Sites need to give their customers information that is clear, accurate and presented in a way that enables people to choose the best deal for them.
The Competition and Markets Authority (“CMA”) has stated that it is concerned about the clarity, accuracy and presentation of information on hotel booking sites, which could mislead people, stop them finding the best deal and potentially break consumer law.
Andrea Coscelli, Chief Executive of the CMA, stated that:
“Around 70% of people who shopped around for hotels last year used these sites and they should all be confident they have chosen the best accommodation for their needs and are getting a good deal.
To do this, sites need to give their customers information that is clear, accurate and presented in a way that enables people to choose the best deal for them. But we are concerned that this is not happening and that the information on sites may in fact be making it difficult for people to make the right choice.”
The CMA wrote to companies across the whole sector on 27 October 2017 to request information about their current practices. The investigation aims to determine whether customers really are able to choose the best hotel deal from online booking sites.
Individuals that use online booking sites and hotels that advertise with them were also called upon by the regulator to submit their views in order to share experiences which could be relevant to the investigation.
Several areas of online practice are being examined and include:
- Search results – the method such sites use to rank hotels once a customer has entered their search requirements. This includes the extent to which results are influenced by other factors that may be less relevant to the customer’s requirements, such as the amount of commission a hotel pays to 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.
- 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.
The CMA may invoke several routes of enforcement if it discovers that businesses have breached consumer protection law. These include:
- naming and shaming;
- civil enforcement orders or injunctions requiring online booking sites to stop using unfair terms or to change the way in which they operate; and
- prosecution through the criminal courts for the most unfair commercial practices.
The investigation has now closed and the next update is due to be published in spring 2018. At the time of writing it remains to be seen what the regulator will do in light of the results. For those operating in this sector, and those in any consumer-facing industry, it is worthwhile remembering that consumers are heavily protected by the law and that there is a general obligation on businesses to ensure that they are transparent in their day to day practices when dealing with consumers.