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‘Good news’ for hoteliers as CMA clamps down on hotel booking sites

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The Competition and Markets Authority (CMA) is launching enforcement action against a number of hotel booking sites that it believes may be breaking consumer protection law.

As part of an ongoing investigation, the CMA has identified a number of widespread concerns with how bookings websites operate and the techniques they use to encourage customers to make a purchase.

The CMA has found that many sites are breaking consumer law when it comes to search results, pressure selling, discount claims and hidden charges, and will be taking action to address these concerns.

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Enforcement activity will see the CMA secure legally binding commitments from those involved to change their business practices or, if necessary, take them to court.

Warning letters have also been sent to a range of sites, demanding they review their terms and practices to make sure they are fair and comply with consumer protection law.

It is also referring a number of concerns around online hotel booking sites’ price guarantees and other price promises to the Advertising Standards Authority (ASA).

The CMA has asked the ASA 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.

UKHospitality’s chief executive Kate Nicholls said that the announcement meant ‘good news’ for both hoteliers and consumers.

“We have been working tirelessly to highlight these practices, so are pleased to see the CMA take action.

“The CMA clearly intends to ensure that online booking sites are transparent and accurate, and that customers have complete peace of mind when booking. Extra reassurance for customers is welcome and that confidence should provide a boost for businesses.”

Tags : booking sitesCMAHoteliersINDUSTRY
Zoe Monk

The author Zoe Monk

1 Comment

  1. Let’s get this straight while OTAs commission of 8% may be acceptable 15% is far too much and 18 to 25% is extortionate. The OTAs could all drop dead tomorrow and we would all still have a business.

    Most of these giant digital technology companies are facilitators who take commission from their drivers(Uber), couriers (Deliveroo) or in our case the online travel agents.

    As middlemen they game the system with their size and financial power. They extract money from small businesses, local economies and the tax revenues of the countries in which they operate.

    How many of the people using these middlemen would be prepared to give up between 15 and 30% of their wages, salaries or sales income?

    In our industry, you have to sign up to an OTA, otherwise a large banner in red, appears on your Trip Advisor page stating that there are no rooms available at your establishment, even though there are.

    The general public believe that Trip Advisor is some kind of altruistic forum where they can play at being an amateur hotel inspector. The hospitality industry knows differently. OTA’s with their minimum 15% commission are having a serious effect upon the hotel industry.

    If you enter UK hotels on Booking.com, you are advised that there are 59963 hotels to choose from. If you multiply 59963 by the £6000 that I paid in commission to this company in in my latest financial year (ending October 2017) you get the figure of £323,778,000.

    I suspect that the actual figure, paid by all of the UK hotels, registered with booking.com is considerably higher.

    That is why Priceline Group had worldwide sales of over $10billion, and their shares are quoted at $1700 each on the Nasdaq.

    Interestingly the commission charged by tech giants Booking.Com and Expedia is on the VAT inclusive price. (Hotels are paying 15% commission on the government’s tax, a reverse sales tax perhaps). Just how much tax revenue, does the Treasury receive from these Online Travel Agents?

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