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AAoA slams Trivago in wake of ACCC pricing allegations

AAoA CEO Richard Munro has called for a ban on price parity clauses between hotels and retailers.

Praise has been heaped on the Australian Competition and Consumer Commission (ACCC) by the Accommodation Association of Australia (AAoA) for decisive action against Trivago, for which it has labelled the allegations, if found to be true, as “a disgrace”.

In a statement, AAoA Chief Executive Officer Richard Munro said Trivago should face “significant sanctions” if the ACCC allegations are proven true.

“The ACCC deserves credit for seeking to hold Trivago to account – and this should be one of many ways our competition regulator is scrutinising the practices of Trivago and offshore-based online travel agencies which overwhelmingly dominate the Australian accommodation booking market.”

“Hikes in commissions, a lack of professionalism in dealings with operators of accommodation businesses, compelling accommodation operators to agree to room-rate price parity clauses, paying virtually no tax in Australia and employing very few Australians are among the many ways the likes of Trivago and offshore-based online travel agencies are wrecking balls for Australia’s accommodation industry,” Munro added.

Action by the ACCC against the Expedia-owned hotel price aggregator now on its way to the Federal Court alleges that hotel prices displayed to customers were prioritised for advertisers paying Trivago a higher pay-per-click rate and were not necessarily the best price available for a particular room.

Across more than 400,000 screenings of its television broadcast and in online advertising, the ACCC alleges that Trivago claimed to offer travellers the best possible price for a hotel room. In a comprehensive study of click data, it found the majority of users clicked on the highlighted price in green text, indicating it was the best price available when cheaper available options were relegated to less prominent parts of the search results.

Trivago responded to the allegations, saying it was disappointed in the action and that it would vigorously defend its interests.

Munro also urged the ACCC to investigate the relationship between Trivago and its parent firm Expedia and that consumers and accommodation operators were not being ripped off.

“The Accommodation Association re-states its position that room-rate price parity clauses should be banned in Australia immediately.

“As things stand, for consumers to maximise their chances of paying the lowest possible room-rates in Australian accommodation businesses, they should contact the accommodation business direct or try an accredited Australian Travel Agency.

“Any unethical and unlawful practices which disadvantage consumers and accommodation businesses must not be tolerated under any circumstances,” Munro concluded.

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