KUALA LUMPUR – Will online travel agencies (OTAs) soon see their commissions charged on local hoteliers capped?
According to Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri (Batang Sadong-GPS), the government is currently reviewing the need to regulate the industry.
However, she said any decision will have to take into account the views of both parties – travel booking platforms and accommodation premises.
Speaking in Parliament, Nancy acknowledged that the country currently lacks any OTA regulatory mechanisms, which she said may be necessary to ensure better service quality for consumers.
“Having said that, we need to be objective in this matter, as there are a number of factors that need to be taken into account in formulating a policy,” she said.
“This includes market forces, the issue of supporting digitalisation, and creating a conducive business environment that can encourage the companies (OTAs) to continue operating in Malaysia.”
She was responding to a question from Abdul Latiff Abdul Rahman (Kuala Krai-PAS) if the ministry intends to set a ceiling rate for the commissions collected by OTAs from hoteliers, which is currently between 12% and 18%.
Latiff said the high commission rate has proven to be a burden for hoteliers and guesthouses, especially during the Covid-19 pandemic.
Previously on September 18, the Malaysian Budget and Business Hotel Association had similarly urged the government to regulate OTAs, saying booking agencies were eating into their profits.
Among their grievances were that OTAs were allegedly charging exorbitant sales commissions and activating promotions without hoteliers’ consent.
Nancy said the issue has to be looked at from a broader angle, saying both parties – OTAs and hoteliers – require each other to survive and thrive in the industry.
The minister said OTAs require the participation of a bigger pool of accommodation premises in order to offer more choices and be more attractive for consumers.
“If they don’t impose good terms, then hotels will choose other platforms, and this will directly affect the OTA in question.
“At the same time, accommodation premises also need OTAs to access a bigger user market, among others. All these will require huge capital and are hard to implement individually,” she said. – The Vibes, October 5, 2021
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