Competition regulator
acts after B&B Association’s five formal complaints last July
The CMA today launched “enforcement action
against a number of hotel booking sites” that it believes “may be breaking
consumer protection law”.
As part of its ongoing investigation launched last October, the
Competition and Markets Authority (CMA) has identified widespread concerns,
including:
Search results: how hotels are ranked,
for example to what extent search results are
influenced by factors that may not be relevant to the customer’s requirements,
such as the amount of commission a hotel pays the site.
Pressure selling: 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.
Discount claims: 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: 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.
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.
“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.”
The CMA’s investigation was launched in
October, and covers concerns raised by the Bed
& Breakfast Association to the CMA last July and in a meeting with CMA
officials in September.
David
Weston, Chairman of the B&B Association, says: “The Bed
& Breakfast Association are absolutely delighted that the UK competition
regulator, the CMA, has today announced “enforcement action” against Online
Travel Agencies (OTAs) that it believes are breaking consumer protection law.
The areas covered are those we raised in our five formal complaints to the CMA
last July - ie false “discounts”, false availability claims and other “pressure
selling” techniques, manipulated search rankings influenced by payments to the
OTAs, and false “Best Price” guarantees. The CMA’s very welcome action will
help move the balance of power a little from these global tech giants – who are
after all only intermediaries - back towards the small businesses that actually
own the accommodation booked, and provide the hospitality.”
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 (ASA). 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.
Anyone wishing to provide further evidence on
the issues being considered can do so at: https://www.gov.uk/cma-cases/online-hotel-booking
