It’s fair to say that the humble Australian traveller didn’t have it all their own way this week.
In an acutely inflationary environment exacerbated by high oil prices, some of the bigger stories that Travel Daily reported on represented a range of new threats to the already-fraying hip pockets of Aussies.
The week started off with the news that The Maldives would resist a growing chorus of dissenting international voices and push ahead with its 17% tourism tax on inbound products sold by overseas businesses – including travel agencies.
According to the country’s budget papers published last year, the rationale for slugging businesses selling Maldivian tourism packages from overseas markets was to create a fairer tax system for all operators and enable the collection of GST on hotel rooms bought in bulk and sold by offshore booking platforms and tour operators.
As a result, booking platforms that sell Maldivian tourism products are now required to register for GST and taxes will be imposed based on the country’s vendor registration model.
While some of the bigger OTAs and agencies selling The Maldives in Australia declined to comment on the development, Australian Travel Industry Association CEO Dean Long told Travel Daily that the decision marked a “dramatic overextension of [the Maldivian Government’s] powers that has not been thought through.”
Long added that ATIA had expressed its concerns about the ramifications of the decision with the Maldivian authorities and would continue to work through official channels to advocate for change, including via the Australian Government.
Logically, the fear now is how much of this impost will be passed on to consumers by sellers and what impact that increased price-point will ultimately have on demand.
There have also been serious concerns expressed by UK travel sellers and bodies around the commercial viability of continuing to sell any travel packages to the Maldives moving forward, which are no doubt similar to questions being mulled by some Australian-based businesses this week as well.
But it was not only destinations pitching for consumers to fork out more for travel, with reports suggesting Qantas and Virgin Australia are reportedly in agreement that consumers should help foot the bill for the Federal Government’s plan to accelerate the migration from fossil fuels to sustainable energy sources.
According to sources cited by The Australian, the country’s two biggest airlines are lobbying for a green levy to be paid by Aussie travellers on airfares to offset the costs involved in participating in the government’s green energy plans, with their formal positions now in front of policy-makers as industry consultation continues.
While it’s admirable that the government wants to insulate the country from major oil shocks and push ahead its green agenda, it is also true that a levy on top of high airfares in the present climate would create an unwanted headwind as travel demand out of Australia attempts to heal from the bruises inflicted at the height of the Iran war earlier in the year.
Speaking to Travel Daily about the mooted green levy, former Australian Airports Association chief Simon Westaway said it was one of the only effective mechanisms to make the transition to SAF a reality.
“Australian aviation does have obligations to pursue more sustainable pathways as a future facing, internationally renowned sector,” Westaway said.
However, the respected aviation expert cautioned that any such move would also need to be weighted against the high costs already
being paid by travellers, adding that air travel was not like purchasing milk and bread.
“There’s a ceiling,” Westaway said.
This week also saw the implementation of new RBA rules prohibiting card-payment surcharges.
In response, the Australian Travel Industry Association (ATIA) released a six-part fact sheet for members, covering several key items of concern, including which cards and transactions are affected, how to review provider arrangements, lower-cost options such as PayTo and PayID, and advice for offering discounts for lower-cost payment methods.
While the body undertook extensive lobbying to warn against implementing the RBA changes – which did yield a three-month delay – ATIA confirmed it would continue to push its case with the Reserve Bank.
“We fought this change hard and we will continue to raise our concerns with the evidence the RBA has based its decision on,” ATIA CEO Dean Long said.
My colleague James Bale also checked in with Complex Travel Group director Mark Trim, who believes the RBA changes could also open the door to overseas agencies gaining an advantage over Australian-based sellers.
“There are many offshore agencies that distribute into Australia via metasearch engines [Google Flights/Skyscanner] and we would assume these companies will continue their race to the bottom on lead-in price,” Trim said.
“This will likely have a negative impact on Australian-based agencies based on consumer perception of the lead-in levels relative to a conversation around booking fees.”
Meanwhile, senior journalist Zach Havard was in Melbourne this week to cover the Mobile Travel Agents (MTA) national conference, a network which is now fully owned by Helloworld.
The travel giant had owned 50% of the agency business for close to 10 years, and late last year exercised its option to purchase the remaining equity in the business.
In his address to delegates yesterday, Helloworld CEO Andrew Burnes said its agency networks remained strong despite a challenging economic environment, stating that more customers are visiting its agencies and more people are seeking to join its network.
“The facts are that we are growing,” Burnes said, pointing to the scale of bookings being made through advisors, including cruise, hotel and flight reservations within MTA.
Burnes’ words followed similar sentiments expressed by the Helloworld chief in August, where he talked up the company’s strong pipeline of new retail agencies as vindication of the ongoing value that consumers place on expert human travel advice.
Before I sign off, as a dyed-in-the-wool Roosters fan it would be remiss of me not to shamelessly use this forum to drum up some last-gasp support for my beloved NRL team.
While most of the country will be barracking for an upset win for the Newcastle Knights after claiming the wooden spoon just last season, as a boy from Bondi who grew up worshipping Freddy Fittler, I will be hoping the fairytale doesn’t come true on Sunday.
Just this once, I hope the giant catches that pesky Jack before he makes his way down the beanstalk.
Go the chooks!
