Hotel booking sites are being advised by the UK’s competition watchdog to review the way in which they rank and display rooms online…
Some hotel sites have recently been accused of making misleading claims about discounts, the Competition and Markets Authority (CMA) said in a report by the BBC.
The organisation is examining whether or not the sites are giving a false impression of room availability and “rushing” customers into booking decisions, while also looking into the extent to which a hotel’s ranking may be influenced by the size of the commission it pays.
The names of the companies that the CMA is investigating have not yet been released, but leading booking sites include Expedia and Booking.com.
The CMA, which launched its investigation into online booking sites in October, says it has sent warning letters to “a range of sites”, demanding they review their practices to make sure they are fair and comply with consumer protection law.
Its investigation is examining several practices, including:
- Search results: how hotels are ranked after a customer has entered their search requirements, for example to what extent search results are influenced by other factors that may be less relevant to the customer’s requirements, such as the amount of commission a hotel pays the site.
- Pressure selling: whether claims about how many people are looking at the same room, how many rooms may be left, or how long a price is available, create a false impression of room availability or rush customers into making a booking decision.
- Discount claims: whether the discount claims made on sites offer a fair comparison for customers – for example, the claim could be based on a higher price that was only available for a brief period, or not relevant to the customer’s search criteria, for example comparing a higher weekend room rate with the weekday rate for which the customer has searched.
- Hidden charges: the extent to which sites include all costs in the price they first show customers or whether people are later faced with unexpected fees, such as taxes or booking fees.
According to the CMA, around 70 per cent of consumers who shop around for accommodation use hotel booking sites.
Speaking to the BBC, Andrea Coscelli, chief executive of the CMA, said: “Booking sites can make it so much easier to choose your holiday, but only if people are able to trust them. We are now demanding that sites think again about how they are presenting information to their customers and make sure they are complying with the law. Our next step is to take any necessary action – including through the courts if needed – to ensure people get a fair deal.”
The watchdog has been in contact with a number of sites asking them to review their practices, and to respond within the next few months.
At the end of the review, the sites can either give a legally-binding commitment to change the way they operate, or argue their case that their practices do not break the law.
If the CMA disagrees with their arguments, it can take the companies to court, where unlimited fines can be levied.