LOCAL online tourism and events booking platforms are being squeezed out of the market by international competitors such as Booking.com, Expedia Travel and Google Hotels.
These behemoths had the financial muscle to relegate the local companies far down the list of internet search page listings and afford themselves greater marketing spend, the Competition Commission heard yesterday.
This was the evidence of SA-Venues.com director Christine Searle, who spoke online yesterday at the Competition Commission’s inquiry into online intermediation platforms. Local tourism industry activity has slumped dramatically in the past two years due to the Covid-19 pandemic.
She said since 2011, the SA-Venues.com platform had faced increasing competition from global competitors, both in terms of their access to more favourable internet search listings such as in the first page listings of destination searches, as well as being able to offer the listed destinations lower commission charges for bookings on their platforms.
“We all know that if you are not on the front page of an internet search you don’t get bookings,” she said.
She said that she did not want to blame the Google search engine, as it too had to make money, and that consumers benefited the global platforms, but the extent of the competition was such that the SA-Venues platform had to change its operating model from one of receiving advertising revenue from venues listed on its site, to charging commission from the venue per booking, a change that saw the platform initially becoming unpopular with its listed properties.
She said the commissions charged by the large international platforms on local bookings went overseas, and did not contribute to job creation in this country.
In the meantime, she said many of her locally-based competitors had been forced to retrench workers significantly over the past few years because they could no longer compete.
She said the better internet marketing of the large online platforms meant they could charge well known tourist venues in this country larger commissions, which would be accepted by the local venues, while local online platforms were not able to charge higher commissions.
She said a few years ago, large international platforms might only occupy one or two of the top slots on the first internet search page, but advertising and other listings by these platforms had pushed the SA-Venues platform further down the search listings every year.
“We have had to find ways of marketing and advertising other than Google, to survive,” she said. On top of this, many consumers searched the SA-Venues platform to find a venue, then simply went directly to the venue and booked with it, which was not something the platform could prevent.
Rian Borman, the managing director of online travel agency Flite Site, which mainly does bus bookings, which it sells predominantly through a partnership with Pick n Pay and Boxer stores, said their assumption of the local bus ticketing market was that bus travellers still preferred to interact with someone to buy a bus ticket, and to be able to physically hold a ticket.
He estimated that some 60 percent of bus tickets were sold through retailers like Pick n Pay, Shoprite, Pep and Spar, while 40 percent was sold by the bus companies themselves.
He said some large international bus ticketing online platforms recently started operating in South Africa, but factors still limiting online growth in the bus ticketing market included the availability of data by bus ticket buyers, and the location of bus ticket distribution centres.
He said online bus ticket sales was still in its infancy in South Africa.
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