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Watchdog takes enforcement action against hotel booking sites

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Written by: Paloma Kubiak
28/06/2018
The competition watchdog has launched enforcement action against several hotel booking sites following concerns over pressure selling and fair discount claims.

An investigation of online hotel booking sites was launched in October by the Competition and Markets Authority (CMA) to see if customers are really getting the best deal.

But now the CMA is launching enforcement action against a number of unnamed hotel booking sites that it believes may be breaking the law.

Its concerns centre around:

  • Search results: how hotels are ranked, to what extent search results may be influenced by the amount of commission a hotel pays the site, for example.
  • Pressure selling: whether claims about how many people are looking at the same room, how many rooms may be left, or how long a price is available, create a false impression of room availability or rush customers into making a booking decision.
  • Discount claims: whether discount claims offer a fair comparison for customers. For example, the claim could be based on a higher price that was only available for a brief period or not relevant to the customer’s search criteria, such as comparing a higher weekend room rate with the weekday rate.
  • Hidden charges: the extent to which sites include all costs in the price they first show customers or whether people are later faced with unexpected fees, such as taxes or booking fees.

These sites have now received warning letters from the CMA demanding they review their terms and practices to ensure they’re fair and comply with consumer protection law.

If the sites don’t comply, the CMA can take them to court where they will be ordered to make changes in the interest of consumer protection and where sites break the court order, a fine can be imposed.

The CMA is also referring concerns around price guarantees to the Advertising Standards Authority to consider whether statements like ‘best price guarantee’ or ‘lowest price’ mislead customers and what conditions must be met for companies to make such claims.

Andrea Coscelli, chief executive of the CMA, said: “Booking sites can make it so much easier to choose your holiday, but only if people are able to trust them. Holidaymakers must feel sure they’re getting the deal they expected, whether that’s securing the discount promised or receiving reliable information about availability of rooms. It’s also important that no one feels pressured by misleading statements into making a booking.

“That’s why we’re now demanding that sites think again about how they’re presenting information to their customers and make sure they’re complying with the law. Our next step is to take any necessary action – including through the courts if needed – to ensure people get a fair deal.”

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