Industry regulator, the Competition and Markets Authority (CMA), has confirmed six of the largest hotel and holiday booking websites have agreed to change their online practices in response to concerns that consumers are being misled and prevented from finding the best deals.
Agoda, booking.com, ebookers, Expedia, Hotels.com and trivago have all undertaken to abide by a new industry code of conduct.
The CMA took action against the sites following an investigation starting in October 2017 into industry sales tactics. A number of common practices were identified that were found to mislead consumers, including giving a false impression of a room’s popularity and availability, not displaying the full cost of a room upfront and potential breaches of consumer protection law.
The new code of practice forms part of a wider drive by the CMA in exercising its using its consumer protection powers to investigate companies for suspected breaches of the consumer protection rules and, through binding undertakings from these companies, ensure changes are made to terms and business practices. It is hoped the new code of practice and increased regulatory scrutiny will improve consumer confidence in this sector and help protect vulnerable consumers.
Which practices are being banned?
Under the new rules, hotel booking and travel sites will be required to state upfront the total cost of the room, including all charges, taxes, booking, resort fees and all other extra fees within the headline price. It will no longer be acceptable to state all hidden charges at the end of the process.
Pressure-selling tactics will also be banned to prevent creating a false or exaggerated impression of room availability or popularity. For example, sites are not allowed to claim a specific number of people are looking at the same hotel.
Misleading discount claims are also being tackled. Better clarity of discount rates will be required to enable consumers to compare like for like, and only discounts available to the consumer at the time of purchase can be displayed.
Websites will also have to make it clear how listed hotels are ranked, for example, if this is by commission paid to the site.
While the CMA noted that not all of the hotel booking companies engaged in all of the unfair practices, they will be co-operating with the CMA in making changes to the way they promote deals and explain charges online.
Other providers in the market, including booking sites and travel agents, are now being urged to review their tactics and make necessary changes to follow the new standards by 1st September 2019 to avoid CMA enforcement action.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
