussions with ACCC, but has advised ACCC that in its view the agreement doesn’t go far enough to protect hotels and consumers.

She said “the decision to allow OTAs to prohibit hotels from offering lower rates online clearly”lessens competition and is detrimental to hotels and travellers.

“The ACCC it should have insisted that OTAs allow hotels to set their own rates online.

“Hotels will only be able to offer cheaper prices than an OTA over the phone, over the counter or via a loyalty club.

“Smaller hotels in particular feel very vulnerable to the power of the global OTA duopoly.”

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2 thoughts on “Hotelier Outrage Over ACCC Rate Parity Agreement With Booking.com and Expedia”

  1. Hi Martin
    you forgot to mention Expedia’s “Mates Rates” deal, where Wotif seems to be discounting their commission to undercut their suppliers. This seems totally wrong as it is being done purely to undermine the suppliers integrity and to create the illusion the cheapest rates are only available from the OTA’s .
    It seems to be part of a long term strategy by the big players to get all bookings ( including walk ins) through their booking systems. It is increasingly common to have people sitting out an accommodation property making a booking on line rather than walk up to reception and book direct and this is happening because the general public are being brainwashed into believing it is more expensive to book direct with the property owner and cheaper to book through an OTA.

  2. …and they still do NOT pay 1 cent tax in Australia! Netherlands based company my arse. They are Priceline USA !!!
    On a recent bill I noticed aside from the 15% Commission. A 10% VAT, tax? Where the hell is that allegedly paid?

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