TAA View – May2014


TAA Time to speak up for the consumer
benefits of licensed operators

By Rodger Powell, managing director,
Tourism Accommodation Australia


TECHNOLOGY has made it much easier to bypass licensed operators – whether it be taxis, hotel companies or travel agents – and to some extent we are responsible for letting these (very often) illegal operations flourish.

As every travel agency will know, there is a very good reason for licensing (or the voluntary ATAS accreditation scheme which will replace it from July 1) – it is to protect customers.

However, travellers are often swayed by the “new” and “sexy”, rather than thinking why licensing, accreditation and regulations are so integral to the travel sector (or any industry for that matter).

Services such as Uber for taxis and Airbnb for hotels have received considerable coverage over the past year, and most of it has been unquestioningly positive. For instance, the AFR wrote recently: “Uber is the smartphone app connecting those who are sick of smelly taxis driven by people who don’t know where they going. Uber customers never get driven in clapped-out Ford Falcons.”

Such opinionated – and generally incorrect – assertions went unchallenged, and there was little written on the fact that licensing is designed to protect customers and ensure they receive the best and most reliable service.

What happens if a passenger in an unlicensed car is involved in a crash or has something stolen? What recourse do travellers have against unlicensed operators? That should have been the line of questioning.

In the accommodation space, web-sellers such as Airbnb are considered the “bright new thing” rather than opportunistic operators who want profit without any obligations.

The industry needs to argue its case more vociferously and via all media, highlighting that a fair share of a hotel bill is as a result of a commitment to standards, and an emphasis on ensuring reliability, safety and consistency. Licensing does add to the cost, but in most cases is designed with the customer in mind.

A fightback against Airbnb has begun, with New York making it illegal in 2011 for property owners to rent out short-stay apartments for less than 30 days. Now San Francisco is trying to curtail Airbnb as are European destinations including Berlin and Paris.

The New York law centres around protecting the safety and security of full-time residents and tax avoidance, rather than the fact they are undercutting the licensed hotel industry. Their Attorney General is now trying to force Airbnb to disclose information on property owners who feature their residences for rent on the site, which could threaten their marketing model further.

However, we shouldn’t let it get to that stage. We need to raise issues that are conveniently forgotten by sites like Airbnb. For instance, it needs to be pointed out that insurance companies like AAMI have announced that they will not cover theft, malicious damage or accidental damage caused by guests staying in residential host properties.

And who knows what would happen if a guest was injured on unlicensed premises? That is the sort of question that needs to be asked.

Yes, we need to work closely with regulators on this, but we also need to argue the case thoughtfully and carefully in the public sphere and highlight all the ramifications of using unlicensed operators, while also arguing the benefits that licensed operators offer the travelling public.