Australia’s competition watchdog, the ACCC, is investigating the contentious practice of parity pricing in the accommodation industry to see if it constitutes anti-competitive behaviour.
The ACCC is asking for submissions from hotels about the price parity clauses imposed by online travel agents that prevent contracted suppliers from offering lower prices.
It also wants to know how price parity clauses operate with last room availability clauses (that is ensuring all inventory is available to OTAs).
The Accommodation Association of Australia has encouraged its members to participate.
“It’s vital that the voices of individual operators of accommodation businesses are heard in this debate,” said the Association’s CEO Richard Munro.
“Concerns about a lack of competition in the online travel agency market were raised at the time of Expedia’s takeover of Wotif.com last year.
“These were amplified when operators were recently notified that the other dominant player in the market, Priceline (Booking.com), would increase the commission rate that it charges accommodation operators from 12% to 15%.
“Our industry is facing a similar scenario to the dominance that the two major supermarket chains have in Australia’s retail sector.
“The more that the two leading players are able to dominate the online travel agency market, the more that margins in our industry will be squeezed.”