Abta aims to prevent the Competition and Markets Authority (CMA) “doing anything daft” in enforcing guidance on holiday pricing from April.
The CMA gains new powers to decide on breaches of consumer law and to impose penalties next month.
However, Abta director of legal affairs Simon Bunce expressed concern at CMA draft guidance on ‘drip pricing’ and ‘dynamic pricing’ when he addressed the Abta Travel Finance Conference, saying: “We don’t want the CMA doing anything daft on this. We’re keeping an eye on it.”
The CMA consulted in December on draft guidance on unfair commercial practices under the Digital Markets, Competition and Consumers Act (DMCC) 2024 which came partially into effect in January. This added publishing fake reviews and ‘drip pricing’ to a list of banned business practices.
The guidance specified: “The practice of showing consumers an initial headline price . . . and subsequently introducing additional mandatory charges – sometimes called ‘drip pricing’ – is prohibited.
“Such mandatory charges include . . . local taxes and other fees payable on arrival at hotels or on departure at an airport.”
Bunce noted: “Prices have to be accurate and not misleading.” But he argued: “Local taxes and charges payable at the airport or at the hotel have never been included in prices. They are not something travel organisers have any control over.”
He said it’s “not something customers are complaining about” and added: “We’ve pushed back against this.”
Bunce noted the CMA has also “launched a project looking at wider aspects of ‘dynamic pricing’, including in travel and tourism” after examining concert ticket sales over surge pricing for Oasis tickets.
He said Abta had asked the CMA what it meant by ‘dynamic pricing’, saying: “Is it prices changing or ‘surge pricing’, because that is not what happens in travel.”
Bunce argued: “Travel is very good at yield management, so airlines don’t have empty seats or hotels empty beds. [But] that is very different to the Oasis tickets scenario.”
The CMA issued an update last week promising “a phased approach to guidance on this” following “substantive feedback”, with “a further consultation on revised draft guidance” this summer on aspects of the drip pricing guidance “that have created more uncertainty”.
The consumer protection aspects of the DMCC come into force on April 6.