Australian Labor Party to ban accommodation rate parity

Telegraph Retreat Cottages welcome the announcement by the Opposition Competition Minister, Andrew Leigh, that Labor will legislate to end the awful rate parity clause imposed by the online booking agencies. For our customers this will mean that we can finally offer better rates on our own website, where high rates of commission don't have to be paid to overseas booking sites.

AccomNews issued the following press release this morning following the historic announcement:

Opposition competition minister Andrew Leigh has committed to legislating against the rate parity clauses contractually imposed on accom businesses when they market through the two online travel agencies (OTAs) which dominate online bookings globally.

Under current laws, the clauses prohibit operators from advertising prices on their own websites which are lower than those on Expedia or sites.

Operators are charged between 15 to 25 percent for each booking made through an OTA, with the two US giants accounting for 84 percent of online bookings for Australian properties.

Those defying the rule have seen have their property listings “darkened”, which means they are made almost invisible online by being pushed to the final pages shown to prospective customers.

Leigh told journalists at Brisbane’s Manly Marina: “Increasing competition helps drive costs down for consumers by correcting the power imbalance between small business and the big end of town. It’s good for Australian consumers and it’s good for Australia’s economy.

“Our local hotels want to be as hospitable as possible, but they’re paying a huge chunk of their revenue to the booking platforms, and losing their direct contact with guests.”

An industry insider told AccomNews it was now likely the Coalition would follow with a similar policy announcement.

The parity ban follows a prolonged campaign by leading industry bodies for action from the Australian Competition and Consumer Commission over the imposition of parity clauses.

The ACCC is in the final stages of its long-running investigation into OTA practices and may soon announce its own intentions to act on rate parity.

Richard Munro, CEO of the Accommodation Association of Australia, told AccomNews: “The AAoA welcomes this historic announcement from the Labor Party.

“Effectively this means that our industry will, should the Labor Party win office, be able to finally offer the best rate directly to our customers without fear of being darkened or threatened by these big multinational OTAs.

“This announcement is very welcome for our members and the industry across Australia, the winners will be the operators of small business and the public who can finally get a better deal by going direct online once this legislation is passed.”

Under current ACCC rules, properties are only able to offer lower rates than those advertised by the OTAs for direct bookings over the phone, in person or through loyalty programs.

Munro said: “The fact that any operator of accommodation is unable to sell a lower rate online is an outrage and does not pass any fair test and the public are getting a dud deal when they do not book direct or via a bona fide ATAS-accredited Australian agent.”

Industry surveys show price parity clauses are the number one complaint from hotel operators. They have been banned in several European countries, including Germany, Italy, France, Sweden, Belgium and Austria.

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