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Online travel platforms need more regulation

10/13/2017| 10:20:08 AM|

Despite the success, some OTA platforms lack transparency in terms of information disclosure and find it hard to manage some contracted travel agencies with malpractices.

A post, which was widely circulated on WeChat during this year's National Day holiday, claimed that fees related to extra service packages added to online ticket bookings earn Ctrip about 10 billion yuan (USD 1.5 billion) per year. Such fees are automatically added to air and rail bookings during the firm's checkout process.

OTA platforms, such as Ctrip.com and Tuniu.com, have pioneered China's online tourist service sector. By providing services like transportation tickets, hotel reservations, and package tours, the two NASDAQ-listed OTA enterprises have made great strides in China's online travel market. Ctrip witnessed net revenue of 6.1 billion yuan in the first quarter of 2017, an increase of 46 percent year-on-year. Tuniu saw its transaction volume double in the second quarter of this year, with net profit soaring by about 56 percent year-on-year.

Despite the success, some obstacles remain for China's OTA companies. In addition to the booking trap mentioned prior, some OTA platforms are involved in other malpractices, such as failure to display prices clearly or have prices properly tagged. Besides those, users are forced to restart the booking process in some cases, which is not user-friendly. Some OTA platforms lack transparency in terms of information disclosure and find it hard to manage some contracted travel agencies where unregulated contract signing, forced shopping, and higher commissions exist, which may pose a threat to travelers' personal safety and spoil the travel experience.

Against this backdrop, tourism authorities should issue or amend related laws and regulations to manage and supervise OTA platforms, as well as beef up efforts to establish an industrial standard for online vendors, including ways of displaying the cost of each item at each step of purchase, highlighting recommended products and refunding ticket fees and hotels. OTA providers should be responsible for evaluating and regulating the contracted agents and ensure all violations of consumer rights are addressed. OTA regulatory bodies and operators should guarantee users' rights to be informed and to enjoy the freedom to compare and select what they want.

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TAGS: OTA | Ctrip | Tuniu
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