If a holiday package is marketed as being all-inclusive, should the traveller expect that all meals, including lunch, are included?

In this article we look at what the regulatory authorities in the United Kingdom and in Australia require of tour operators when describing meals and other inclusions in marketing materials for all-inclusive holidays.

The National Holidays ruling (United Kingdom)

In early 2016, National Holidays (a UK Company) published a holiday brochure which stated:

Santa Susanna & Costa Brava All-Inclusive. Enjoy a nine day adventure ... WHAT'S INCLUDED? Coach travel throughout ... Six nights dinner, bed and continental breakfast at the Hotel ...

The UK advertising watchdog, the Advertising Standards Authority, was asked to rule upon whether the description "All-Inclusive" was misleading, because lunch was not included.

National Holidays argued the statement was not misleading, for these reasons:

“National Holidays said the term 'all-inclusive' was used by many holiday companies, but believed the meaning varied depending on what individual companies were offering. They believed there was no accepted definition and referred to an online dictionary description that, rather than stating that all meals needed to be included for the holiday to be considered as all-inclusive, referred to “all or most meals”.

They said their own ‘all-inclusive’ packages included more elements than the standard hotel based all-inclusive holidays. They offered travel arrangements throughout the holiday, drinks inclusive packages, entertainment, excursions and most meals, but it was not possible to include lunch because of the number of excursions and activities they included in the package. They had designed the package over a number of years based on feedback from customers, who had told them that the excursions were more important than including lunch.

National Holidays said the brochure itemised what was included in the package and lunch was not one of the meals listed. They believed that it was clear from the list what was included in the package and customers would know exactly what was available to them before they chose to book.”

The Advertising Standards Authority (ASA) did not agree, and gave these reasons:

“The ASA understood that “All-inclusive” was a widely used term to describe holiday packages or resorts where the lodging, meals, soft drinks, most alcoholic drinks and gratuities were included in the holiday price. We considered that consumers would therefore understand the claim “All-inclusive” to mean that all their meals, including lunch, would be included in the package.

We acknowledged that the holiday description stated “WHAT’S INCLUDED?” with a list of what was available in the package price. Although dinner and breakfast were the only meals mentioned, we considered that it was not sufficient to remove the overall impression or expectation created by the “All-Inclusive” headline claim that all meals would be included and therefore contradicted, rather than clarified, the claim. We concluded that, because lunch was not included, the claim “All-Inclusive” was likely to mislead consumers about the type of holiday package on offer.

Ruling: Complaint Upheld. The ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising) and 3.9 (Qualification).

Action: The ad was must not appear again in its current form. We told National Holidays not to use the claim “All-Inclusive” unless all meals were included in the holiday package.

This is the link to the ruling made on 1 March 2017: ASA Ruling on National Holidays Ltd

The Australian Consumer Law

The Australian regulator, the Australian Competition & Consumer Commission (ACCC), has been more concerned with ensuring that the travel industry uses all-inclusive pricing in its advertising and in its printed and digital marketing than with ensuring that the description of the items included in an all-inclusive holiday is not misleading.

The ACCC outlines its policy in Travel & accommodation - an industry guide to the Australian Consumer Law (published 16 August 2013). The ACCC gives this example in relation to all-inclusive pricing:

“A travel business advertises an overseas package holiday (flights and accommodation) for $1990. In fine print at the bottom, it states this price excludes airport taxes. These are known costs totalling $250, and should therefore be part of the total price.

The total price of the holiday ($2240) should have been displayed as prominently as the $1990 package price, because the total price was quantifiable.

While what is ‘prominent’ may vary on a case-by-case basis, you should consider factors such as the size, placement, colour and font of the price, as well as the background of the advertisement.”

By analogy, if a holiday is advertised as ‘all-inclusive’, then the ACCC will require that what is included (and excluded) should be prominently displayed where ‘all-inclusive’ is displayed.

The Australian Consumer Law contains consumer guarantees, including the obligation not to make false or misleading representations as to a particular standard, quality, value or grade of services supplied (section 29(1)(b)).

The test is: whether when viewed objectively and in the context of all of the circumstances, the conduct in question has misled or deceived or is likely to mislead or deceive reasonable members of the class of persons to whom the representation is made.

This is an ‘overall impression’ test, which is the same test as the ASA used in the National Holiday ruling.

Conclusions

What National Holidays failed to realise that by describing lunch and dinner as inclusions, and by failing to clarify whether or not lunch was included in the “What’s included?” list, is that they gave the misleading impression that lunch was included.

What they failed to do was to insert a qualification such as “(lunch is not included)” in the ‘WHAT’S INCLUDED?’ text or to add an asterisk and insert a disclaimer at the foot of the page that “*lunch is not included”.

In Australia, the ACCC is likely to take the same view as the ASA that the representation made was misleading, because it creates an impression that lunch might be included.

The ACCC would go one step further than simply making a ruling (as the ASA does) because of its statutory responsibility for enforcing the Australian Consumer Law. It could ask the tour operator to take corrective action; it could require the tour operator to sign a court enforceable undertaking not to mislead consumers in this way; or if it is a serious matter and involves a large company, it could issue an infringement notice or institute civil penalty proceedings in the Federal Court of Australia for the contravention.