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Crack down on ‘misleading’ hotel prices

Action on inaccurate 'discount' deals and pressure selling tactics from hotel price comparison sites.

Crack down on ‘misleading’ hotel prices

The Competition and Markets Authority (CMA) has launched an investigation into dodgy deals on hotel booking sites.

It announced today that some sites are providing information which could ‘mislead people, stop them finding the best deal and potentially break consumer law’.

Its investigation into the clarity, accuracy and presentation of information on sites will examine several practices including how hotels are ranked in search results, pressure selling, discount claims and hidden charges.

It follows a year-long market study and draws on the results of Which? Travel’s September 2016 investigation into the same issues, ‘The Price is Wrong’.

Alex Neil, Which? managing director of home products and services, said: ‘When shopping around to book a hotel, it’s vital that consumers are confident that they can find the best deal for them.

‘We found evidence of booking sites using pressure-selling tactics and making claims about discount deals that don’t add up. If the CMA finds breaches of consumer law, they should take enforcement action against those sites.’

Which? Travel’s investigation – hotel booking sites

Which? Travel looked at deals on three of the biggest sites, Booking.com, Expedia and Hotels.com, finding evidence of misleadingly displayed ‘savings’, which were passed on to the CMA.

Expedia offered ‘discounts’ based on flights and hotels booked together, which turned out to be wildly inaccurate and based on prices obtained between September 2013 and September 2014.

Hotels.com provided no explanation for its ‘savings’ calculations, potentially a breach of Consumer Law. Legally a ‘sale’ price has to be a reduction from an original price that’s been displayed for a substantial period of time, usually 28 days or, if not, a clear explanation has to be provided.

Booking.com offered a lengthy explanation for what it means when a price is crossed out and another, apparently ‘discounted’ lower price is shown alongside it. Its explanation appeared to suggest that the higher price could simply be that of an earlier, more popular date such as a weekend.

When Which? Travel put these allegations to the three sites in August 2016, they did respond.

Hotels.com said that it intended to clarify the basis for its struck-out ‘sale’ comparison prices and it has since added a brief explanation (‘the struck-out price is based on the hotel’s standard rate, as determined and supplied by the hotel’).

Expedia told Which? that it was ‘looking to see how we can improve messaging to customers’. It did change the calculation of its flight + hotel discounts, which is now based on prices obtained from July 2015 to June 2016.

Booking.com didn’t offer to make any changes, but did insist that its own lengthy explanation of ‘discounts’, still on the site today, provides ‘the utmost in clarity’.

‘The discount is based on the third highest current price of the property for rooms with the same booking conditions in a 30-day window around your check-in date (15 days before and 15 days after check-in date; if less than 15 days are between today and the check-in date,  we will use the corresponding number of days after the check-in date to result in a 30 day total).’

CMA Enforcement action

The CMA’s investigation goes beyond these three sites to look at the whole industry and will examine several areas that Which? Travel investigated, including pressure selling, hidden charges and whether discount claims offer a fair comparison for the consumer. It will also look at whether search results are influenced by commission paid by the hotel.

Among other things it will be investigate whether claims such as ‘3 rooms left!’ or ‘203 people are looking at hotels in your destination’ create a ‘false impression of room availability or rush customers into making a booking decision.’

It will also consider whether consumers are being presented with unexpected fees, such as taxes or booking charges.

It has said that if it does find sites’ practices or claims are ‘false or misleading and are breaking consumer law’, it could take enforcement action.

Which? Travel is currently investigating pressure selling tactics, for the January issue and will be taking another look at dodgy discounts in the future.

The CMA has asked consumers to share your experiences on using hotel booking sites.

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