18/02/2025
The Impact of Online Travel Agencies (OTA) Commissions on SA Tourism and the Local Economy
South Australia’s tourism industry has shown resilience and recovery over the past few years, with the 2023-24 annual report from the South Australian Tourism Commission (SATC) revealing a visitor economy worth $9.9 billion and 40,600 direct tourism jobs. However, amid this recovery lies a significant challenge that directly affects local accommodation and restaurant businesses: the high commissions and booking fees imposed by (OTAs).
While OTAs provide visibility and convenience, the 10–30% commissions they charge on every booking siphon millions of dollars away from the local economy. While these fees are less than 10% of the $9.9 billion, e.g. only 5% that it is $495 million taken directly offshore out of the state economy! More than the total visitor spend in the Barossa was $235M (1400 jobs), Eyre Peninsula $400M, (2900 jobs) Limestone Coast $370M (3000 jobs) Kangaroo Island $141M (1200 jobs) These fees reduce the margins of small businesses, many of which are already operating in tight economic conditions due to rising costs and reduced intrastate and day-trip tourism.
The Flow-On Effect to the State Economy
Here’s the bigger picture:
1️ Reduced Business Revenue: A significant portion of a restaurant or accommodation’s earnings goes directly to OTAs and now table booking platforms, leaving less for reinvestment in staff, facilities, and services.
2️ Leakage of Funds: Many OTAs are foreign owned, meaning a substantial amount of revenue leaves South Australia instead of circulating within the local economy.
3️ Economic Multiplier Effect: Every dollar retained by local businesses has a multiplying effect, supporting suppliers, local jobs, and regional development. High OTA fees undermine this multiplier by diverting funds out of the region.
A Call for Change
To sustain South Australia’s vibrant tourism industry, we must prioritize commission-free platforms that empower local businesses. Imagine if even half of the $1.9 billion in day-trip expenditure was processed through platforms that charge flat annual fees instead of per-transaction commissions. The retained revenue could:
Create jobs.
Support local suppliers.
Invest in better visitor experiences.
Building a Sustainable Future
As we aim to grow the visitor economy to $12.8 billion by 2030, let’s challenge the status quo. By supporting locally owned booking platforms, we can ensure that South Australian tourism revenue stays in South Australia, driving economic growth and enriching our communities.
Let’s have a conversation: How do you think we can strike a balance between digital visibility and fair earnings for our local tourism businesses?
