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Hotel booking sites under the spotlight as the Competition and Markets Authority launches investigation

David Bond
13/11/2017

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United Kingdom

By David Bond and Hannah Blake With 70% of consumers searching for rooms through hotel booking sites last year, it is a common way for consumers to find the best deal. The Competition and Markets Authority (CMA) however, is concerned that booking sites may not always be providing consumers with the best hotel deal and has launched an investigation to examine whether booking sites are breaking consumer laws by misleading consumers in their search for the best hotel deal.

The CMA's investigation will focus on a number of factors which form part of the consumer's booking experience including:

  1. Search results.  The CMA is interested to understand the methodology used by booking sites to determine how hotel offers are ranked and presented to consumers. In particular, the CMA will focus on whether any factors, other than the consumer's own search criteria, influence the rankings.  For example, whether factors such as the amount of commission paid to the booking site by a particular hotel will affect the order that hotel offers are displayed.
  2. Pressure selling.  Booking sites frequently use pop-up messages to create a sense of urgency in the buying process. The messages frequently refer to limited availability of rooms on chosen dates, or cite a number of other consumers that are currently viewing the same offer (and presumably about to reserve the last vacancy).  The CMA proposes to investigate the accuracy of these claims to ensure they do not give a false representation of availability or otherwise falsely pressurise a consumer into making a booking.
  3. Discount Claims.  Booking sites often claim that an offer price is benefiting from a discount compared to the regular price, but it is not always clear whether that is a fair comparison. The CMA proposes to investigate whether the regular price in such claims is real and relevant.  Was the regular price available over a significant period of time, was the regular price relevant to the consumer's current search criteria (it must match the type of room, the day of the week, etc).
  4. Hidden Charges.  The CMA will also consider to what extent the price first shown to consumers is the full and final price payable by the consumer or whether there are any hidden charges such as taxes or booking fees which are only added to the price at the check-out.

None of these commercial practices are new and nor are they specific to booking sites. It is, however, easy for unfair practices to creep into a business's way of operating, particularly if those practices are adopted by competitors in the same sector.

The CMA's investigation into booking sites is a timely reminder that all businesses with an online presence should regularly audit their sales techniques to ensure their continuing compliance with consumer laws. Now would be a perfect time for such an audit!

The closing date for submission of responses to the CMA's investigation is 15 December 2017.

https://www.gov.uk/cma-cases/online-hotel-booking#call-for-your-views

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