Local company looking to stem flow of OTA fees

PORT DOUGLAS

Howard Salkow

Senior Journalist

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It is estimated over the past 10 years, more than $180 million has headed offshore to Online Travel Agencies (OTA). IMAGE: Supplied.

TWO local entrepreneurs are embarking on a bold plan to stem the flow of fees paid to Online Travel Agencies (OTA) with this year expected to be in the region of $20 million.

Championed by Gerry Ireland and Glenn Smith, they have created Port Douglas Direct (PDD) which will operate as an overarching tourism and marketing company designed to provide benefits to resort and property owners and managers in Port Douglas.

It will have access to the most sophisticated technology – GENKAN – and collective marketing ideals to place the power back in the hands of the business owners. GENKAN is property management software for vacation reservations and bookings.

The project’s business model was introduced last month to 19 Port Douglas resort owners and managers.

According to the co-founders, the attendees expressed concern about the impact of OTAs and were encouraged to see something was being done to prevent the millions of dollars leaving Port Douglas and Far North Queensland.

Smith said the technology would be the key to assist businesses retain funds from bookings.

“This has implications for the whole of Australia. We are doing our bit by taking the lead in Port Douglas,” said Smith.

Tourists planning to visit Port Douglas invariably book online through an OTA – such as Booking.com, Wotif, Expedia, HomeAway or Tripadvisor – and resort and hotel managers are stung with a commission that can be as high as 25%. The local economy is impacted because the OTAs are owned by multi-national corporations with all fees going overseas.

Ireland has estimated over the past 10 years, more than $180 million has headed offshore.

“This should shock everyone in the region, especially when you consider we are 85% dependent on tourism.

“Before the OTAs emerged 15 years ago, this revenue remained in the Port Douglas region,” said Ireland. 

Port Douglas Direct is driven by the amount of control the OTAs have over the Port Douglas market. Data released at a recent Vacation Rental Managers conference in Paris, predicted that by 2020, more than 72% of all worldwide bookings will be taken by OTAs, rising to 80% by 2022.

“The key to our success will be the establishment of a data base which will we use to retain customers, encourage dormant visitors to return and target those who have not been to Port Douglas. This will encompass all demographic groups,” said Ireland.

With plans to launch on November 1 this year, bookings and information will be steered from PDD to the discoverportdouglas.com website which will provide appropriate information such as rates, relevant content and availability; and the link to GENKAN’s software for bookings.

Discoverportdouglas.com will aggregate many accommodation businesses into one strong business website and marketing arm.

Also planned is a mobile APP, a loyalty card and a tour desk which will be set up on Macrossan Street and will be manned by an administrative leader. PDD also plans to recruit a general manager, a creative designer and a social media expert.

“What we are doing is putting another car on the road, but one that will assist Port Douglas. What we are working on now is getting the respective resort and property managers on board to join PDD to benefit from our initiative and their returns will remain here.

“We have had a mixed response thus far and to date, 12 have signed and we are looking to increasing this over the next few months,” said Ireland.

He said PDD has the advantage of local knowledge and local customers. And once we have launched our APP, it will drive people to discoverportdouglas.com.

“Another advantage is that none of the OTAs have a marketing plan or a customer base for Port Douglas and we plan to capitalise on this. Another area we are looking at is re-negotiating the commission structure with the OTAs.

“We realise and understand who and what we are taking on, but if we can control our own destiny and discoverportdouglas.com becomes a key player, the resorts and hotels will benefit and the revenue will not leave Port Douglas,” said Ireland.

Although frustrated that the Australian Tourism Data Warehouse (ATDW), established in 2001, has not led the way in keeping tourism wealth in Australia, Ireland said they would be meeting with Warren Entsch, the Federal Member for Leichhardt, to garner his support and discuss possible inroads he can make at a federal level.   

 

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