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KI Accommodation Providers Have a Whinge

I watched the SA ABC’s Stateline programme on Friday night. There was a segment about KI Sealink and some of Kangaroo Island’s accommodation services.

The accommodation providers said it was unfair that they weren’t benefitting from a Sealink partnership programme they hadn’t joined and didn’t want to pay for.

They had complained to Sealink, then to the ACCC. The ACCC found their complaint was without foundation, so they enlisted a self-promoting politician and academic, and complained to the media.

I didn’t know whether to be amused or appalled.

Sealink is a commercial venture. Its future reliability depends on its continuing to make a profit.

Without strong profits it could not employ the staff it does on Kangaroo Island and elsewhere. It could not maintain and service its vessels and other infrastructure. It could not make provision to purchase replacement vessels and buildings when necessary. It could not pay $10,000 per week in wharfage fees (essentially a state government toll on the only road in and out of our community, the only community in the state that has to pay such an impost), and it could not pay taxes which contribute to roads, hospitals and schools.

Sealink is under no obligation to offer lower fares to residents, or any reduced fares at all, even as part of a campaign to bring more visitors to the island.

When it does offer below cost fares, that loss needs to be recovered from somewhere else.

One way to do this is to invite accommodation services to partner with it. Those who choose to be partners share in meeting the cost of the reduced fares. In return, they get more prominent publicity, and priority in accommodation bookings made through Sealink.

There is nothing remotely anti-competitive about this. It is not, for example, like service providers agreeing to fix prices.

But some providers who have chosen not to participate are complaining it is unfair.

This is a bit like complaining it is unfair that people who pay for advertising in The Islander get more customers than people who don’t. Fairfax has plenty of money. They should offer free advertising space to people who don’t want to pay, so those people are not disadvantaged.

That would be ridiculous. It is no less ridiculous for people who have chosen not to participate in a partnership programme to complain it is unfair when they get fewer bookings than people who have.

It is a simple commercial decision. If you think your business would be more profitable paying the partnership fee and commissions, then join. If you don’t, don’t join.

But whatever you decide, don’t whine about it.