CMA Guidance on Online Accommodation Pricing

The Competition and Markets Authority has identified serious concerns about certain practices commonly used in the online accommodation booking sector after an investigation into Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago who have given commitments to change their practices.

Following this investigation the CMA published principles to help businesses comply with consumer law. If a business is using any of the practices highlighted, they need to make changes by 1st September 2019. The CMA has set out expectations on what businesses should and shouldn’t do below.

Why consumer law compliance matters

Using sales tactics like misleading pressure selling, misleading discount claims, not disclosing the role that money a business earns plays in search results’ rankings, and hidden charges can harm customers and the reputation of the industry. It also puts businesses at risk of breaking consumer protection law.

Who these principles apply to

• All online accommodation booking sites which offer services to UK consumers, including online travel agencies, search engines, big hotel groups and short-stay apartment rentals, as well as smaller businesses selling travel accommodation online, should make necessary changes by 1 September 2019
• Online retailers who operate in other markets where similar marketing practices are prevalent should also consider reviewing their practices to ensure compliance with the law

Sales practices businesses must assess:

Search rankings

• Prominently tell customers if the money earned on bookings or “clicks” affects the order of results the customer sees
• Clearly label ‘paid for’ search results – for example, if a hotel has paid for a pre-determined or prominent position, say so
• Clearly differentiate ‘paid for’ listings with those that aren’t ‘paid for’

Reference prices

• Don’t present something as a discount – by using “strikethrough” prices or savings claims – unless the offer gives a real saving on a “like for like” basis
• If you’re making a “was/now” discount claim, make it clear what the “was” price relates to – was it for different stay dates or different occupancy?

Hidden charges

• Be upfront about unavoidable fees, charges and taxes and always give the total price
• Never try to hide unavoidable costs – revealing them towards the end of a purchase can be misleading and unfair

Pressure selling

• Don’t use false or misleading messages about popularity and availability
• When making statements about availability, make sure to tell the whole story, for example ‘XX people have viewed this property in the last 30 minutes for different dates’, ‘Destination Y is XX% booked on this site for your dates’ and ‘Only X rooms left at this price on this site’
• Businesses in the online accommodation booking sector must be fully compliant with the principles and consumer protection law by 1 September 2019.

Those who aren’t risk facing CMA enforcement action, which could lead to the CMA seeking a court order.

[Source: CMA, 26 February 2019]