The Competition and Markets Authority (CMA) introduced some new principles last month for any business offering online accommodation booking services, such as booking platforms, price comparison websites, online travel agents (OTAs) and hotel websites. However, a recent spot check by Which? magazine alleged that not all hotel booking platforms were complying with the new principles, despite being given six months in which to change their practices.
The investigation into the selling practices of the UK’s largest online hotel booking platforms and comparison sites, including the likes of Booking.com, goes as far back as 2017 when the CMA first starting looking in to the issue. It was concerned about, amongst other things, so-called “pressure-selling” techniques such as potentially misleading statements about the popularity or availability of certain rooms, as well as a lack of clarity around what the customer would ultimately pay for the room. They considered many of these practices to breach the Consumer Protection from Unfair Trading Regulations 20018 (CPUT).
In February, the CMA introduced a number of principles which came into effect on the 1st September 2019, and which all online hotel booking platforms must comply with:
- Search results: it must be explained to customers to what extent their search results are influenced by factors that may not be relevant to the customer’s requirements, such as the amount of commission a hotel pays the booking platform. This explanation must be in clear and prominent static text, presented to the customer at some point during the search process. Any paid-for listings shown in the search results must be clearly and prominently labelled as such, and differentiated from other listings.
- Hidden charges: the price shown must be the total cost to the customer, including compulsory fees, charges and taxes that are reasonably calculable in advance (such as city tax and resort fees). Charges are compulsory if customers cannot avoid them. Where elements of the total price are calculable in a foreign currency, the approximate total must be calculated and included in the total price. An explanation of how the amount has been calculated (e.g. the currency exchange rate used) must be provided no later than the stage at which the consumer will complete their booking.
- Pressure selling: any statements made on the website about the popularity and availability of certain rooms, such as claims about how many people are looking at the same room, how many rooms may be left, or how long a price is available for, should be there to inform the customer – it should be not be used to create a false impression of room availability or rush customers into making a booking decision. Statements about popularity and availability must: (a) be clear; (b) disclose the assumptions, limitations and qualifications that are relevant to the statement; and (c) be substantiated by the hotel booking website’s data.
- Reference Pricing: all price comparisons must be made on a like for like basis, or where there is a difference between the prices being compared, such differences should be communicated clearly to the customer and there should be no indication that the price comparison signifies a price discount. Where a comparison is made on a like for like basis, any indication of a price discount must represent a genuine saving for consumers.
It's worth mentioning that although these principles are targeted at hotel booking platforms, they can apply to any online booking platform using these selling practices. Therefore, the scope of these principles is far wider than just the hotel booking sector and could apply to many online marketplaces and booking platforms.
If you've not reviewed your sales practices in light of the new principles, then you need to do so - and quickly. A failure to comply with the principles (or otherwise engage in misleading or unfair sales practices) may place you in breach of the CPUT, leaving you vulnerable to costly, damaging and public enforcement proceedings by the CMA.
Farina Azam is a partner and the travel lead at Kemp Little, specialising in regulatory advice and commercial and consumer contracts for the travel industry. Her clients include tour operators, airlines, online travel agents and hotels. She’s very experienced in advising on the regulatory implications of selling package holidays and flights, as well as customer terms and conditions and a range of commercial contracts. If you have any questions or require any further assistance please contact her on email@example.com or 020 7710 1646.
Which? carried out spot checks on six leading hotel booking websites, which were ordered to make changes earlier this year.