Airbnb-style Accommodation Crackdown in Broom

Crack down on Airbnb and other sharing economy accommodation

By Claire Moodie

Authorities in the West Australian tourist town of Broome are cracking down on Airbnb and other sharing economy accommodation, telling owners to stop operating or face enforcement action.

There are hundreds of Broome listings on so-called home-sharing websites, ranging from entire houses to rooms in locals’ homes.

One operator, who did not wish to be identified, told the ABC he only received the letter on Wednesday, giving him just eight days to comply with the deadline.

“I was a bit shocked,” he said.

“I find it very unreasonable.”

‘We’re just doing home-sharing’

It is understood the clampdown will mainly affect people who rent out whole apartments and houses in Broome’s residential suburbs, which is not allowed under local laws.

People sharing a room or part of their property with visitors will now be forced to seek approval as a bed and breakfast and comply with rules in relation to things like parking and swimming pools.

“We’re not really the same as a bed and breakfast,” the operator said.

“We’re just doing home-sharing on a home-sharing platform.

“Formal B&Bs have got advertising signs out the front, which is not something that we intend to do.”

 

‘Action long overdue’

The move has been welcomed by tourism businesses in the town that have been stepping up pressure on the council to act.

A report by the Broome Tourism Leadership Group found that of almost 200 Airbnb listings in the town, 160 were not compliant with local laws.

Of those, 78 were entire houses or apartments with no resident present.

The group estimated that during the latest tourism season, the industry as a whole lost $4.29 million in revenue due to what it called “non-compliant Airbnb listings”.

The group’s secretary, Michael Leake, said these operators were “free-riding the system”, as well as negatively affecting Broome’s residential areas.

“People who don’t even live in the area are running properties by phone — there’s no responsibility, no accountability if something goes wrong,” he said.

“And the neighbours are stuck with it.

“For example, I had one person who rung up and complained she was living in a residential area and had bought a house there so she would have neighbours.

“But she was surrounded by a desert of unlicensed Airbnb properties where whole houses were being rented out.

“People buy a house in an area and they don’t expect the house next door to be turned into a quasi hotel.”

Ross Forbes-Stephen, who manages Cable Beachside Villas, said the enforcement action had been a long time coming.

“I have no problem with other tourism properties, but all tourism properties should be governed by the same laws, regulations and costs,” he said.

“And, currently, they’re not.

“I think this should have been done several years ago.”

 

New statewide register

 

Holiday rental website Stayz questioned the timing of the council’s move.

“We support the Broome shire council’s efforts to try and bring greater certainty to the short-term rental market,” corporate affairs director Eacham Curry said.

“But in the context of the parliamentary report which was brought down last year, we think it’s probably a bit premature.”

In September, a WA parliamentary committee recommended all short-term rentals be registered and a working group set up to determine how the statewide scheme would be managed.

The State Government is finalising its response to the committee’s report and expects to make an announcement within the month.

 

Shire acting on complaints

In a statement, the council said it was committed to ensuring there was a level playing field for all tourist accommodation providers.

Shire chief executive Sam Mastrolembo said it was recently given a list of addresses and advertising material for a number of alleged holiday homes.

“These landowners are potentially acting in breach of the (local planning) scheme and may also be in breach of other health requirements, particularly for swimming pools, which are in place to protect users of the facility,” he said.

“When the shire is made aware, usually through a complaint, that a residential property is being used as a holiday home, it is required to act.

“The shire has recently issued 12 letters to landowners who have been advertising their properties as a holiday home.

“All landowners were provided with the information sheet and advised of the process should they wish to seek approval for a bed and breakfast, which the shire can approve.”

 

‘I think it’s the future’

For Trish Pepper, who shares her home in Broome with visitors during the tourist season and manages other properties in the town, Airbnb provides a vital income.

Ms Pepper has not received a letter from the shire, but said she would consider paying higher rates if necessary.

“I love it,” she said.

“The guests have the advantage of staying not in the holiday area, they stay in the ‘burbs with the locals.

“Because we have a lot of single people arriving in Broome who don’t have $300 or $400 to spend on accommodation, having the rooms in a person’s house, in a safe place, it’s wonderful for them, they make friends.

“I hope other Airbnb hosts in Broome are not feeling too sick over it. I’m sure there will be a solution found that will be satisfactory to all.”

Airbnb ShutDown or Eviction

Key points:

 
  • The council gives property owners until the end of the month to stop providing share accommodation
  •  
  • Local tourism operators say the enforcement action is long overdue
  •  
  • One website operator says the move is premature, considering the State Government will soon outline its policy
  •  

This week, hosts were bewildered to receive letters from the Shire of Broome giving them until the end of January to pull the pin on their “unauthorised short-stay accommodation”.

