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Hotel booking sites agree to halt ‘unacceptable’ practices after CMA probe

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Hotel booking sites agree to halt ‘unacceptable’ practices after CMA probe

Some of the biggest online hotel booking sites, including Expedia, Booking.com and Trivago, have been the subject of enforcement action due to serious concerns around pressure selling, misleading discount claims and hidden charges.

The Competition and Markets Authority (CMA) launched an investigation into the accuracy and transparency of hotel booking sites in 2017 and took enforcement action last year. All companies under investigation have voluntarily agreed to the following, with any required changes being made by 1 September 2019:

Search results

Making it clearer how hotels are ranked after a customer has entered their search requirements, for example telling people when search results have been affected by the amount of commission a hotel pays the site.

Pressure selling

Not giving a false impression of the availability or popularity of a hotel or rushing customers into making a booking decision based on incomplete information. For example, when highlighting that other customers are looking at the same hotel as you, making it clear they may be searching for different dates.

The CMA also saw examples of some sites strategically placing sold out hotels within search results to put pressure on people to book more quickly. Sites have now committed not to do this.

Discount claims

Being clearer about discounts and only promoting deals that are available at that time. Examples of misleading discount claims may include comparisons with a higher price that was not relevant to the customer’s search criteria. For example, some sites were comparing a higher weekend room rate with a weekday rate or comparing the price of a luxury suite with a standard room.

Hidden charges

Displaying all compulsory charges such as taxes, booking or resort fees in the headline price. Sites can still break that price down, but the total amount the customer has to pay should always be shown upfront.

CMA chairman Andrew Tyrie said: “The CMA has taken enforcement action to bring to an end misleading sales tactics, hidden charges and other practices in the online hotel booking market. These have been wholly unacceptable.

“Six websites have already given firm undertakings not to engage in these practices. They are some of the largest hotel booking sites. The CMA will now do whatever it can to ensure that the rest of the sector meets the same standards.”

Kate Nicholls, CEO of UKHospitality, has welcomed the action. She said: “Action to provide transparency, clarity and fairness around online booking platforms will provide a fairer playing field, which can only be a good thing. Customers booking online have for too long been unwittingly misinformed and they deserve better.

“The CMA’s recommendations will simultaneously add a level of protection for accommodation businesses who have too often lost out via unfair practices.”

A spokesperson from the Expedia Group said: “We gave commitments to the CMA on a voluntary basis and the CMA in turn closed its investigation in respect of the Expedia Group with no admission or finding of liability.

“We continue to believe our practices did not breach any consumer laws. That said, we are surprised and disappointed in the CMA’s description of our partnership with them in the CMA’s press announcement, which we believe mischaracterizes the collaborative and good faith approach taken in establishing industry standards which are new and result in more transparency for consumers than in offline markets. We are however pleased the CMA has been clear that it views this new standard as one applicable to all participants in the industry, whether online travel agents, search engines and metasearch sites or the direct sites of accommodation providers.

“As we always look for better ways to serve our customers and the broader travel community, we are proud to have been part of this new industry standard which supports UK customers with their online booking journey.”

Government watchdog launches enforcement action against hotel booking websites >>

Hotel booking sites will work with competition watchdog’s investigation >>

Competition watchdog to investigate online booking sites >>

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