Tourism ministry to issue guidelines for online travel aggregators soon
11 December 2018
The ministry of tourism has formulated guidelines for approval /re-approval of online travel aggregators (OTAs) to ensure adequate safeguards against deficiency of service. The guidelines require OTAs to make alternate arrangements for any deficiency in service quality. It also prescribes punitive deterrence.
This is a voluntary scheme open to bona fide online travel aggregators to bring them on a common platform in the organised sector and the guidelines will be rolled out online by the end of this month, a tourism ministry release stated.
The scheme for approval / re-approval of OTAs will be rolled out on the online platform and all applications and fee payment will have to be made on the online platform. The scheme is expected to set standards towards accreditation and add value to the dependability and reliability to the aggregators in the online space operating in the organised tourism sector.
An OTA may be granted approval by the ministry of tourism for a five-year period, based on the Inspection report / recommendations of a committee comprising the concerned regional director, a representative of FHRAI, and a representative of IATO, and approval of competent authority (chairman, HRACC).
The re-approval, thereafter, shall be granted for five years after inspection conducted by a committee of the same constitution, based upon an application, complete and free from all deficiencies, made by OTA along with the requisite fee / documents on the online platform, at least a clear 6 months prior to the expiry of the previous approval. In case the application complete in all respect and free from all deficiencies is not received at least a clear 6 months prior to the expiry of the previous approval, it will be treated as a case for fresh approval.
The documents received from applicants after scrutiny in all respects would be acknowledged online. The inspection for first approval / re-approval shall be conducted by the inspection team within a period of 40 working days from the receipt of complete and deficiency-free application and confirmation of payment of fees by pay and accounts office of the ministry of tourism.
It will be mandatory for an approved OTA to prominently display the certificate of approval given by the ministry in the office premises by displaying it in a photo frame so that it is visible to a potential tourist and also under a prominent link on the home page of its main website/ online portal.
The decision of ministry of tourism in the matter of approval/ re-approval will be final. However, the ministry may at their discretion refuse to re-approve any firm or withdraw / withhold at any time approval/ re-approval already granted. Before such a decision is taken, necessary show-cause notice would invariably be issued and the reply considered on merit. This would be done after careful consideration. Circumstances in which withdrawal is effected would also be indicated.
The ministry’s move comes in the wake of complaints about OTAs aggregating rooms in the various accommodation segments in the recent past.
Online aggregators can be of use in the B&B / homestay segment, where there is a lack of proper marketing owing to the small scale of business. The emergence of OTAs can galvanise this segment and emerge as a game changer.
An Online Travel Aggregator (OTA) is an intermediary / agent selling travel products and services such as the airlines, car rental, cruise lines, hotel rooms / accommodation, railway tours and vacation packages on behalf of suppliers using internet as a medium. They establish an online market place and earn profits on the discounts commonly referred to as commission offered by the suppliers. In doing so, an OTA may:
- List the travel related service providers/agents or other service providers like hotels, homestays on its platform under its brand;
- Connect buyers with potential travel, hospitality and related service providers/ sellers on its platform under its brand;
- Prescribe amenities and/or quality standards and influence the service providers to match the potential customer’s needs; and
- Enter into agreements with such service providers laying down benchmarks, standards, commission rates and other services required from such service providers.
There are several players in the OTA segment operating now without any accreditation / validation. One of the risks of letting the market operate unhindered is that unscrupulous players can vitiate the entire market through unethical trade practices. In order to engage with the OTAs constructively, it is imperative that a system is put in place with qualitative benchmarks to accredit them. The paramount concern would be the assurance of quality of service delivery for the customer by the OTA.