Eu travel tech, Travel Tech and Asia Travel and Technology Industry Association have joined forces to take on global concerns around regulation, taxation and competition.
The three travel tech associations in Europe, Asia and the United States have come together to form the Global Travel Tech alliance, aimed at fostering innovation and competitiveness in response to anticipated regulatory changes affecting digital travel platforms worldwide.
The eu travel tech, ATTIA and U.S. body Travel Tech will launch their alliance at ITB Berlin next month, with a starting member base of six brands – Expedia Group, Booking Holdings, eDreams ODIGEO, Amadeus, Travelport and Skyscanner.
Eu travel tech, which started in 2009, will be the secretariat with secretary general Emmanuel Mounier leading the alliance.
“We have shared membership, and 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.
Travel Tech, founded in 1999, and eu travel tech 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 industry associations such as IATA, for example.
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.
“You hear reports of hotels complaining about [online travel agencies], airlines complaining about indirect distribution, we want to balance the discussion.”
One key global issue that is becoming a concern across Asia Pacific markets, for example, 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.”
Mounier said, “When you apply that to travel, it has a lot of impact. In many cases, taxes tie the transactions to a country, but most of our transactions are cross-border, and if it’s between two countries, you then have double taxation – and high taxes affect profit margins. We are not like marketplace models such as Amazon. We are more like travel agents.”
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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, depending on how the OECD Pillar 1 conversations pan out. The backend work required to comply would naturally be a concern for OTAs, and short-term rental providers.”
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, “Some large online platforms act as ‘gatekeepers’ in digital markets. The Digital Markets Act aims to ensure that these platforms behave in a fair way online. Together with the Digital Services Act, the Digital Markets Act is one of the centerpieces of the European digital strategy.”
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 DMA deadline by 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, “Some platforms need to be regulated. What a search engine like Google does with its hotels and flights competes with what our members are doing, and it is unfair competition.”
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. 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 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 information to be standardized on carbon emissions on flights and accommodation services. We want to be part of these discussions.”
On content moderation, Mounier said UNESCO had issued guiding principles, but “OTAs are different from social networks and that difference is not reflected in the discussions. Right now, it’s about how content affects democracies and consumers, but there are different issues with travel.”
The concern is that online travel platforms will get swept up into the wider net of big tech, and without consideration of the unique nature of travel.
And as for the next wave – that of artificial intelligence, he said, “The policy discussion around AI is just starting. There needs to be a clear understanding of how it will impact businesses and consumers before you can begin talk of policies and regulations. In Europe, there were long discussions about the AI Act and regulating industries by risk.
“Travel is not defense, not a high risk, so there is no impact yet, but discussions are just starting. Specialists are being hired to understand how AI could have impact on competition. For example, could the whole Google search model be thrown into question with AI? There are lots more questions than answers now, and we want to share the questions among ourselves to prepare for what comes next.”
*This article originally appeared on WiT.