Six global travel brands – Expedia Group, Booking Holdings, eDreams Odigeo, Amadeus, Travelport and Skyscanner – are joining forces to form Global Travel Tech, which aims to foster innovation and competitiveness in response to anticipated regulatory changes affecting digital travel platforms worldwide.
Global Travel Tech will work to take on global concerns around regulation, taxation and competition. Eu travel tech, Asia Travel and Technology Industry Association (ATTIA) and Travel Tech will launch the alliance at ITB Berlin next week.
Eu travel tech’s secretary general Emmanuel Mounier will lead 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.
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United States-based Travel Tech, founded in 1999, and eu travel tech, founded in 2009, each has 16 members while Singapore-based ATTIA, established in 2018, has seven members. By having a global body, Mounier said, it can have global-level discussions with international organizations or other global industry associations such as IATA.
The mission of the alliance, embodied in each of the association’s values, is to promote the positive role of indirect distribution channels, to ensure the transparency of offers and to facilitate competition between suppliers, added Mounier.
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 of ATTIA said this concern is very real in Asia with countries looking at implementing DSTs in varying ways.
“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.”
On top of that, the new government of New Zealand is also pushing ahead with the “app tax,” which will see a goods and services tax (GST) imposed on individual sharing economy platform transactions, such as those on Uber and Airbnb this April.
Currently, short-term rental platforms already pay GST on their revenues, and hosts are additionally subject to GST themselves if they make more than NZ$60,000 in annual revenue.
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 tries to curb the negative effect of those digital gatekeepers on various sectors including travel and tourism.
Eu travel tech has been vocal in its calls on Google to stop 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.”
*This story originally appeared in Web in Travel.
