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Hotel booking sites agree to stop ‘misleading sales tactics’

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Some of the largest hotel booking sites have agreed to bring to an end a series of sales tactics that have been deemed ‘misleading’ and ‘wholly acceptable’, following an investigation by the CMA.

Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago have all made formal agreements to ‘change their ways’ after serious concerns were raised around issues such as pressure selling, misleading discount claims, the effect that commission has on how hotels are ordered on sites, and hidden charges.

The Competition and Markets Authority (CMA) took action last year, concerned that practices such as giving a false impression of a room’s popularity or not displaying the full cost of a room upfront could mislead people, stop them finding the best deal and potentially break consumer protection law.

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Now after an investigation by the CMA, the hotel booking sites have voluntarily agreed to the following:

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.

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 actually 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.

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.

“Not all firms engaged in all of the practices cited above, but all have nonetheless agreed to abide by all the principles set out in the undertakings.”

Kate Nicholls, CEO of UKHospitality, 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.”

The CMA will now monitor compliance with the commitments made by the booking sites; all changes must be in place by September 1 at the latest, though some sites have already begun making improvements.

Tags : BOOKING ENGINESCMAexpediahotelshotels.comonline travel agents
Zoe Monk

The author Zoe Monk

2 Comments

  1. When I started in the hospitality industry in the late 1970s, the normal rate of commission charged by travel agents was 8%, and one must remember that in those days, they had considerable overheads: staff, offices, telex machines, mail by post and telephones from the GPO! Commission of 8% was regarded as a reasonable amount to pay for filling unoccupied bedrooms
    The 15% plus, currently charged by the Online Travel Agents (OTAs) such as Booking.com and Expedia is nothing short of scandalous and when you consider that this is on the VAT inclusive price, hotels are also paying commission on the Government’s tax. How has it come to this?
    You have to realise that an empty, unsold hotel bedroom is that most perishable of commodities. If it is not sold on that day it is lost forever, very similar in fact to yesterday’s newspapers. With the coming of the internet, all hotels now have a website and their own online reservation systems. Booking direct with the hotel should be the normal thing to do.
    However a concerted campaign by OTA’s initially for the last minute, short notice reservation, has resulted in the creation of a multi-billion pound industry, taking a huge chunk off the bottom of the hospitality industry.
    The fact that online travel agents exist and provide a service is not the problem. It is the minimum 15% commission charged to hotels that’s the problem. Most guests are under the impression that it is a free service. It is not: and the result, is that the high rate of commission is starting to impact on the industry. 15% off of the bottom line is going to result in shabby rooms and failing businesses.
    Most hotels will gladly offer better terms if you book direct.

    1. I agree with you. The problem is that hotels don’t invest in new technologies. Their websites are outdated and not user friendly. We can’t blame the OTAs when they invest so much in their technologies and hotels expect people to waste time and energy to figure out how to book let alone some websites have a horrendous user experience.

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