Abta warns of ‘potentially serious consequences’ if new pricing rules ignored

Abta has urged members to consult its updated advice on Competition and Markets Authority (CMA) requirements that all unavoidable fees and taxes payable in destination be included in total prices, as the deadline for compliance approaches.

The CMA first issued guidance on the new rules for travel sellers on November 18 but almost immediately sent out letters warning businesses had three months to comply or risk enforcement action.

Abta noted it has issued “numerous notifications and advice” to members since warning of “potentially extremely serious consequences” if companies “have not taken appropriate steps”. It also reiterated that the new rules apply to travel agents as well as tour operators.

It warned: “The CMA has made clear it will take enforcement action against any company that does not include unavoidable fees and charges payable on arrival or departure at hotels, ports or airports.”

Abta today (Tuesday) pointed out that it has made the CMA aware that "in most cases" agents will be selling a product with the price set by a tour operator or supplier. 

The CMA said it would take this into account but that agents must do all they can to make sure the prices they are advertising or providing are total prices, including all extras, according to the travel association. 

Abta senior solicitor Paula Macfarlane told Travel Weekly: “Many of our members are taking steps to comply with the CMA guidance. It’s extremely important everyone takes the time to review their pricing to ensure they aren’t potentially in breach.”

She said Abta’s latest guidance “summarises the issue and pulls together our guidance to date”, noting: “We continue to receive queries as members work on changing price displays and we’ve asked for clarification [from the CMA] on a couple of areas.”

Abta has sought clarification on issues including how a price breakdown may be displayed and what a ‘reasonably indicative’ exchange rate means.

Travel sellers are advised to show customers a ‘total price’ with the amount to ‘pay now’ and amount to ‘pay at the property’, together with an explanatory note that the total price “includes approximately £xx (€xx) tax to be paid at the property” with the exchange rate this is based on – noting that both local taxes and the exchange rate could change before payment becomes due.

Alan Bowen, legal advisor to the Association of Atol Companies, described implementing the changes as “a challenge”, saying: “If selling online, you need to change virtually every page of your booking system and change your booking conditions. It means hours of work for small operators when this is the busiest time of year.”

He suggested: “It’s not going to be all finished in three months.”

Abta said businesses “should comply as soon as they can” and reminded agents that all travel companies must obey the guidance.

Macfarlane said: “Although in relation to package holiday sales, the main responsibility will remain with tour operators to ensure that they are compliant, agents should also take steps to ensure that whatever they are offering to customers, the price includes unavoidable taxes and fees payable on arrival or departure at hotels, ports or airports.

 “The CMA guidance contains some examples that are relevant to travel agents such as how to include local taxes in an advert for accommodation only. Abta members can also access Abta’s guidance on this important issue on our website.”