WEDNESDAY, 14 DECEMBER 2022
SUBJECTS: Investigation into accommodation booking platforms, monopoly power.
KATHERINE FEENEY (HOST): It seems as though you can compare prices - get a sweet deal. Well, a government investigation is looking at whether these sites are actually doing the opposite. Andrew Leigh can tell you more. He's the Assistant Competition Minister. Minister, thank you for your company. What are your concerns about these websites, first off?
DR ANDREW LEIGH, ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY: Great to be with you, and thanks very much for taking an interest in the issue. My concern is that we're talking about hotel booking platforms that don't clean the toilets, don't change the sheets, don't help on the front desk; they're simply organising the processing of the payment. And some of the stories I've heard have their fees running into the double digits. So we need to find out what are the fees that are being charged, and more importantly, whether or not these sites are using their monopoly power to prevent hotels from encouraging people to book directly with them.
FEENEY: Interesting. Can you take us back a while? Because these sites didn't just appear overnight, they've been around for a while, so why investigate now?
LEIGH: Well, we've had a long-time concern that these were exerting a bit of power on hotels, in which they say, "If you ask your guests to book direct, then we're not going to list you on the service." Or maybe they say, "Look, we'll list you on the service," but then a hotel finds that they're down‑rated in the search rankings. Frankly with a site like Booking.com or Wotif or Expedia - if you're down the bottom of such rankings you might as well be invisible.
So that kind of algorithmic punishment would be a monopoly platform throwing its weight around, and I don't think that's reasonable at a time when accommodation providers have had a terrible couple of years. Many of them have scrimped and saved in order to make their way through COVID, and now that people are back travelling, the government wants to make sure that they're not being mucked around by these big monopoly booking platforms.
FEENEY: Okay. So what information are you asking Treasury to gather specifically?
LEIGH: This Treasury inquiry is asking accommodation providers, the platforms, and anyone else who's working in the space a couple of basic questions: first of all, what are the fees being charged? Because it's all pretty opaque right now. Secondly, how are hotels treated if they do encourage their guests to book direct? And thirdly, is there any of this sort of algorithmic punishment going on where sites still get listed but really turn out to be invisible? We want a thriving accommodation sector, Kat, we want to make sure that the accommodation sector is as strong as it was before the COVID era, and we can only do that if we've got fair competition operating in that sector.
FEENEY: Okay. Now, you've mentioned you've been sort of in conversation already with hotel owners, with operators, so what have you heard; what have they told you? Can you give us an example of the kind of scenario that they might be facing?
LEIGH: Well, they're pretty frustrated, because they say, look, it would be reasonable if the sort of fees were, well, what your credit card company charges, a couple of per cent. But if the booking platforms are charging double-digit fees and then not providing any other services, they're not the people that pick up the phone if you've got a problem, they're not the people who are going to be greeting you on the desk. Then these hotels say, it's just not fair. They're paying too much, they believe, for getting too little, and any time you've got a monopoly in place, that's what they'll be tempted to do. You know, monopolists tend to drive up prices and gouge consumers.
We as a government that is passionately pro-consumer want to make sure that there's strong healthy competition going on in this sector. Both Don Farrell, who's the Tourism Minister, and I as the Assistant Minister responsible for competition, are very keen to see a thriving, competitive accommodation sector, and are aware that these offshore platforms may be performing the sort of role that we're worried about with other big electronic monopoly platforms.
FEENEY: It's about a quarter past 1 here on ABC Radio Brisbane, and Gold Coast. My name is Kat. Andrew Leigh is with you, Assistant Competition Minister with the Federal Government. Taking a look at those hotel booking sites, those comparison websites that you might be familiar with; maybe you've used them, maybe you're sitting down trying to make some last‑minute travel arrangements and you're in front of one right now. So, I suppose that is the question at the moment. Andrew what does this mean for our listeners, for listeners this afternoon who are eager to book accommodation; what would you suggest they do
LEIGH: I'd suggest that you see whether or not you can get a better deal by booking directly with a hotel. When you do that, you know that all of your money is going to the hotel and you're not having a slice going off to a US or Dutch company. I also suggest that listeners have a conversation with hotels about how they find these booking platforms. Often, it's worth just getting that perspective, and that's what we're trying to do through this consultation.
But we're very keen in the whole digital platform space to make sure that Australia isn't taken advantage of. Now, you go to search, and you've got Google with 95 per cent of the market. You look at social media and Facebook has a massive market share, Apple with its App Store, Amazon with its Marketplace, all of these are contexts in which we've got big digital platforms acting as gatekeepers to parts of our economy. We need to make sure they're doing the right thing.
FEENEY: Andrew Leigh, appreciate your time. Thank you very much.
LEIGH: Real pleasure, thanks for having me on, Kat.
FEENEY: Andrew Leigh is the Assistant Competition Minister, and you're on ABC Radio Brisbane.