 
Share on facebook
Facebook

Trivago Found Guilty

Trivago Found Guilty

ABC News 

Australia’s consumer watchdog says online hotel booking site Trivago is one of several online comparison websites that could face severe penalties after a court ruled the German-based giant had misled consumers about hotel room rates.

The company, based in Germany but incorporated in Netherlands, had regularly promoted that its website helped identify the cheapest rates for a hotel by comparing booking sites such as Expedia, Hotels.com and Booking.com, as well as the hotels’ own websites.

Trivago’s main source of revenue is cost-per-click payments from advertisers who pay Trivago a fee each time a user clicks on an offer.

Mr Sims said, rather than being an “impartial and objective” price comparison service, Trivago prioritised the advertisers willing to pay the highest cost-per-click fee.

He said Trivago’s conduct was “particularly egregious” as consumers may have been tricked into thinking they were getting great discounts, when in fact they were not.

“The rankings were largely based on which advertiser would pay them [Trivago] the most money,” Mr Sims told ABC News.

“Most of the time what was highlighted wasn’t the cheapest hotel deal, and therefore, consumers lost out.”

He said if consumers had known they were not getting the best deal, they could have “done more digging” such as calling the hotel or checking the hotel website to find deals that would save them money.

Penalties are yet to be handed down by the court, but could potentially be millions of dollars.

“We will certainly be seeking the highest penalties we can get to send a message to Trivago, and to send a message to others, not to mislead consumers,” Mr Sims said.

Trivago misled consumers more than 66 per cent of the time

Both the ACCC and Trivago called computer science experts to express opinions on the algorithm used by Trivago to select the ‘Top Position Offer’.

Trivago’s own data showed that in more than 66 per cent of listings, higher priced hotel offers were selected as the ‘Top Position Offer’ over alternative lower priced offers.

Justice Mark Moshinsky found that Trivago had “engaged in conduct that was misleading and deceptive or likely to mislead or deceive”, and therefore had broken the law.

The court also looked at Trivago’s use of strike-through prices.

It found hotel room rate comparisons that used strike-through prices, or text in different colours (for example green versus red), gave consumers a false impressions of savings.

“They weren’t comparing like with like, they were often comparing a luxury room price to a standard room price,” Mr Sims said.

“People [mistakenly] thought they were getting discounts when in fact they weren’t. It’s absolutely outrageous.”

The ACCC launched action against Trivago in August 2018.

Trivago’s television advertisements aired more than 400,000 times from December 2013, but in mid-2018 the company stopped using these ads featuring representations about price.

The court case centred around Trivago’s television advertisements that ran from December 2016 to July 2018, and on Trivago’s website from December 2016 to September 2019.

Other online comparison sites to come under fire

Mr Sims said his message to other online comparison websites was: “Do not mislead consumers.”

“If they’re making their money out of promoting the company that pays them the most money, consumers have got to know that,” Mr Sims said.

That may mean companies like Trivago will not get as many people clicking on their site.

“Well, so be it,” Mr Sims said.

“We’re really fed up with these comparison sites misleading consumers and consumers thinking they’re getting a better deal than they in fact are.”

Mr Sims said the ACCC had previously taken action against energy comparison websites and, following hotel booking sites, its focus would now extend to other industries.

“This is a widespread issue as people come to rely on sites to make their purchase choices,” Mr Sims said.

“We will focus our activity on websites that have a lot of use, that consumers rely on.  And we will take action when we think they are misleading.”

Mr Sims the ACCC would also be closely monitoring whether Trivago changes its behaviour to start informing consumers if their rankings are based on advertising money, and to highlight that the price they are seeing is not necessarily the best price.

“That may prompt consumers to ring up the hotel they’re thinking of going to,” he said.

“I know its old-fashioned technology, but you may find … it’s probably usually worth that phone call. Or visiting the hotel website itself if you don’t like making phone calls.”

A spokeswoman for Trivago said the company would closely review the ACCC’s decision.

“The judgment received yesterday from the court provides new guidance on how results of comparator websites, like Trivago and others, should be displayed in Australia,” she said.

“We are working to quickly understand the implications of this decision on our website design and its overall impact on the Australian travel industry.”

Source:  ABC NEWS – First posted  
 
Share on facebook
Facebook

Booking.com Gauging Prices

Booking.con Gauging Prices

Booking.com held a workshop in Geelong, South West of Melbourne, where Account Managers Mandy Huynh (Western Victoria), Dean O’Leary (Eastern Victoria) and their Senior Account Manager Todd Lacey (Victoria and SA) took the attendees through what’s been happening and what’s coming up for Booking.com.

