Thursday, 7 February 2019

More transparency on hotel booking websites?

The UK's Competition & Markets Authority (CMA) announced yesterday that it has finalised its investigation into commercial practices of hotel booking websites (Hotel booking sites to make major changes after CMA probe). Under investigation were such well-known online companies as: Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago. Concerns that were raised and had been investigated pertained to a possibility of pressure selling, misleading discount claims, hidden charges and a suspicion that commission that these websites receive may impact the order, in which hotels are being shown on their websites. Overall, various online commercial practices might have misled consumers to believe that a certain hotel accommodation was either more popular or cheaper than the reality warranted. It was, therefore, questioned whether these companies might have been infringing the Consumer Protection from Unfair Trading Regulations 2008, which implemented the Unfair Commercial Practices Directive in the UK.

Since all of the above-mentioned companies co-operated with the CMA and agreed to voluntary undertakings, this means that the CMA did not proceed with its findings of any breaches of consumer law. Instead, the voluntary undertaking taken by these companies signifies their commitment to ensure in the future that certain principles will be observed, without admitting any fault in past dealings. All the promised changes should be made before 1 September 2019 and the CMA will expect these actions to be taken also by other websites in the same sector, who were not under investigation at the moment. The agreed on principles are as follows:
  • search results: clarifying whether the order of results is influenced by the amount of commission a hotel pays to the website;
  • pressure selling: currently, when using hotel booking websites, we often see information that other consumers are looking at the same hotel as we are and that there is only 1 room left, as well as showing us hotel accommodation that has already been sold out. This tactic may pressure consumers to rush with making a transactional choice, creating a scarcity condition. It can additionally be misleading, if other consumers are looking at the same hotel indeed but at renting rooms in it on other dates. This practice should now cease;
  • discount claims: ensuring that all discount claims are based on non-misleading criteria and are actually available. This prevents hotel booking websites from offering 'discounts' based on comparing the offered price for a given room to the price of a more luxurious room in the same accommodation, or to a price for the same room but in high season;
  • hidden charges: showing all compulsory charges up front, incl. taxes and fees.
The question remains whether we can expect these hotel booking websites to change their online practices more generally, not just for the UK consumers. This is something to pay attention to and re-check after September 2019.

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