Hotels

ACCC weighs in on Dick Smith’s “extortion” claims against booking sites

The Australian competition watchdog is encouraging Aussies to call hotels, rather than rely on booking sites if they want cheaper rates.

Speaking to the Guardian Australia, Rod Sims, the chairman of the Australian Competition and Consumer Commission, said there’s a “very good chance you’ll get a much better price” if you chose to forgo trawling the booking sites and book direct.

This comes just a week after Dick Smith made a video calling out US accommodation websites for “ripping off” family-owned small accommodation providers in rural or drought affected areas.

Personally, we love any video that starts with “Dick Smith here and I’m bloody angry!”

You can watch the delightful rant here.

In 2016, the ACCC brokered an agreement that lets small hotels give discounts over the phone they can’t give online, thus Smith and Sims’ insistence on jumping on the phone.

The Guardian conducted a survey to test this one out and found that across four capital cities, you can save up to 18 per cent in some states when you book over the phone, compared with Booking.com and Hotels.com.

“Once you find a hotel you want, ring them up,” Sims told the Guardian.

“I can’t guarantee it will happen every time, but I would think in the majority of cases you would get a better deal.”

Richard Munro of Accommodation Association of Australia (AAA) has also joined Smith in calling on consumers to boycott booking sites for “extorting” small businesses.

Smith told the Guardian that some small hotels will lose 50 – 70 per cent of their bookings if they don’t sign up to the sites, which charge commissions of up to 25 per cent.

Sims said its very likely that the sites are hurting Australian businesses, and confirmed the ACCC would look into allowing hotels to advertise cheaper prices online.

“At first they were good. They gave hotels a wider audience than they would otherwise get,” he said.

“But they have become so universal now that a lot of hotels and motels believe that they won’t get any business unless they are signing contracts with these entities.”

Munro said the AAA will call for the ACCC to outlaw price-parity clauses completely.

SEE WHAT PEOPLE ARE SAYING

6 responses to “ACCC weighs in on Dick Smith’s “extortion” claims against booking sites”

  1. Wouldn’t it be great if the AAA actually did something proactively rather than re-actively …

    Dick Smith is spot on, and surely this is exactly what the AAA should be doing – a nation-wide campaign extolling to the public why it is best to always book direct (rather than a perpetual running commentary by press release).

  2. The concentration of market power enjoyed by just 2 major players, in concert with Google’s Adwords virtual monopoly leads to a serious imbalance. The ACCC’s ruling in 2016 simply endorsed price parity clauses.
    Ultimately, the consumer will benefit in terms of more competitive rates if smaller touurism operators are allowed to offer their best pricing in any way they see fit.
    Restricting this to a phone enquiry is archaic, inefficient and for logistical reasons will often not achieve the best rate available to the consumer.
    Once again, the ACCC doesn’t seem to “get it” !

  3. Dick well done!!! for taking on this battle for Aussie small hoteliers, One thing is guaranteed and always in consumers favour. Lets be smart about it, use these sites to get the best deal, then with googles help find the contact number and call hotel directly they will always match or are cheaper than the booking sites.

  4. It goes deeper than the commission rates. They try to run your business. I cancelled a booking from a blacklisted guest. Booking.com told me I could not cancel it. After a heated discussion, I was told in future I had to have a police report, send it to them (in the Netherlands) and they would decide whether it was serious enough for me to cancel the reservation! I was gobsmacked. I cancelled the reservation but developed anxiety and insomnia, as I was certain they were going to take me off the platform for my defiance! It would have ruined my business.

  5. It is disappointing with how many Australian companies use the sites to book their corporate employees for their stays. Often we are told that even though the corporate customers know by booking direct with the motel they will achieve a lowere rate than advertised,their hands are tied with company policy and procedures which dictates that they must book with a certain booking site. There needs to be a campaign on businesses to do the right thing and support the Australian accommodation industry by booking direct.

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