Sign It Or You’re Out! Aussie Hoteliers Arc Up Over OTA Contracts

Online Travel Agents and their rigid, take it or leave contracts are the biggest business concern for Australian hoteliers, a survey of 450 members by the Accommodation Association of Australia has revealed.

“The chief concern is around how the contracts are done,” says the Association’s CEO Richard Munro (pictured).

He says the global OTA contracts from the likes of the Priceline and Expedia conglomerates have no scope for negotiation.

“Hoteliers have  have two weeks to sign the agreement but no changes are allowed,” Munro says.

“It’s a take it or leave it proposition – sign it or you’re out.

“Small hoteliers have no negotiating power.”

Booking data from SiteMinder released this week shows that Booking.com and Expedia are the two biggest revenue channels for Australian hoteliers.

Munro says average OTA volumes for his members are around 30% but can reach 50% or even 60% in some cases.

Key clauses are rate parity, last room availability and commission rates, which range from 15% to 22%.

“They will also threaten to darken you if they  find you have breached the contract in any way,” says Munro.

“This means they will put the hotelier at the very bottom of the listing so customers don’t see them.” 

Another significant issue for hoteliers is the lack of regulation surrounding short-term accommodation operators such as Airbnb.

AAoA will be raising these issues at Federal Government inquiry next week Wednesday, February 14, into the impact global internet companies are having on Australian small businesses.

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