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.
Victoria 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 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