Some of the items which were discussed:

International Cricket Council:

The ICC has signed a 5 year sponsorship deal with Booking.com

Visit Victoria:

The Victorian Government’s ‘Visit Victoria’ webpage search engine is now powered by Booking.com.

Ad-ons:

In the same way that Expedia does, Booking.com now offers ‘ad-ons’, where guests can book tours, restaurants, etc. all on their page.

Daily Worldwide Bookings:

On average Booking.com handles 1.6M booking in any given 24 hour period

 Mobile First Selling:

53% of their customers now use the App compared to 47% using their website

80% of travellers use a smartphone app to research a trip

59% of Booking.com reservations come from a mobile device

The reason they were giving information about mobile bookings and research is that they now offer;

Mobile Rates:

So, what is a Mobile Rate?

Booking.com will be suggesting that property owners offer a discount to guests who book via a mobile device, lower than what is available on their normal website.  Properties who ‘opt-in’ and supply a discounted rate for mobile device bookers will have their properties listed higher on their search rankings than those who don’t.

The attendees were not impressed with this new way for Booking.com to force properties to discount their rates, and it didn’t go down well during the workshop.

Business Rates

Booking.com will be advertising to past guests who have advised that they are travelling for ‘business’ in an attempt to gain further bookings directly from businesses, thus trying to undercut specialised Corporate Rates properties already have in place.

There were some conditions;

1.  Rates are for “Genius Business Guests Only”.

2.  The MINIMUM discount offer that property owners can supply must be at least 15%.

3.  Guests can book weekdays only

The implications of this were that a “Genius Business Guest” already gets a minimum of 5% discount, plus the new (minimum) 15% discount equalling at least a 20% discount on your rate.

I asked if Booking.com was going to reduce the commission on any of these bookings as (at least) 20% on top of the (at least) 15% commission meant that for a $100.00 value room, the property owner would only be getting, at a maximum $65.00, less if they have opted in for other features.

They advised that as this is a voluntary ‘opt-in’, Booking.com would not be reducing their commission to anyone.

Minimum Stays:

It’s no surprise that Booking.com doesn’t like ‘minimum stays’ as these are potential ‘blockers’ for guests who don’t wish to stay for more than one night.

So, Booking.com is now suggesting that property owners stop minimum stays and instead double the price of the room for the night…  Their argument, the property owner would still be getting the same amount, and if they are able to sell the room twice for double the amount, it’s a win for the property, not to mention them.  The difference is they don’t have to deal with the potential arguments from guests who would be paying double what they normally would for a single night.

The three Account Managers hosting the workshop couldn’t understand why the attendees got upset by this as it (in their eyes) meant more income for the property.  (their argument).

Virtual Credit Cards (VCC):

One item they did try to push was their VCC.

When one of the attendees asked why they were charged an extra 3.1% fee on top of their normal Merchant Fee, the Booking.com hosts tried to tell them that their banks did this to all VCCs…

I then informed them that this is not true, and banks don’t mind what type of credit card is used, and they don’t charge extra for using a VCC.  The hosts continued to disagree with me until I informed everyone there that the reason a property gets charged the additional fee is because of what’s called; ‘Cross Border Transaction Fees’, and that just like everything that Booking.com do, it is all overseas and not in Australia, so you have to pay extra to your bank to have Booking.com’s VCCs.

Taxes:

The Senior Account Manager, Todd Lacey, then got up and was talking about how Booking.com pay all taxes due in Australia…  This understandably didn’t go down well with the attendees.

I queried if paying $2.76M in taxes in 2018-19 sounded like a fair amount of tax payable, when compared to the income received in Australia for the same period.

A few of the attendees left during this subject, leaving their departing thoughts with the hosts.

Pulse App:

This app looked quite interesting as you could manage your Booking.com account all from one app on your smart device.

The hosts suggested that people download it and have a play to understand what was involved with it.

The Partner Forum:

Similar to our closed Facebook page, Booking.com now have a Forum page where registered property owners can ask questions of other property owners.  They did mention that this is moderated by Booking.com staff and any user not following their rules and guidelines would be barred.

All in all it was a very interesting workshop, but from my impressions, the attendees didn’t seem to appreciate Booking.com’s blatant grab for more commission on yet more bookings.

If you would like more information about any of these topics, please contact;

Todd Lacey
Senior Account Manager, Vic & SA
todd.lacey@booking.com
0422 564 790

Mandy Huynh
Account Manager, Western Vic
mandy.huynh@booking.com
0401 196 092

Dean O’Leary
Account Manager, Eastern Vic
dean.oleary@booking.com
0423 519 549

 

Or myself

Chris Fozard
Operations Manager
Budget Motel Chain
manager@budgetmotels.com.au
(03) 9784 4111

Budget Motel Chain Booking.com logo