After an eight month investigation, the Competition & Markets Authority (CMA) has announced that it is launching enforcement action against a number of hotel booking websites, seeking changes to how information is presented (with the threat of court action if they don’t). It is also sending warning letters to a wider range of website owners, “demanding that they review their terms and practices”.
The CMA says that it has identified “widespread concerns” about the practices of hotel booking sites, with particular problems relating to:
- rankings of search results being driven by which hotel pays most commission, rather than which offers the best deal to consumers;
- use of “pressure selling” tactics, for example by claims about how many other people are viewing the same offer;
- misleading discount claims, for example based upon higher prices not relevant to the consumer’s booking; and
- failures to disclose all charges in the price first quoted, for example “hidden” booking fees or taxes.
The CMA is also asking the Advertising Standards Authority to examine certain types of claim made on such websites (for example “best price guarantee” or “lowest price”) to ensure that there is clarity as to which would be misleading, and which properly substantiated, under the CAP Code.
The CMA's range of enforcement options also include requiring a legally binding undertaking from site operators to cease any infringing practices, or court action under consumer legislation that could see infringing parties subject to heavy fines. All this, however, may seem trivial by comparison to the fall out from the negative publicity this issue generates for the businesses involved.
Whilst yesterday's announcement focusses on hotel comparison sites, providers of other price comparison sites should not rest easy as the CMA has also dispatched letter to a range of other providers to warn them against such practices.
With referrals already made to the ASA regarding misleading advertising, and an ongoing CMA investigation, we anticipate that this is not the last we will be writing about this issue. Operators of price comparison sites should review their advertising practices now, before someone else does it for them.
For more background about the CMA investigation into online hotel booking sites, check out this animatic that the CMA published on YouTube at the start of their investigation.
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