On 2 September 2016, the Australian Competition and Consumer Commission announced that it had entered into an agreement with 2 of the largest online travel agencies in the world. Under the agreement Booking.com and Expedia (including Wotif) have agreed to amend room price and availability parity clauses contained in their agreements with various Australian hotels and accommodation providers effective from 1 September 2016. In its media release, the ACCC noted that in the past:
“Parity clauses generally require accommodation providers to offer best price and availability to online travel sites. This guarantees the online travel site the accommodation provider’s lowest rate and prevents competitors and consumers from negotiating better deals directly with the provider.”
The ACCC noted that the benefit to travellers of the recent agreements is to remove the barriers to price competition between major online sites for hotel bookings. And “Australian accommodation providers will now be able to tailor their offers to better meet the needs of their customers and their own businesses requirements. They will now be able to offer lower rates through telephone bookings and walk-ins, offer special rates and deals to customer loyalty groups, in addition to offering deals via Expedia and Booking.com.”
But does the agreement struck by the ACCC go far enough to provide customers with the best deal or provide any tangible benefit to accommodation providers? An article on the website Travel Trends suggests that the industry doesn’t think so. In that article it was noted that:
“By far the biggest concern is that operators of accommodation businesses are prevented from advertising on their own websites a 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.”
An article published on News.com.au notes that both France and Germany have recently outlawed the practice of online travel agents being able to dictate what hotels can and can’t do with their own room rates.
For the moment, the message for travellers in Australia is – email or telephone the accommodation provider directly to get the best rate.