Regulation

Hotel booking sites to stop ‘misleading’ tactics following CMA probe

Hotel booking websites have agreed to make “major changes” to the methods used to sell rooms following an investigation by the Competitions and Markets Authority (CMA).

Expedia, Booking.com, Agoda, Hotels.com, Ebookers and Trivago have been the subject of an investigation since December 2017 due to serious concerns around pressure selling, misleading discount claims, the effect that commission has on how hotels are ordered on sites and hidden charges.

Then in June, the CMA launched an enforcement action against the sites as it was 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.

All companies under investigation by the CMA have co-operated with its work and 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.”

The CMA will also write to other hotel booking sites including online travel agents, metasearch engines and hotel chains setting out clear expectations for how they should be complying with consumer protection law. These sites are expected to make necessary changes by 1 September.

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