Ring or walk in to find the cheapest rate
International web based firms now dominate hotel bookings writes
Queenstown hotel owner Nik Kiddle is leading a group of about 100 accommodation providers around the country, who want more freedom to offer better room rates.
He said 70 per cent to 98 per cent of bookings are made through online services like Booking.com and Expedia, which impose contract restrictions on hotels offering sharper deals direct on their own web sites.
The only way guests can obtain the best room rates is to directly contact hotels or motels, he said.
However, some operators are setting up loyalty clubs or finding ways to signal cheaper rates on their own web sites.
Kiddle and fellow hoteliers and moteliers want the Commerce Commission to review a recent ruling on the issue.
He said: ‘‘Properties like mine are having to put loyalty clubs in place to be able to offer lower prices, but they’re not as accessible for people and they’re not discoverable by Google and other search engines.’’
Kiddle said club membership was not only a hurdle for customers but a hassle and extra cost for him.
It was encouraging that Australian accommodation providers were challenging their regulators because the Commerce Commission often seemed to follow its counterpart over the Tasman, he said.
French and German regulators required Booking.com to remove the restrictive clauses last year, the Austrian and Italian parliaments were in the process of removing them, while other EU states were reviewing them.
Kiddle said various estimates put the value of annual commissions paid to overseas online booking services at about $150 million.
Total commission and associated costs to local hoteliers could be between 15 per cent to 30 per cent when transaction fees and GST are added, according to some estimates.
Kiddle said New Zealand was also missing out on tax from the international online booking agents.
Wellington’s Bucket Tree Lodge operator Murray Reeve said the Tourism Industry Association and Hospitality NZ should be more vocal.
A judicial review of the recent Commerce Commission was a possibility but would be expensive, he said.
The Commerce Commission had no plans to reopen its investigation, a spokesperson said.
And the Tourism Industry’s Association said it is satisfied with the Commerce Commission’s position.
AA has also been involved in publicising the issue. AA operates online booking but spokesman Liam Baldwin said it was based mainly on an advertising fee for hoteliers.
‘‘We know how beneficial online services like Booking.com and Expedia are but its not a fair deal,’’ Baldwin said.
Meanwhile, the Choice Hotels chain has launched a loyalty scheme for customers offering 5 per cent discounts of the best available rate.
Choice Hotels Asia-Pac chief executive Trent Fraser, said online booking agencies drove large amounts of businesss but there were costs, and accommodation businesses were trying to find the right mix.
‘‘Our five per cent loyalty discount is probably enough to change people’s behaviour. Any lower and it might not attract customers,’’ Fraser said.
A background discussion paper by the Rotorua Association of Motels said when commissions were previously about 10 per cent it was sustainable, but if levels approached 30 per cent they made it difficult to operate profitably.
Online travel agencies may also use tactics like rebating part of a commission to customers or discounting rooms, encouraging them to keep using the sites.