Under current contracts between some major online travel agents and individual accommodation providers, clauses are in place legally prohibiting hotels, motels and serviced apartments from competing against the big OTAs with their own promotions or reduced rate offers.

Munro said any tax increase levied against online travel agents will simply be passed on and would have to be absorbed by accommodation providers as they were unable to raise their own rates to compensate. This practice, he added, would drive consumers in greater numbers to stay at unregulated accommodation operators such as AirBnb hosts.