Price parity practice to end in the hospitality industry?

By Sky Accountants

Labor has proposed to prohibit price parity clauses from online booking contracts, which restrict accommodation providers in offering discounts on their websites.

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Labor has promised that if it gets elected, the practice of rate parity will end in Australia. This will allow accommodation outlets to compete and set their own prices independent of contractual clauses imposed by online booking platforms, which often charge about 30% of the fee paid by guests as commissions.

Accommodation outlets in Australia are not allowed to offer discounts other than the one listed on an online platform, even if they need to fill empty rooms. Anti-competitive practices would level the playing field between Australian small businesses and their multinational competitors and give their customers more options.

Labor would want to investigate the use of similar clauses across other industries and platforms, such as restaurants who are experiencing the same challenges with costs associated being on the UberEats platform. This unfair practice needs to change to further strengthen and protect the country’s small businesses.

As you look for different ways to grow and improve your business, seeking professional advice from a business consultant could prove to be an important and helpful decision.

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