PETALING JAYA: Budget hotel operators in Malaysia want federal government to regulate online travel agencies (OTAs), arguing that the free online situation will lead to an unsustainable travel industry, especially during the pandemic of Covid-19.
The Malaysian Budget and Business Hotel Association (MyBHA) also said there was a need to enforce guidelines for the short-term residential accommodation industry.
MyBHA Vice President Sri Ganesh Michiel said the commission that OTAs charged to hotel operators meant that the latter were not making enough profit for their business continuity.
“The operational cost is very high but the selling price of the rooms is very low,” he said at a virtual press conference yesterday, where he claimed that the price war between OTAs was lowering prices. room prices.
An OTA is an online marketplace that allows consumers to book travel products and services, including hotels and flights.
Ganesh claimed that there is no control over the commissions earned by OTAs and that they conduct promotions without prior notice or consent from operators.
He added that the whole industry must be united before they can stop using OTA platforms.
He pointed out that 90% of the public used these platforms because they were cheaper, adding that the walk-in rate had decreased.
“If we stop using these agencies, the competitor will get the deal. We rely on them to fill our rooms.
“If we use these agencies, our profits drop by almost 60% to 70%,” he said.
Ganesh also said that customers also preferred non-hotel accommodation or residential units, where there was no need for business permits or business licenses.
He hopes the issue can be addressed in the next 2022 budget.