The Competition and Markets Authority (CMA) has warned that some unnamed hotel booking sites have been misleading consumers, citing transparency, clarity, accuracy and presentation of information as key areas of concern. The sites have been accused of confusing consumers rather than helping them to make informed decisions and of using pressuring tactics to make a quick sale.
The CMA also highlighted the unfair way in which commission paid by hotels could influence rankings and of the hidden costs introduced later in the booking process. In response, it has issued letters to a “range of sites” demanding they review their practice to ensure they are fair and comply with consumer protection low.
The Key Areas of Concern are:
- 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.
Restoring Digital Consumer Confidence
Consumers put a lot of faith in online booking sites such as Expedia and Booking.com to organise their travel. These unethical and manipulative tactics have the potential, if left unremedied, to do real damage to the public’s trust in the digital ecosystem.
Trust in digital is at all-time low due to the rise in cybercrime and a slew of recent digital scandals involving data harvesting and user manipulation.
The sites have been ordered by the CMA to review their practices, and to respond within the next few months. At the end of the review period, the sites can either give a legally-binding commitment to change the way they operate or prove that their practices do not break the law. Ultimately, if the CMA disagrees with their argument it can take the companies to court where they face the possibility of unlimited fines.
Further Concerns Over Wording
This action by the CMA is a step in the right direction and signals to providers that this sort of behaviour is unacceptable and that there will be consequences.
Furthermore, the CMA is also referring several of its concerns to the Advertising Standards Authority (ASA) over the use of statements like ‘best price guarantee’ and ‘lowest price’ to establish what conditions must be met for company lies to make such claims.
UK Hospitality chief executive, Kate Nicholls, who welcomed the decision, said: “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.”