AFTA view: Price parity conflicts

Jayson Westbury, chief executive AFTA

Price parity conflicts

Unfortunately, the debate and conversation within the Australian community about hotel booking sites and the need to book direct has taken a more confusing turn than perhaps was necessary, off the back of a public video rant by prominent Australian Dick Smith. For those that have not managed to watch the video it can be found on Facebook, but having said that, for most Australian travel agents it will make you cringe.

The ACCC took a decision several years ago to grant permission for the two large American based OTAs and their subsidiaries to impose “price parity” clauses within the booking contracts they hold with Australian hotels and motels.

What that means is that the hotels and motels who have signed up with these OTAs or hotel booking sites are not allowed to price rooms on particular days lower than the price they provide to the OTA. You might recall that the ACCC pursued one of the most prominent Australian travel companies for the exact same practice, but in that case relating to airfares.

It has been something that AFTA, along with the hotel industry associations, has been taking up with the ACCC for some time. How can it be that a couple of American companies can be granted rights to do something that the High Court of Australia said an Australian travel company can’t do, when the applicant to the case was exactly the same government authority — the ACCC?

While Dick Smith in his rant is attempting to say that it is better for Australian small business for consumers to book direct rather than by the American OTAs, the problem is that the message gets all very confused as it unfolds.

It is important to note that the CEO of the Accommodation Association of Australia (AAoA) has made it clear to me and is on the public record supporting Australian travel agents. However the downstream impact is a confused message to consumers.

The simple fact is that this complicated messaging has in fact been caused by the ACCC. Even the chairman of the ACCC appears to be confused about what message should be sent to consumers. He has suggested travellers should book direct by telephone as they may get a better deal. It is 2018, right? I am sure that a message to most people that includes picking up the phone is unlikely to resonate as the best way to make a booking for a hotel.

The ACCC should apply the same rules to these American OTAs as applies to all Australian OTAs and for that matter travel agents. A level playing field should be made available to all suppliers and distributors regardless of the format, and for my money if the Australian High Court has interpreted the law in a clear way then that should apply.