Hotel booking sites told to shape up by Competition & Markets Authority
The UK Competition & Markets Authority will launch enforcement action against a number of hotel booking sites that it believes may be breaking consumer protection law.
The watchdog has concerns over how hotels are ranked on bookings sites, as well as whether claims about how many people are looking at the same room, how many rooms may be left, or how long a price is available, create a false impression of room availability or rush customers into making a booking decision.
Andrea Coscelli, chief executive of the CMA, said: “Booking sites can make it so much easier to choose your holiday, but only if people are able to trust them.
“Holidaymakers must feel sure they’re getting the deal they expected, whether that’s securing the discount promised or receiving reliable information about availability of rooms.
“It’s also important that no one feels pressured by misleading statements into making a booking.”
Around 70 per cent of UK consumers use online booking sites to select their accommodation, the CMA said.
The CMA also said it has concerns over whether the discount claims made on sites offer a fair comparison for customers.
For example, the claim could be based on a higher price that was only available for a brief period or not relevant to the customer’s search criteria, such as comparing a higher weekend room rate with the weekday rate for which the customer has searched.
Hidden charges will also come under the spotlight, with the extent to which sites include all costs in the price they first show customers or whether people are later faced with unexpected fees, such as taxes or booking fees.
The CMA will be requiring the sites to take action to address its concerns, where they are believed to be breaking consumer protection law.
It can either secure legally binding commitments from those involved to change their business practices or, if necessary, take them to court.
If court action is taken, unlimited fines can be taken against sites.
The CMA did not say which sites it is currently investigating.
“That’s why we’re now demanding that sites think again about how they’re presenting information to their customers and make sure they’re complying with the law. Our next step is to take any necessary action – including through the courts if needed – to ensure people get a fair deal,” added Coscelli.
In addition to its enforcement activity, the CMA has sent warning letters to a range of sites, demanding they review their terms and practices to make sure they are fair and comply with consumer protection law.
It is also referring a number of concerns around online hotel booking sites’ price guarantees and other price promises to the Advertising Standards Authority.
The CMA has asked the ASA to consider whether statements like ‘best price guarantee’ or ‘lowest price’ mislead customers and what conditions must be met for companies to make such claims.
The CMA continues to assess the evidence it has gathered on the practices of other online hotel booking sites and could launch further enforcement cases in due course.
Responding to the action, UKHospitality chief executive Kate Nicholls said: “For consumers, the CMA’s announcement should bring some reassurance, which can not only be good news for hoteliers, too.
“We have been working tirelessly to highlight these practices, so are pleased to see the CMA take action.
“The CMA clearly intends to ensure that online booking sites are transparent and accurate, and that customers have complete peace of mind when booking.
“Extra reassurance for customers is welcome and that confidence should provide a boost for businesses.”
She added: “The fees that online travel agents charge hoteliers inevitably result in higher costs to the consumer - a premium of which many holidaymakers are not even aware.
“Consumers and accommodation providers would be better served by a wider review of the business to platform relationship, which is now overdue.
“The practices addressed here exposes yet another example of digital businesses stealing an unfair lead on honest, regulated operators whose first concern is to deliver good service to their customers.”
Anyone wishing to provide further evidence on the issues being considered can do so on the online hotel booking case page.