On 28 June 2018 the Competition and Markets Authority (“CMA”) launched enforcement action against hotel booking websites which it considered may have been breaking consumer protection law. Action was taken following concerns that these booking websites were misleading people by making rooms seem more popular than they were in reality, stopping them from finding the best deal and potentially breaking consumer protection law.
However, on 6 February 2019, the sites Booking.com, Expedia, ebookers, Hotels.com, trivago N.V. and Agoda Company Pte. Ltd provided undertakings to change their practices by 1 September 2019.
All companies have agreed to:
- make changes to their search results to make it clearer how hotels are ranked (including whether this is affected by receipt of commission)
- not to give a false impression of the availability of a hotel;
- only promote deals which are actually available (for example by not making price comparisons based on a higher rate which is not applicable to the dates the consumer is looking at); and
- display all compulsory charges such as taxes in the headline price.
The CMA will monitor compliance with these undertakings and has confirmed that it will write to other major online travel agencies, meta-search engines and hotel groups, setting out standards which are expected from them.
In light of this investigation, we provide a reminder of some of the practices which are likely to be deemed unfair, misleading or aggressive under consumer protection regulations, in the context of the the travel and tourism industry.
- Low-price promotions supported by insufficient stock: for example, offering a deluxe double room for two at a price of £59 per night (usual price £159.00 per night) using an e-mail marketing campaign sent to 5,000 customers for a hotel which has only 2 deluxe double rooms available under the promotion.
- Limited time offers which last for longer than the time advertised: for example, offering discount codes to customers making hotel bookings which are advertised as being available only for the next 2 days, but which are in fact part of an ongoing promotion intended to continue for several months.
- Advertising consumer rights as being a unique selling point of the provider’s service: for example, offering a 14 day, no obligation, free cancellation period for hotel bookings, as an exclusive benefit of the provider’s website. Website sales are usually subject to a 14 day cooling-off period for consumers under existing legislation. An ecommerce website provider is therefore legally required to offer a 14 day cancellation period in most circumstances. It has been deemed unfair to promote consumer rights obligations (which a provider is legally obliged to provide) as a sales benefit
- Providing false information or information which is untruthful or likely to deceive: For example, advertising a hotel with mutliple room types but only including photographs of the most attractive rooms and incorrectly labelling those photographs with the names of less attractive rooms.
- Omitting or hiding material information: for example, concealing that a website is affiliated with particular hotels and as such it will not offer a comprehensive list of hotel searches made by visitors to its site.
- Imparing the consumer’s freedom of choice through coercion or undue influence: for example, using website cookie data to track a consumers repeated searches for the same holiday destination, hotel or flight information and then using this information to increase the price of the same product or to falsly advertise an increased scarcity of a product or service with wording such as “hotels in this area are going fast” or “78 people have viewed this hotel in the last hour” to pressure the consumer into booking the hotel.
This recent CMA enforcement emphasises the importance of ensuring consumer practices are fair. The CMA is alert to the issue and now more than ever it is important to ensure compliance with consumer protection regulations. Steps to take in relation to this might include:
- Reviewing customer complaints and feedback to determine if they are misunderstanding parts of the website in a way which could be considered misleading;
- Reviewing privacy statements and cookie policies;
- ensuring marketing campaigns are based on legitimate offers supported by sufficient stock to reasonably reflect the likely demand for those offers; and
- avoiding the use of false statements such as stating that an offer is ‘exclusive’ when it is actually available more widely.