PETALING JAYA: Budget hotel operators want government to regulate online travel agencies (OTAs), saying industry would not be able to sustain itself in the long term without regulation, especially during the Covid pandemic -19.
The Malaysian Budget and Business Hotel Association (MyBHA) also said there was a need to apply the Short-Term Residential Accommodation (STRA) guidelines.
MyBHA Vice President Sri Ganesh Michiel said the OTA commissions charged to hotel operators meant they were not making enough profit for their business continuity.
He said the price war between OTAs has driven down hotel room prices even further.
âThe operational costs are very high but the selling price of the rooms is low,â he said at a virtual press conference on Saturday (September 18).
An OTA is an online marketplace that allows consumers to book travel products and services, including hotels and flights.
Ganesh asked why the government could control bank interests and even the price of Covid-19 test kits but not the commissions earned by OTAs.
“The use of online services has increased and all efforts to revive the hospitality and tourism industry will not be successful if the government fails to address the threats we face, especially those due to digitalization. “, did he declare.
He said these OTAs also conduct promotions without prior notice or consent from operators and suspend the accounts of any hotels that refuse to cooperate with them.
He said the whole industry must be united before they can stop using these OTA platforms.
He said 90% of the public used these platforms because they were cheaper and the walk-in rate had become less.
âIf we stop using these agencies, our competitors will get the market. We rely on them to fill our rooms. If we use these agencies, our profits drop by almost 60% to 70%, âhe said.
Sri Ganesh also said that clients also prefer to opt for non-hotel condominiums or residential units, where there is no need for business permits or business licenses.
He added that they did not have to pay taxes to the government and hoped the issue could be addressed in the upcoming 2022 budget.