Trade groups sound alarm on e-booking

Major tourism associations have called on the government to protect local booking companies as big hotels and online travel agents (OTA) spend huge sums in Thailand, out of fear that the trend will critically damage local operators and forced them out of business.

Vichit Prakobkosol, president of the Association of Thai Travel Agents (Atta), a group that has many booking firm members, urged the government to lay out measures to protect local businesses, especially small and medium-sized operators

Mr Vichit said most of the big hotel chain operators, both local and foreign brands, are injecting a great deal of money into online marketing, using the internet and social media to sell products and social media to sell products and services

Under this model, it’s not necessary for local hotels to give an allotment to travel agents as they did before.

“Instead, hotels can do marketing and sell rooms on their own because they can get more margin,” Mr Vichit said.

OTA companies in the Thai market, namely Traveloka, Agoda, Expedia, Booking.com, Hotels.com and Skyscanner, have grown in popularity among Thai travellers. Mr Vichit said that OTAs generally offer customers booking for both air tickets and hotel rooms, dangling promotions and attractive prices to cultivate a loyal following.

“With lower expense when doing business online, many OTA can get more customers and profit,” he said. “As a result, local small and medium-sized operators are facing difficulty due to a lack of financial support.”

To protect local booking agencies, Atta has urged the government to ask hotels and OTAs to limit the selling of products and services through their own online channels.

“We asked the government to negotiate with operators to give an allotment to OTAs,” Mr Vichit said. “If not, many operators may shut their businesses.”

The increasing impact from foreign OTAs prompted the Tourism and Sports Ministry to announce on Tuesday 15 May that Pongpanu Svetarundra, permanent secretary of the ministry, planned to talk with major foreign OTAs about the issue.

The ministry noted that big OTAs have entered Thailand to take advantage of booming tourism, and Thailand may suffer a drain in revenue to these firms.

The ministry said many hotels are forced to offer low prices to OTA companies, enabling OTAs to deliver rooms at low prices on their websites.

The upshot is that hotels are unable to raise their room rates, Mr Pongpanu said.

Supawan Tanomkieatipum, president of the Thai Hotels Association, said that while Thai tourism is on the rise, hotels in big destinations such as Bangkok, Phuket, Pattaya and Chiang Mai are already oversupplied, resulting in price competition.

She said all hoteliers have a right to run their business how they want to, but to remain viable they must shore up their products and services, improve their online channels and get a better understanding of tourist behaviour.


Reference: Bangkok Post