The Australian Competition and Consumer Commission (ACCC) have waded into the sale of Wotif to Expedia.
They have indicated that the $685 million deal has the potential to decrease competition and increase commission. Expedia operates on a considerably higher commission structure than Wotif.
“Market enquiries have indicated that Wotif is a major source of bookings for Australian Accommodation providers and charges a lower commission rate than Expedia” according to ACCC Chairman Rod Sims.
“Although the recent expansion of Booking.com and some smaller OTAs such as Hooroo might suggest that barriers to entry and expansion are not significant, market participants have identified barriers in the form of the high costs of advertising necessary to capture a critical mass of consumer ‘eyeballs’ and bookings, and sunk costs associated with the development of an online platform.”
In our view, major players like Priceline Group and Expedia monopolising the online booking travel industry at the expense of important Australian competition such as Wotif runs the risk of driving commissions up further.
For HiSITE clients, regardless of changes in the market, the ease of uploading and updating your availability across all channels allows you to ensure your property is visible across as many options as you require.
These changes to the market, and the possibility of future commission increases, drives home even clearer the importance of visibility on Google. Effective content creation, a strong and relevant Google + page and the opportunity for direct online bookings through Google Hotel Finder, are effective alternatives to the ever increasing commissions of the OTA’s.
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