According to a press release issue by the GOV.UK website, the British based Competition and Markets Authority (CMA) ‘has secured a victory for UK holidaymakers as some of the biggest online hotel booking sites make formal commitments to change their ways’.
Enforcement action has already been applied to the giants like Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago ‘due to serious concerns around issues like pressure selling, misleading discount claims, the effect that commission has on how hotels are ordered on site and hidden charges’.
The Competition and Markets Authority were driven to action last year because it was concerned that practices such as giving a false impression of a room’s popularity or not displaying the full cost of a room upfront could possibly mislead people and stop them finding the best deal while potentially break consumer protection law.
It is important to point out that all the companies under investigation by the CMA have co-operated with its work and have already voluntarily agreed to the following:
Search results: making is clearer how hotels are ranked after a customer has entered their search requirements, for example telling people when search results have been affected by the amount of commission a hotel pays the site.
Pressure selling: not giving a false impression of the availability or popularity of a hotel or rushing customers into making a booking decision based on incomplete information. For example, when highlighting that other customers are looking at the same hotel as you, making it clear they may not be searching for different dates.
The CMA also saw examples of some sites strategically placing sold out hotels within search results to put pressure on people to book more quickly.
Discount claims: being clearer about discounts and only promoting deals that are actually available at that time. Examples of misleading discount claims may include comparisons with a higher price that was not relevant to the customer’s search criteria. Some sites were comparing a higher weekend room rate with a weekday rate or comparing the price of a luxury suite with a standard room.
Hidden charges: displaying all compulsory charges such as taxes, booking or resort fees in the headline price. Sites can still break that price down, but the total amount the customer has to pay should be shown upfront.
The CMA will now monitor compliance with the commitments made by the bookings sites which must be fully implemented by 1st September 2019 latest.
While this groundbreaking ‘action’ by the CMA is currently limited to online agencies domiciled in the United Kingdom, I suspect other countries will adopt all or a substantial part of the enforcement.
In my humble opinion this intervention was long overdue and will substantially help eradicate the clear disparity and confusion that previously existed.
It will also help level the playing field for the many large hotel brands who have invested substantially in trying to attract a higher percentage of returning guests by guaranteeing the lowest room rate when booking direct.