UK voices concern about OTA contract

Hostels and budget accommodation are making up an increasing portion of the hospitality industry, and this growth brings more focussed attention from the big hitting OTA’s.

betaPerhaps as a result of this the proposed merger of Hostelworld and Hostelbookers was announced earlier this year.  At the time the merger was announced (April 2013) WRI CEO Feargal Mooney said

“The capacity to inject more resources into online marketing and technology is absolutely key to this sector, and our increase in scale will enable us to ramp that activity up in the face of some very large and dominant competitors.”

“We want to provide a service that both competes head to-head with the large online  travel agents, and retains the personal service and sector knowledge that comes from being a smaller, budget-focused player – meeting the needs of hostels, B&Bs and smaller hotels, and providing enhanced service to our customers and partners.”

Since then the industry have been watching and waiting with great interest.

Sampling the views of BETA members, the majority were supportive of the proposed merger and the need for a new and powerful entrant into the market that can keep pace with the big hitters – subject to new contract and T&C’s, which is where things have become tricky…

Deep concerns from members have been raised around rate parity, marketing activities and having little control over distribution or yield management and the feeling that hostels are being made to feel like a sub division of Hostelworld rather than a client.

The changes are of real concern not just to small and medium size operators, but large operators are also dismissing them and the timescales imposed as unrealistic. Group meetings are being proposed to discuss the new T&C’s.

Elsewhere in the world, hostel members of BOA in Australia met recently to discuss the contract and unanimously agreed their rejection of it, and many other country based groups are coming together and seeking legal advice.

Source: BETA

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