B&B Blog

News and updates from the Bed & Breakfast Association

Thursday 3 May 2018

EU proposes new rules to combat the "unfair" practices of OTAs and search engines

The European Commission has this month proposed new rules to combat “unfair trading practices” by online platforms including online travel agents (OTAs) and search engines including Google.

The Commission said hotels, B&Bs and guest houses would be among those to benefit from the rules aimed at creating “a fair, predictable, sustainable and trusted business environment” online.

The proposals provide for “increased transparency”, the introduction of dispute resolution schemes – including a right for trade associations to bring court proceedings – and the establishment of an EU body to monitor the effectiveness of the measures.

“Providers of online intermediation” including Booking.com, Expedia, Google, Facebook and others will be required to publish policies detailing:
  • “How they treat their own goods and services compared to those used by professional users"; and
  • “How they use contract clauses to demand the most-favourable range or price of products and services.”
They will also be required to “set out the general criteria that determine how goods and services are ranked in search results”. (The B&B Association gave evidence to the EU and CMA of how OTA search rankings of B&Bs and hotels are misleading and manipulated.)

They would also have to give “reasonable minimum notice” of changes to terms and conditions. This proposal would prevent abuses such as the minimal notice recently given by one big OTA to B&Bs and hotels about its change of treatment (in the OTA's favour) of commission on cancellations, for instance.

Explaining the new rules, the Commission said: “The current position of online platforms as mediators of business - customer relationships allows them to engage in unfair trading practices that can cause significant economic harm to the businesses that use them.”

Elżbieta Bieńkowska, EU commissioner for the internal market, industry, entrepreneurship and SMEs, said: “[This] approach will give EU businesses the transparency and redress mechanisms that will help them embrace the digital economy.”

Mariya Gabriel, commissioner for the digital economy and society, added: “Platforms and search engines are important channels for European businesses to reach consumers, but we must make sure they are not abusing their power.”

David Weston, chairman of the Bed & Breakfast Association, said: "Although we have not yet been able to study the small print of these very detailed EU proposals, we are delighted that they do seem to be going in the right direction.

"Having held a number of meetings with MEPs and officials in Brussels over the last two years to explain our members' concerns, we are pleased to see that the Commission seem to have understood that the online platforms have been abusing their market dominance, and that the balance or power needs to be redressed in favour of small businesses, and in favour of honesty to the consumer too."

We will keep members informed of the progress of these draft regulations, which the Business, Enterprise, Innovation & Skills department (BEIS) told us last Friday are expected to be passed into UK law (after any revisions made during the consultation process) by the time the UK leaves the EU.

"The growth in short-term let market raises fire concerns" says BBC as Radio 5 Live investigates Airbnb

The growth of home-sharing rental properties is causing fire safety concerns, the National Fire Chiefs Council (NFCC) has told BBC Radio 5 live Investigates as part of a new BBC investigation into the lack of enforcement of rules on properties on Airbnb and similar websites.

Tourism industry leaders told the BBC that a "Grenfell-style incident" could happen unless inspections were enforced. The all-party tourism group of MPs has called for all properties used for short-term lets to be registered.

An NFCC spokesperson said fire and rescue services are "not aware" of how many short-term rental properties are operating in local areas, making it "very difficult" to assess potential risk.

They added: "Without this knowledge of properties essentially operating as a bed and breakfast or hotel, it is almost impossible to carry out an inspection or give owners relevant advice to ensure their buildings are safe."

Fire safety law applies to all properties in which people are paying to stay - even one room, for one night. The rules are enforced by visits to hotels and B&Bs, but fire authorities are not visiting, checking or inspecting similar properties on sites like Airbnb (who have over 168,000 in the UK), unless they have received a specific fire safety complaint.

In 2017, a flat rented out on Airbnb in Plymouth was called a "deathtrap" after a fire inspection (following a complaint) discovered it had toxic tiles, faulty locks and a fire extinguisher that had not been tested for more than 15 years. The owner was given a six-month suspended sentence.

Kate Nicholls of UK Hospitality said there was a large volume of evidence suggesting that commercial landlords were using online home-sharing sites to rent out large properties all year round: "We are potentially risking a Grenfell-type tragedy that would be disastrous for families and further damage our reputation as a safe, attractive tourist destination."

In March, MPs on the parliamentary group for tourism said "all businesses offering accommodation should compete on a level playing field" when it comes to regulation.
But the B&B Association told the BBC there was currently a "total and utter lack of enforcement" of safety regulations in the short-term lettings market.

As the BBC reported, our chairman David Weston said: "The authorities only inspect high-risk Airbnb style properties if someone complains, which is hugely unlikely, or if there is a fire."

David met the head of the Home Office fire safety unit and the heads of the National Fire Chiefs' Council on 13th April for talks about how the enforcement of fire safety rules can be applied to Airbnb properties in the same way as it currently only is to B&Bs.

The officials also agreed that the B&B Association would be invited to help review and replace the current Official Guidance (Do You Have Paying Guests?), after the Hackett Review reports on fire safety enforcement post-Grenfell.