The UK competition watchdog has outlined guidance to online accommodation booking sites after identifying “serious concerns” about certain commonly used practices in the sector.
The Competition and Markets Authority revealed earlier this month that it was clamping down on misleading sales tactics.
The regulator found issue with Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago following an investigation and the six sites gave commitments to change their practices.
The CMA said: “Online accommodation booking platforms can be a very valuable source of information for people looking for hotels and other short-term accommodation. It is crucial that these platforms operate in a way which is fair and not misleading to consumers.”
The authority has now published “principles” to help businesses in the sector comply with consumer law.
“If your business is using any of the practices highlighted, you need to make changes by 1st September 2019,” the CMA warned.
“Using sales tactics like misleading pressure selling, misleading discount claims, not disclosing the role that money your business earns plays in search results’ rankings, and hidden charges can harm customers and the reputation of your industry. It also puts you at risk of breaking consumer protection law.”
The principles cover all online accommodation booking sites which offer services to UK consumers, including online travel agencies, search engines, big hotel groups and short-stay apartment rentals, as well as smaller businesses selling travel accommodation online.
All must make necessary changes by the September 1 deadline or face further action.
The principles set out by the CMA also apply to online retailers who operate in other markets where similar marketing practices are prevalent.
“They should also consider reviewing their practices to ensure compliance with the law,” the CMA added.
The guidance issued yesterday which firms must assess covers search rankings, reference prices, hidden charges and pressure selling.
Search rankings:
- prominently tell customers if the money you earn on bookings or “clicks” affects the order of results the customer sees
- clearly label ‘paid for’ search results – for example, if a hotel has paid for a pre-determined or prominent position, say so
- clearly differentiate ‘paid for’ listings with those that aren’t ‘paid for’
Reference prices:
- don’t present something as a discount – by using “strikethrough” prices or savings claims – unless the offer gives a real saving on a “like for like” basis
- if you’re making a “was/now” discount claim, make it clear what the “was” price relates to – was it for different stay dates or different occupancy?
Hidden charges:
- be upfront about unavoidable fees, charges and taxes and always give the total price
- never try to hide unavoidable costs – revealing them towards the end of a purchase can be misleading and unfair
Pressure selling:
- don’t use false or misleading messages about popularity and availability
- when making statements about availability, make sure you tell the whole story, for example ‘XX people have viewed this property in the last 30 minutes for different dates’, ‘Destination Y is XX% booked on this site for your dates’ and ‘Only X rooms left at this price on this site’
A CMA spokesperson said: “These principles include a more detailed explanation of each of the practices the CMA had concerns about, and the principles which the CMA expects online hotel booking sites to apply.
“Any business offering online accommodation booking services should review these principles, business practices are in line with consumer law.”