ASA ruling on Thomas Cook
A website for Thomas Cook, www.thomascook.com, seen on 24 November 2017, advertised a 14-night, all-inclusive holiday at the Melia Cayo Guillermo in Cuba departing the UK on 13 May 2018.
Text stated “Total price was £2,736.00 [crossed through] – Saving today (13%) -£350 – Total price £2,386.00”. The complainant, who had monitored the price for several months, challenged whether the savings claim against the “was” price was misleading and could be substantiated.
Thomas Cook Retail Ltd said the savings claim was made in relation to the launch price of the holiday. They said a holiday went on sale up to 18 months in advance of departure, with a launch price calculated from the different components that made up the holiday package, plus other business costs and anticipated profit from the sale of the holiday. They said a number of factors then influenced the selling price of the holiday, such as promotional offers from their suppliers, exchange rate variations and customer demand. The selling price would then fluctuate after the initial launch in response to those factors through a process of manual and automated changes.
Thomas Cook said that, in the case of the particular holiday the complainant had been monitoring, a launch price of £1,375 per person had been set across a range of combinations for the holiday for departures between 13 December 2016 and 11 January 2017. No bookings were taken for the holiday at the launch price, which Thomas Cook believed was not unusual or surprising, given that the departure date was 17 months away at the time and that a large number of other variables (departure dates, room types, length of stay, etc.) were possible. Thomas Cook believed that the absence of a booking at the launch price should not be interpreted to mean that the launch price was not a genuine, retail price. They said they were nevertheless willing to consider how they could make changes so that the pricing basis of holidays would be clearer to consumers.
The complaint was upheld. The ASA considered consumers were generally aware that holiday pricing was fluid and that some variation in price might occur for that type of product, but that consumers would understand the savings claim against the “was” price to mean that by purchasing the holiday at the lower price shown in the ad the consumer would be making a genuine, meaningful saving against a price that had actually been charged. The ASA also considered that the phrase “Saving today” suggested the lower price was time limited. In combination with the higher “was” price, the ASA considered consumers were likely to expect that if the price changed the following day it was more likely to increase than to decrease, which put pressure on them to make a decision more quickly than they might otherwise have done.
The ASA noted that there was no explanation in the ad that the savings claim was made against the launch price of the holiday. However, even if an explanation had appeared, the ASA considered it was unlikely to have any meaning for consumers unless it was a genuine price that had actually been charged, and Thomas Cook had already told us that no bookings had been taken for the holiday at the launch price.
Because the ASA considered consumers would understand the savings claim to be based on a genuine price for the holiday that had actually been charged, but Thomas Cook had said that was not the case, the ASA concluded that the savings claim had not been substantiated and was misleading.
[Source: ASA, May 2018]