OTA commissions won't rise? ACCC looks foolish after latest rate increases
News is filtering out that Booking.com has advised some hoteliers that it's increasing commissions in certain major Australian markets from 12% to 15%.
The ACCC – Australia's so-called competition watchdog – is looking naive and ignorant after Hooroo this week became the latest online travel agent to raise its commissions following Expedia's acquisition of Wotif while industry giant Booking.com is telling some operators its rate in major markets will increase from 12% to 15%.
When the ACCC approved the Expedia-Wotif deal it "noted the concerns raised by market participants that Wotif's … removal from the Australian market may result in them paying higher commission rates to online travel agents.
“However, the ACCC found that there has been considerable change in the competitive dynamics of the online accommodation distribution market in recent years," said Chairman Rod Sims said.
"This has included new entry by a number of competitors and business models, including Booking.com, which has grown quickly to become the largest OTA in Australia.”
The hotel industry strongly disagreed – and have been proved right.
Expedia raised Wotif's commission from 12% to 15% in February, a move that was quickly followed by Agoda hiking its rates.
Now Hooroo, the Qantas Group's accommodation website, has advised hoteliers that its base commission will rise from 10% to 13.2% from July 1.
It's doing this "to ensure we can continue to invest in the growth of the Hooroo business in the highly competitive OTA market in which we compete."
News is also filtering out that Booking.com has advised some hoteliers that it's increasing commissions in certain major Australian markets – Sydney, Melbourne and the Gold Coast, for example – from 12% to 15%.
And why wouldn't it?
Booking.com is Australia's largest online travel agent – it delivers more business to hoteliers than any other company – and there's no sane reason to stay on 12% when its two major competitors, Expedia and Wotif, are charging 15%.
You'd do the same, surely.
Yet somehow the ACCC thought commissions wouldn't rise because there's "more competition" when clearly the opposite is true.
Naive, ignorant and plain dumb.
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