Victoria Tourism Industry Council speaks out about online backpacker accommodation booking changes

Victoria’s backpacker industry is deeply concerned about contractual changes being implemented by the major hostel booking service www.hostelworld.com which will severely limit operators’ autonomy and control over their businesses.

VTIC%20LOGO%20LargeVictoria Tourism Industry Council (VTIC) Chief Executive Dianne Smith says, “While Hostelworld has worked in partnership with the industry over many years, it did not consult with operators on these recent proposed changes.”

The most concerning implications to the tourism industry include:

  • A requirement for operators to commit to complete price and availability parity on stock listed on their own websites and hostelworld.com. This would limit operators’ ability to manage yield and reserve stock for anticipated spikes in demand.
  • A requirement for operators to refrain from marketing to and communicating directly with guests who booked through http://www.hostelworld.com.
  • A requirement for operators to provide a refund to guests who have paid more than the advertised room rate (at any given time) due to natural fluctuations. This means that a guest who pays $47 per night one week, but then sees the same product advertised for $40 per night the next week can claim the difference back, regardless of whether their stay has concluded or not.
  • Entitlement to use the property name in online marketing (including email marketing and pay-per-click advertising). The licensee must grant Hostelworld license to use the property name for this purpose. Concerns over predatory use against established brand names are a major concern for operators.

Key backpacker accommodation players representing the full spectrum of the industry met yesterday with the state’s leading tourism and events body, VTIC, to discuss the changes.

David Fitzpatrick from leading backpacker accommodation provider Base says, “These changes will affect the way business is done in our sector, and in a very negative way. Operators have to be allowed some autonomy in running their business, including the right to decide how much of their stock is listed on booking websites.

“The requirement to refund the difference when rooms are booked at different times and therefore different rates is just unworkable. The cost and administrative burden this places on operators is unreasonable as are changes related to taxation in this document. I encourage all accommodation providers who use Hostelworld to carefully consider their contracts before signing on.”

Early indications are that Hostelworld is unwilling to enter into negotiations with operators at this stage.

Ms Smith continued, “Hostelworld is making the situation untenable for many budget accommodation providers who form a significant and crucial part of the tourism and events sector in Victoria. We would strongly encourage Hostelworld to reconsider its ‘no negotiation’ stance and would be happy to facilitate discussions between the parties.”

Victorian operators present yesterday voted unanimously to hold off signing the new contractual agreement until further clarification on several points can be made. Victoria is not the first state to hold such industry meetings with the NSW Backpacker Operators Association (BOA) and other states and territories also seeking clarification for its members.

More than 2 million domestic visitor nights and just under 2 million international visitor nights were spent in backpacker or budget accommodation in Victoria in the year ending June 2012.

Meeting attendees included:

  • Tony McAuliffe, Port Campbell Hostel
  • Yossi Gallor, Space Hotel
  • Simone Eckersley, Habitat HQ
  • Evan Mahony, Pint on Punt
  • Raph Kozminsky, Base Melbourne
  • Mat Holman, Base Melbourne
  • Anna Heaton, Elephant Backpackers
  • Meg Allen-Armistead, Nomads
  • Peter McMahon, Cambrai Backpackers Hostel and Tours
  • Steve Gaff, Greenhouse
  • Kim Francis, YHA
  • George Tyler, Miami Hotel
  • Res Manager, Urban Central
  • Milton Everett, Hotel Claremont Guest House and Apartments of South Yarra
  • Anthony Watson, Coffee Palace
  • Isabelle Fennessy, Tourism Victoria
  • Jason Whiting, Urban Central
  • Dianne Smith, VTIC
  • Melinda Anderson, VTIC

Media contact: Melina Walton, Senior Communications Adviser 
mwalton@vecci.org.au 03 8662 5310 0423 883 945 

The Victoria Tourism Industry Council (VTIC) is the peak policy council for the Victorian tourism industry, which represents key industry associations, operators and government agencies, providing one united industry voice.

Tourism and events are growth industries for Victoria and contribute $19.1 billion to the state economy each year and employ more than 201,000 people.

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