Hotel Booking Sites Targeted by Competition Enforcement
July 9, 2018
Since 27 October 2017 – when an investigation was opened – the Competition and Markets Authority (CMA) has been monitoring online hotel booking sites following concerns that such sites may breach consumer legislation, notably the Consumer Protection from Unfair Trading Regulations 2008, and Part 2 of the Consumer Rights Act 2015. On 28 June 2018 the CMA announced that it is launching enforcement action against a number of websites.
Among the potential breaches identified by the CMA is the extent to which search results may be influenced by the amount of commission that a hotel pays to the respective website, which can have a detrimental effect on consumer choice. In addition, the CMA has identified pressure selling as another area of concern. The CMA describes pressure selling as “[creating] a false impression of room availability” or “[rushing] customers into making a booking decision”. The CMA also sets out to scrutinise the discount claims which many sites make, specifically whether the discount claims offer a fair comparison based on genuine and comparable room pricing. Finally, the CMA has also identified the issue of potential hidden costs, which means that the prices initially shown to customers may be lower than the grand total presented once the customer has reserved a holiday.
The CMA has additionally consulted the Advertising Standards Authority (ASA) to determine whether sites may be misleading customers by using phrases such as “best price guaranteed” or “lowest price”. The CMA plans to address the above concerns by “securing legally binding commitments” from the particular websites found to have committed breaches or, if necessary, take them to court.