Hotels are routinely breaching government guidelines and advertising standards rules by not including VAT in headline prices online.
A Which? Travel investigation found that 11 out of 24 hotel chains included hotels that did not initially include VAT in their web prices.
This breaches Department for Business Innovation and Skills guidance, which states that all prices given to consumers should include VAT and the total price must be displayed ‘prominently’.
Hotel web prices
When we looked at hotel chains’ websites in July we found properties displaying initial prices that excluded VAT. They did not make it clear that the real price was 20% higher until a later stage in the online booking process.
We found properties in the following chains that did not include VAT in the headline price; Crowne Plaza, Doubletree by Hilton, Guoman, Hilton, Holiday Inn, Malmaison, Marriott, Mercure, Radisson Blu, Sofitel, and Thistle.
Some did not include VAT until the payment page. For instance, Hilton and Doubletree added it at stage four of a five stage booking process. From stage two, details were available but hidden in a ‘rate details’ pop-up box.
Hotel price rules
We investigated the hotels after the Advertising Standards Authority upheld a complaint that VAT-exclusive prices on the websites of Intercontinental Hotels Group (IHG) and its subsidiary Crowne Plaza were misleading and breached the ASA code.
The ASA has started a compliance action to get the whole UK hotel sector to fall into line with its code.
VAT and hotel prices
Trading Standards experts warn that hotels not including VAT in headline prices are potentially breaching the Consumer Protection from Unfair Trading Regulations.
Martin Fisher, of the Trading Standards Institute, said that, to be sure of staying on the right side of the law, businesses should not quote VAT-exclusive prices in any dealings with consumers.
Price should include VAT
A Which? spokesperson said: “Our research shows that many hotels are breaking the regulations by only revealing the 20% charge later in the online booking process.
“We want hotels to adhere to the rules and be up front about the total cost of booking a room by including VAT in the headline price.”