But are agents innocent or complicit in ruining the industry?
I love Dick Smith. He does not have the answer to anyone and has reached a point in his career that the truth matters more than the political fallout it can cause. He makes people uncomfortable. I kind of like that.
He is right, some OTA’s do rip off a lot of hotels. I’ve seen firsthand whilst my mum was running her hotel in Cambodia. But are agents entirely free of blame?
OTA’s create an environment promising massive sales and distribution. Hoteliers follow all of the tips and tricks when loading their property, click go live but it doesn’t appear on the front page of results. Or the second. Or the fifth. It may as well not exist.
Properties are largely organised or listed on the OTA websites based on the percent commission sets in the distribution channels from the hotel. It’s not price, it’s not how well they match the search criteria, but the money they will make. It’s not about the customer or the hotel. Stop being naïve.
I performed experiments to see what it would take to get my mums property listed on the front page. The commission rate had to be set at 40% to 70% depending on the platform. But to get a booking, the price has to be right. Combine that low price with a 40% margin and the individual booking runs at a loss. Hotels eventually realise, stop paying the premium, someone else steps up and get sucked in because “they know better.“
Hotels are brainwashed thinking “rate parity” is fair. It’s code for big bad and scary OTA saying “if you want to use us, the cheapest place to book your hotel can only ever be through us.”
But back to Dick and this relating to travel agents.
Dick being Dick, you can get away with saying things like “(OTAs) such as EXXXXXX and BXXXXXX.com” are “exploiting and extorting” Australian hotel and motel owners and has called on consumers to boycott the services.”
He is supported by brave but much smaller players ““They’re ripping us off,” Golden Hill Motel owner Mark Henderson says”
A consumer is anyone who is using the sites, irrespective of their commission level. Dick’s suggestion is that anyone who is using these companies are undermining the industry and the hoteliers, often small business owners without the backing of massive brands.
In this context travel agents who support these brands with these practices are not only complicit , but are also undermining their own future job prospects . But hey, the price is a little bit cheaper today….