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Tourism Ministry formulates Guidelines for approval of Online Travel Aggregators

The Union Ministry of Tourism has formulated the guidelines for approval and re-approval of Online Travel Aggregators to ensure adequate safeguards against deficiency of service, alternate arrangements and punitive deterrence.

The voluntary scheme will be open to bonafide online travel aggregators to bring them on a common platform in the organised sector. The guidelines will be rolled out online by the end of December 2018. Hence, all applications and fee payment will have to be made on the online platform.

Objective

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.

What is OTA?

An Online Travel Aggregator (OTA) is an intermediary or an agent selling travel products and services such as the airlines, car rental, cruise lines, hotels and accommodation, railways 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 and agents or other service providers like hotels, homestays on its platform under its brand.

- Connect the buyers with potential travel, hospitality and related service providers and sellers on its platform under its brand.

- Prescribe amenities or quality standards and influence the service providers to match the potential customer’s needs.

- Enter into agreements with such service providers laying down benchmarks, standards, commission rates and other services required from such service providers.

Guidelines: Key Highlights

The Tourism Ministry will grant recognition as an approved OTA for five years, based on the inspection report and recommendations of a committee comprising the concerned Regional Director (RD), a representative of FHRAI and IATO each and the approval of competent authority such as the Chairman of The Hotel & Restaurant Approval & Classification Committee (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 made by OTA,  complete and free from all deficiencies along with the requisite fee and documents on the online platform.

The re-approval application would have to be submitted 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 the applicants after scrutiny in all respects would be acknowledged online.

The inspection for the first approval or re-approval shall be conducted by the inspection team within a period of forty working days from the receipt of complete and deficiency-free application and confirmation of payment of fees by the Pay and Accounts Office, Ministry of Tourism.

It shall 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 and online portal.

The decision of the Tourism Ministry, in the matter of approval and re-approval shall be final.

However, the Ministry may at their discretion refuse to re-approve any firm or withdraw or withhold at any time approval or re-approval already granted. Before such a decision is taken, a necessary Show Cause Notice would invariably be issued and the reply considered on merit. This would be done after careful consideration. The circumstances in which withdrawal is effected would also be indicated.

The Ministry said in order to engage with the OTAs constructively, it is imperative that a system is put in place with qualitative benchmarks to accredit them.

Background

In the recent past, several Online Travel Aggregators (OTA) who are aggregating rooms in the various accommodation segments have emerged.

The bed and breakfast and homestay segment has always suffered from inadequate marketing owing to the small scale of business. The emergence of OTAs can galvanise this segment and emerge as a game changer.

However, there are several players in the OTA segment operating now without any accreditation or  validation and one of the key risks of letting the market operate unhindered is that unscrupulous players can vitiate the entire market through unethical trade practices.

The paramount concern would be the assurance of quality of service delivery for the customer by the OTA. Hence, in order to engage with the OTAs constructively, it is imperative that a system is put in place with qualitative benchmarks to accredit them. 

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