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Can travel tour booking OTAs and tour operators work together for sustainable tourism?

Dec 8, 2017

Youth travellers value experiences and that’s not going unnoticed by online travel agents (OTAs). Tour booking OTAs such as GetYourGuide and Viator have experienced a growth surge in recent years which has led to rapid consolidation and acquisition within the market. Viator made headlines when it was snapped up by TripAdvisor for $200 million, the highest price the online review company had paid for any previous acquisition.

people sightseeing in group in a city

In this booming market for tour booking OTAs, tour operators are feeling the pinch from steadily increasing costs of doing business. For many tour operators, OTA commission fees have risen by 5 to 10 percent in just a few years, exceeding 30% the price of the ticket. At the current rate of increase, tour companies face the choice of passing costs onto the consumer or cutting costs by decreasing the quality of the tour.

Other travel sectors, such as accommodation, have long worked to obtain balanced business practices with behemoth OTAs. Leading hostels and youth accommodation businesses have signed the 2017 Sydney Declaration to call for fair online distribution practices by OTAs. A report released earlier this year by the American Hotel & Lodging Association found that the consolidated market has enabled accommodation OTAs to hike their commission fees and create search bias against providers who won’t, or can’t, pay the fees. The result is that businesses without the means to launch expensive direct-booking marketing campaigns are being penalised – either with higher costs or demotion in search results.

These penalties would be especially devastating for the travel tour industry in developing tourism destinations, where tours are a key

group hiking in mountains

source of tourism dollars for locals. Pricing local entrepreneurs out of their own tourism market would be a missed opportunity for sustainable tourism. Inclusive and sustainable economic growth is one of the five key goals the United Nation’s 2017 Year of Sustainable Tourism for Development.

WYSE Travel Confederation membership comprises a community from more than 450 organisations representing all areas of youth and student travel, including both tour operators and online tour booking platforms.  Our organisation would like to see a collaborative effort to secure fair and sustainable business practices which can ensure both local communities and young travellers are the main beneficiaries of travel tour bookings.