Sign up to newsletter

Magazine subscription

CMA takes aim at hotel booking sites

The CMA is investigating hotel booking sites

The Competition and Markets Authority (CMA) has taken enforcement action against popular hotel booking sites over “serious concerns” about several transparency issues.

Expedia, Booking.com, Agoda, Hotels.com, Ebookers and Trivago were all part of a CMA probe into pressure selling, misleading discount claims, the effect that commission has on how hotels are ordered on sites and hidden charges.

The CMA originally raised the issues in 2018 because it was concerned that practices such as giving a false impression of room popularity or not displaying the full cost of a room upfront were misleading, could stop them from finding the best deal and potentially broke consumer protection law.

All of the sites under investigation worked with the CMA, according to the watchdog, and agreed to make major changes to the way hotels are listed and sold, including:

  • Making it clearer how hotels are ranked in search results, such as displaying when the results are affected by the amount of commission the property pays the site.
  • Not giving a false impression of the availability or popularity of a hotel or rushing customers into making decisions based on incomplete information. For example, making it clear that another customer looking at the same hotel might be looking at different dates. The CMA says it also witnessed sites strategically placing sold-out hotels within search results to put pressure on customers to book; all sites have agreed to stop doing this.
  • Making discounts clearer and only promoting deals that are available during the dates that customers are searching for. The CMA says it found examples of comparisons with higher prices that were not relevant to the customer’s search criteria, such as comparing a higher weekend rate with a weekday price or contrasting the price of a luxury suite with that of a standard room.
  • Displaying all compulsory charges such as taxes and booking or resort fees in the headline price. Although the sites will continue to be able to break the price down before booking, customers must know the full price of the room upfront.

The CMA states that not all of the sites involved in the investigation participated in these practices, but all of them have nonetheless agreed to make changes to abide by these new principles.

All of the sites now have until 1 September 2019 to make these changes, with the CMA monitoring progress and compliance throughout the process.

The watchdog will also write to other hotel booking sites including online travel agents, metasearch engines and hotel chains requesting they make similar changes by the deadline or face potential enforcement action.

Andrew Tyrie, chairman of the CMA, said: “The CMA has taken enforcement action to end misleading sale 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.”

Commenting on the CMA's announcement, a spokesman for Expedia Group – which also owns Hotels.com and Ebookers – reiterated its cooperation with the investigation and said it has always committed to “putting travel data and details in the hands of consumers, knocking down barriers to searching, planning and booking, all with the best interests of consumers in mind”.

The spokesperson said: “We gave commitments to the CMA on a voluntary basis and the CMA in turn closed its investigation in respect of the Expedia Group with no admission or finding of liability. We continue to believe our practices did not breach any consumer laws.

“That said, we are surprised and disappointed in the CMA’s description of our partnership with them in the CMA’s press announcement, which we believe mischaracterises the collaborative and good faith approach taken in establishing industry standards which are new and result in more transparency for consumers than in offline markets. We are, however, pleased the CMA has been clear that it views this new standard as one applicable to all participants in the industry, whether online travel agents, search engines and metasearch sites or the direct sits of accommodation providers.”

Add new comment