Dick Smith’s rant on social media earlier this month has sparked the change he was hoping for because the ACCC has reopened its investigation into online travel agencies (OTA).
The Australian Competition and Consumer Commission (ACCC) has confirmed that it is reinvestigating the OTA contracts moteliers and hoteliers are locked into as they “might be illegal”, ABC.net.au reported.
Keyword – might!
The investigation comes shortly after Dick Smith described OTAs as “leeches” for pushing small business owners into agreements that he says, prevent them from advertising their own rooms cheaper online than the price available on sites such as Trivago, Booking.com and Wotif.
In his viral video, Smith said that in addition to preventing moteliers and hoteliers from undercutting, the contract requires Australian business owners to fork over up to 30 percent in commission to these overseas giants.
“It just gets me so angry as an Australian, millions and millions of dollars that should stay in our country towns is being shipping off, and it’s like extortion because it’s not in a voluntary way.”
Dick Smith
Hoping to get to the bottom of the situation, ACCC’s Chairman Rod Sims said the commission is again investigating the conditions of these contracts as there may have been recent changes to competition law that could allow for updates to pricing conditions.
“We’re looking at that extremely closely because we think there’s a chance that the arrangements they’re continuing to use might be illegal in further ways.”
Rod Sims, ACCC Chairman
This is the second time the ACCC is looking into the OTA contracts. The first time the watchdog managed to update conditions so that hotels and motels could price cut if a customer called them directly or approached them in person.
“We looked at these contracts, and we were threatening to take these online travel agents to court unless they made a change,” he explained.
“The change we forced them to make was that hotels and motels could offer different prices to people who phoned them directly or walked through the door.”
Meanwhile, the Minister for Trade, Tourism and Investment, Simon Birmingham, has also joined the OTA conversation, saying these popular OTAs should “be careful not to abuse” their “extensive market power”.
- READ: Hoteliers “can’t afford not to deal with” OTAs
- READ: Dick Smith slams online travel booking sites