Following a meeting of a group of leading youth travel accommodation providers and associations at WYSTC 2013, a position statement was agreed upon regarding online distribution practices.
Resetting the Relationship: establishing fair practices in online distribution
Online Travel Agents (OTAs) and youth travel accommodation operators are mutually dependent. OTAs have benefited by broadening the variety of product they offer, while youth travel accommodation providers have gained distribution to customers in markets where they are less well known. Youth travellers have gained most – by from being able to access a broad range of accommodation options, coupled with customer reviews and location content.
Nevertheless the accommodation operators are the ultimate providers of the product; they alone should determine where it is sold and at what price. There is thus a need for a sensible reset to be found in a relationship which, over time, has become less and less commercially balanced. A number of fair practices need to be established to ensure product sovereignty rests with the operators. Equally OTAs that provide genuine value to operators can be assured of continued support in terms of competitive product and good availability.
Agreements between OTAs and youth travel accommodation operators should not contain clauses that:
- Allow the use of property or brand names in online advertising, unless specifically authorised;
- Require rate parity;
- Enforce mandatory availability parity (either via last room availability or minimum allocations);
- Allow for agreements to be terminated at short notice (without a compelling cause), with no consultation and without being signed by both parties;
- Are not written in plain English (and are not translated into the main official language of the operator);
- Conflict with national or international trade, competition or consumer laws;
- Require operators to indemnify OTAs for tax obligations on commissions;
- Allow the OTAs to be opaque in how they display default search results (including the use of spurious ” recommended” terms that are designed to mislead consumers, when the basis of recommendation is the % commission paid or the availability given to the OTA);
- Result in commissions being paid on no shows or any other unrealised turnover.
- Discriminate against an operator based on size or location.
The above code of practice represents a constructive and balanced approach to resetting the relationship between OTAs and youth accommodation operators. It’s adoption will result in a better deal for consumers and will promote genuine competition.
Please join us at WYSTC 2015 as we review the Declaration in light of the recent changes in the OTA market.
Venue: Meeting Suite 1.63, Cape Town International Convention Centre
Date: 24 September
Time: 13:15 pm