KUALA LUMPUR – Although it sympathises with the plight of budget hoteliers, the Malaysian Inbound Tourism Association believes that regulating online travel agencies (OTAs) will backfire on Malaysia and make the country seem “less attractive”.
Its president Uzaidi Udanis said he does not know of any country imposing such regulations on online travel booking platforms.
Being a trading nation, he said, it is unwise for Malaysia to impose restrictions on the market as this will limit competition and disrupt the industry as a whole.
“First of all, does the government have the power to regulate OTAs, which are mostly foreign companies? I don’t think so,” he told The Vibes.
“While it is ideal to get the government to regulate these agencies, I believe the move will backfire. Other countries are adopting an open market, so you can’t expect us to cap the industry.
Plus, with the way things stand, Malaysia needs tourists, and only these companies can help promote us. If they feel as though the government is making it hard for them, perhaps they won’t help promote us any more.”
With OTAs operating in a huge number of other countries as well, he said, it is unlikely that they will feel the pinch should they decide to withdraw their services from Malaysia.
Last week, the Malaysia Budget and Business Hotel Association urged the government to regulate OTAs, saying these booking agencies are eating into their profits.
Among their grievances is that OTAs are claiming exorbitant sales commissions and activating promotions without hoteliers’ consent.
Instead of regulating the agencies, Uzaidi suggested that the government start by plugging existing loopholes, including amending outdated provisions of the Tourism Industry Act 1992.
“When the act was formulated, hotels were mostly operating offline; there were no online bookings. Now, we have various taxes for that. Maybe, we can look to incentivise some.”
Uzaidi, who is also a Tourism Malaysia board member, said hoteliers should reduce their reliance on OTAs if they are truly affected by some of the conditions imposed by the agencies.
He proposed that budget hotel operators tap into the services of local travel agents to promote their accommodation.
“We have about 6,000 travel agents nationwide. Even if each agent brings just 10 customers each year, imagine how much revenue this will generate for the hotels.
That is why budget hotels need to relook their business model. I feel that they are depending too much on OTAs, and this spells trouble. They must have a realistic strategy.
“If they can leverage these travel agents, it will be very good. But of course, the agents will still need to be commissioned.” – The Vibes, September 26, 2021
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