News
Time to break monopoly of Booking.com with local versions, says minister
View(s):- Leading hotelier welcomes move, but concerns raised by association for SMES in the industry
By Damith Wickramasekara and Tharushi Weerasinghe
Tourism Minister Vijitha Herath says that local alternatives for Booking.com, the international travel services platform, will be rolled out as early as the end of April.
Speaking to the Sunday Times, the Minister noted that the technical elements and complete packages of the services being provided were ready.
“Booking.com was the platform we used when there were no other options, so this allowed it to capture an excess market share with no competitors,” the Minister noted.
The Minister addressing Parliament on March 18, announced the government’s intentions to break the monopoly created by the brand as the platform currently pays no taxes in Sri Lanka while charging high commissions from local vendors.
“We have to decide whether we stay in the same place for he next 10 years or try to grow, that is why I brought this up in Parliament.”
A Sri Lankan app developer in Brisbane is currently working with local companies to create and perfect one of the apps. The Minister noted that about three apps were in the works and were being supported by local hotels. These will be registered with the tourist board and extend beyond accommodation into other tourism services like transportation, souvenir shopping guides, tea, antiques and more to function as one-stop-shop guides for tourists visiting Sri Lanka.
While taxation of Booking.com was under discussion, it would not be a priority – “the priority is introducing and supporting local competition into the market.”
Currently, Booking.com has approximately 16,600 registered accommodation options across Sri Lanka which include hotels, holiday rentals, homestays and more. The number of accommodations registered with the Sri Lanka Tourism Development Authority as at 2019 stood at 2529.
“This is a good idea and something that the industry has been pushing for a while,” claimed veteran hotelier and former president of the Hotels Association of Sri Lanka, Sanath Ukwatte.
He noted that, given that the platform charges high commissions from local businesses, adding that it would also be appropriate for taxes to be paid on the earnings made on the local tourism efforts. “Everyone has to pay taxes, so this makes the playing field equal.”
While the removal of the platform without alternatives would affect small business owners, the concept of competitive platforms was a welcome move. “This is something we can support because we depend heavily on online platforms to attract business,” said M. B. Jayarathna from the Association of Small and Medium Enterprises in Tourism, Sri Lanka.
He noted that registered travel agents also run monopolies and promote their hotels and can afford accommodations to attract guests that many smaller businesses, which comprise a large part of the industry in terms of volume, cannot afford.
He claimed that Booking.com allowed smaller businesses to break past the monopolisation of other tourism giants in the country. Mr. Jayarathna observed that the pushback on booking.com was a recurring theme among larger business owners in the sector and that smaller businesses were often left out of these conversations.
“The government should establish more platforms and allow them to function competitively in the market with established international brands like Booking.com and avoid sudden and sporadic policies that could disrupt how SMEs in the industry function.”
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