Online travel platforms need more regulation
Recently, Ctrip.com, China’s largest online travel agency (OTA), has been thrust into the spotlight for allegedly defrauding consumers with so-called default fees.
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 ($1.5 billion) per year. Such fees are automatically added to air and rail bookings during the firm’s checkout process.
This reminds me of an awful ticket-booking experience on its app my sister and I had during the Spring Festival holidays this year. We bought two tickets for a Beijingbound bullet train from Wuyuan, East China’s Jiangxi Province, in a hurry, as few tickets on the app were available. However, we found we had been charged transportation insurance fees costing dozens of yuan.
Some friends also complained of being misled into paying for services they found unnecessary like hotel coupons, car rentals or VIP lounges at airports, because it is hard to find the button to cancel an item in a package tour.
However, the OTA giant dismissed the claims as groundless.
The thriving OTA service is a result of the explosive growth of China’s tourism sector. Steady economic development, rising per capita income and buying power have fueled sustained increase in tourism consumption abilities and travel demand, adding fresh vitality to China’s sound economic growth momentum.
This has contributed to the country’s booming tourism industry that gave rise to the popularity of online travel agency services. 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 freedom to compare and select what they want.
Although China’s tourist market is developing fast, complaints and poor service in the OTA sector abound. This merits close attention and should be handled in a holistic fashion, in a bid to bolster the benign development of China’s tourism industry.