Travellers who book Australian hotels through overseas-based online travel agents like Expedia and Wotif may have to fork out more as of next year after it was revealed in the budget that these companies would have to start paying GST.
From 1 July 2019, online traders like Trivago and Booking.com will pay 10% on all Australian accommodation sales to “level the playing field”, the ABC reported.
IBIS World senior travel industry analyst Nathan Cloutman told the broadcaster that while overseas companies would “most likely increases [hotel] prices” as a result of the tax, they mightn’t pass the full 10% on to customers.
"There is a culture of cheap hotels in Australia," he said, adding that the competitive nature of the tourism industry could "limit the amount prices will go up".
Offshore businesses, Mr Cloutman said, could also "use [their] negotiating power to make deals with hotels and airlines".
"They do have power in the industry," he remarked. Accommodation Association of Australia CEO Richard Munro welcomed the announcement, saying it was "high time" overseas companies started "paying their way".
"The dominant online travel agencies command almost 85 per cent of online accommodation bookings in Australia, yet they employ very few people in Australia and pay virtually no tax in Australia," he said.
Overseas hotel booking sites have been exempted from GST on sales since 2005.
Subscription successful! Thank you for subscribing.