Friday, March 1, 2024
Leading Travel Giants Unite to Establish Global Travel Tech in Response to Anticipated Regulatory Changes
Expedia Group, Booking Holdings, eDreams Odigeo, Amadeus, Travelport, and Skyscanner have joined forces to create Global Travel Tech, an initiative aimed at promoting innovation and competitiveness amid forthcoming regulatory shifts impacting digital travel platforms globally.
Global Travel Tech will address international concerns regarding regulation, taxation, and competition. The alliance will be officially launched at ITB Berlin next week, with the support of Eu Travel Tech, Asia Travel and Technology Industry Association (ATTIA), and Travel Tech.
Emmanuel Mounier, the Secretary General of Eu Travel Tech, will spearhead the alliance in his personal capacity.
“There are global issues facing the business – regulation of digital platforms, content moderation, taxation and competition – and it makes sense for us to come together to tackle global issues together and to have a seat at the global policy table,” he said.
Founded in 1999, Travel Tech, headquartered in the United States, and eu travel tech, established in 2009, boast 16 members each, while Singapore-based ATTIA, formed in 2018, comprises seven members. Emmanuel Mounier highlighted the significance of a global entity, stating that it enables comprehensive discussions with international organizations and other global industry associations like IATA.
Mounier emphasized that the alliance’s mission, reflected in the values of each association, is to champion the constructive impact of indirect distribution channels, guarantee offer transparency, and foster supplier competition.
One key global issue that is becoming a concern across Asia Pacific markets is digital service taxes (DSTs). According to this PWC report, “The stated aim of DSTs is to ensure that ‘market’ countries get increased taxing rights over the profits of tech-based multinational companies that sell into their local market and collect data from and target advertisements at local audiences, regardless of their physical presence.”
“When you apply that to travel, it has a lot of impact,” Mounier said. “Many travelers book transport, accommodations or other travel services outside of their country of residence. When both the traveler’s country and the destination country have DSTs, this can easily result in double taxation. Since these taxes are not levied on profits, but on revenue, they cut directly into travel tech companies’ already low profit margins.”
Mark Chan from ATTIA expressed the genuine concern prevalent in Asia, where countries are contemplating the implementation of Digital Services Taxes (DSTs) through diverse approaches.
“New Zealand, for example, may go ahead with DST next year,” Chan said. “This unilateral approach to the DST could pose challenges for online travel agencies and short-term rental providers, as they would then need to navigate a more complex and fragmented tax landscape.”
Furthermore, the incoming government of New Zealand is advancing the implementation of an “app tax,” which entails the imposition of Goods and Services Tax (GST) on individual transactions within the sharing economy platforms like Uber and Airbnb starting this April.
Presently, short-term rental platforms are already obligated to pay GST on their revenues. Additionally, hosts are subject to GST if their annual revenue exceeds NZ$60,000.
Regulation of digital platforms is another pressing issue.
“In Europe, the Digital Markets Act has been introduced to ensure fairness in competition, and we see this happening also in India, Japan, Canada and the [United Kingdom],” said Mounier.
According to the DMA, “The rise of gatekeepers is a worrying trend in the digital ecosystem.”
The Digital Markets Act aims to mitigate the adverse impacts of digital gatekeepers on several sectors, including travel and tourism.
Eu Travel Tech has been outspoken in urging Google to cease its anti-competitive practices.
In a statement released in January in anticipation of a DMA deadline of March 7, Mounier said, “eu travel tech has been in a dialogue with Google regarding their compliance solutions for travel search for months. We urge Google to put an end to the preferential treatment of its own services against those of its competitors. Our assessment of the solutions shared so far is that there is still quite some work to do.”
Mounier told WiT, “Google unfairly prioritizes its own travel tools. These self-preferential search practices stifle competition, reduce traveler choice and drive up costs. We need more jurisdictions tackling those practices, like done by the DMA in the EU.”
Chan said the issue of competition regulations was being raised in India, Japan, South Korea and Australia.
“The Brussels effect is alive and well in Asia,” he said.
“In Japan’s case, debates have focused on their mobile ecosystems. In India, it seeks to encourage innovation and competition among local players but could better address anti-competitive gatekeepers so that Indian consumers can still benefit from innovative global platform services. In South Korea, a key issue is how gatekeeper regulations will affect the local giants like Naver and Kakao.
“These regulations will ultimately influence the choices available to consumers and the array of tourism services within APAC [Asia-Pacific region] markets. GTT (Global Travel Tech) is a channel for ATTIA to draw from the valuable experiences and best practices of global counterparts, allowing us to recommend innovative policies to APAC governments that address local context needs.”
Mounier said sustainability is another pressing issue. Calling it “the defining issue of our economies,” he said the travel sector, in its transition toward becoming a low carbon industry, needs the right policy framework.
“We want to help consumers make the right choice, so we need to give them the information they need and for the right regulatory framework to ensure harmonization at global level, for instance on carbon emissions on flights and accommodation services. We want to be part of these discussions.”
Saturday, April 27, 2024
Saturday, April 27, 2024
Sunday, April 28, 2024
