Two overseas multinational companies control up to 85 per cent of online accommodation bookings in Australia. Most of the bookings are for the small businesses that provide accommodation such as hotels, serviced and holiday apartments, and guesthouses.
This power imbalance is reflected most forcefully by the use of “price parity clauses” - contractual terms between hotels and online travel booking platforms.
Price parity clauses prevent an accommodation provider from listing a better offer on their own website.
Meanwhile, commissions taken by platforms, which face small marginal costs, have increased in recent years, and can be 15-30 per cent of the total accommodation fee.
This outcome is not fair for Australian small and medium sized accommodation providers and bad for consumers looking for the best deal.
1. Amend the Competition and Consumer Act 2010 to ban price parity clauses between online travel agencies and accommodation providers.
2. Support the competition regulator to use a market study to inquire into price parity clauses across other platforms and industries.