CMA action confirms it has travel industry in its sights

The Competition and Markets Authority (CMA) has confirmed fears it has the travel industry in its sights and is poised to exercise new powers of enforcement.

In mid-December, it ordered Hays Travel to halt the integration of recently acquired businesses Polka Dot Travel and Millington Travel. 

Then, just before Christmas, it sent letters to up to 100 operators and agencies warning of potential enforcement action if tourist taxes and in-resort fees are not included in prices shown to customers before they book.

The letters prompted Jet2holidays to notify agents this week that it is breaking down prices into what is ‘Payable to Jet2holidays’ and what is ‘Payable on arrival’, adding a link to a breakdown of fees by destination.

More: Comment: Businesses must take action now to comply with CMA guidance

Analysis: Hays just keeps on growing

It warned “the CMA now has stronger powers” and advised agents to “make sure customers are made aware of any tourist taxes or in-resort fees before the holiday is booked”.

Alan Bowen, legal advisor to the Association of Atol Companies, said: “The CMA’s view is these taxes need to be included in the price. It’s suggesting operators issue an invoice [for the payments]. But if an invoice is for more than the price the operator charges, accountants will ask, ‘Where is the rest of the money?’ It’s almost impossible to comply simply.”

He added: “A lot of smaller companies don’t have contracts with hotels, they contract with bed banks that have never asked what taxes hotels charge. It’s a nightmare. But the CMA don’t see it as a problem.”

An Abta spokesperson said: “We’re asking the CMA to give companies time to make these changes before embarking on any enforcement action, recognising that confirmation of the CMA’s approach was only given on November 18.

“Abta has guidance for members on the CMA pricing requirements. We’re providing regular updates and we continue to speak with the CMA on the matter.”

The CMA issued Initial Enforcement Orders preventing the integration of Polka Dot Travel and Millington Travel with Hays Travel on December 16, almost six weeks after the second of the acquisitions.

The businesses must continue to run separately and with “no significant changes” while the CMA decides whether one or both acquisitions could lead to a “substantial lessening of competition” in any region.

Polka Dot has 15 shops in the northwest and north Wales and Millington has 14 stores in the East Midlands.