James Rowe: Can you really trust those bargain holiday prices when booking getaways online?
James Rowe: Hello, and welcome to Which? Shorts, your free weekly insight into Which? magazine, as well as our Money, Tech, Travel and Gardening titles, too. Today, I'm bringing you a piece that our travel expert, Trevor Baker, wrote for the September/October issue of Which? Travel, all about booking holidays online.
Finding a great deal for your next getaway can be frustrating when the prices seem to fluctuate, so how can you be sure you're getting the best price? Well, that's a question we've been wondering, too. So Trevor has been investigating some of the UK's largest holiday firms to find out what's going on with those prices. Here is Trevor's piece adapted for the podcast, this week read by me, James Rowe.
James Rowe: Have you ever been searching for holidays online, only for the price to increase? Well, you're not alone. Last year, we were browsing prices on the TUI website, looking at pictures of tempting swimming pools and luxurious hotel rooms, when we saw an extraordinary message.
"The cost of your holiday has increased," a pop-up announced immediately after it was clicked on. "We're sorry to say the price of your holiday has gone up by £722.62."
That's an astonishing amount of money. The same flights, the same transfers, the same shimmering pool view suddenly cost well over 700 quid more than it did a few seconds
before. How can that possibly be right?
"It's because this trip uses flights from a third-party airline," the pop-up went on to explain. "We receive the latest prices from the airline a few times each day, but the price might change when we come to request the actual seats. Your new total is shown in the holiday summary."
Now, the travel industry likes to call this business model dynamic pricing. That means you could pay more when demand is higher and – in theory, at least – less when demand is lower. But if it's so dynamic, why do we always stumble across prices going up and never down?
Well, this summer, we collected more than 2,000 prices from Expedia, lastminute.com, Loveholidays, On the Beach and TUI – some of the UK's largest holiday firms – to find out.
Some of the holiday prices we looked at moved very dynamically indeed. 33 out of 472 Loveholidays packages leapt in price with the click of a mouse, as did 30 out of the 466 TUI packages, some by hundreds of pounds. By coincidence, the highest price surge we found was £580 for both Loveholidays and TUI. In total, 6% of TUI holidays increased after the first page. For Loveholidays, it was 7%. If this was repeated across all bookings, it would be millions of holidays.
As this is due to dynamic pricing, you'd rightly expect that a similar number of holidays would drop in price. Well, two did. Just two holidays from more than 2,000 we looked at. Those were both from TUI. Not one of Loveholidays' prices went down.
TUI included a disclaimer that prices may update at the checkout depending on availability, but it's much smaller than the bold headline price. Loveholidays has no such disclaimer. It told us, "We make it clear that prices shown in our search results are 'from' the amount shown." But we think it's far from clear. If we do accept that prices may update, would you be happy if a trip turned out to be hundreds of pounds more expensive than it said on the advert?
Unsurprisingly, holiday firms aren't allowed to advertise holidays for the wrong price, even if it's accidental. Tesco can't put a 50p sticker on a bag of potatoes then hit you with a £1 charge at the till, nor can TUI advertise a holiday for £1,000 then try to sell it for £1,700.
None of the prices we looked at for Expedia, lastminute.com or On the Beach increased. If these companies can consistently display accurate prices, then why can't Loveholidays and TUI?
Well, here's what TUI told us: "The vast majority of prices displayed on our website remain unchanged throughout the booking process. In the examples shared with us, a significant proportion related to holidays using third-party airlines where changes in flight availability or pricing are the most likely cause of any difference between the initial search result and the final booking price." It also said that it was, quote, "continuing to make improvements aimed at reducing the likelihood of price differences appearing during the booking process."
Loveholidays told us the problem was due to trillions of package holiday combinations processed each day. It says it does its best to ensure that prices are updated, but on a small number of occasions, prices may change after the search results page. Neither addressed why prices so rarely go down if they are actually dynamic.
The argument that it's just too complicated to give people accurate prices is one we've heard before. In November last year, we reported that major holiday companies weren't including hundreds of pounds' worth of so-called resort fees in their pricing for trips to the US. These are mandatory fees that hotels in places such as Las Vegas add on after your initial payment, so that they can advertise with lower prices.
When we pointed out that a new law, the Digital Markets, Competition and Consumers Act, would make this unlawful in the UK, holiday firms stalled and told us they were waiting for the Competition and Markets Authority – the CMA – to confirm its guidance. That's despite the fact that the CMA had already explicitly used resort fees as an example of charges that would now have to be shown properly in the overall cost.
It was only when the CMA confirmed that it had been right in the first place, and after many, many emails from us, that BA Holidays, Loveholidays, On the Beach and TUI all discovered that it was possible to include all mandatory fees, as the law demands, after all.
This isn't the only time we've caught travel companies making dubious claims about their prices. A couple of years ago, booking.com, Expedia and hotels.com all had huge numbers of mobile booking discounts. They said it was cheaper to book on your phone than on a desktop. Essentially, they would give you a discount for squinting at a hotel room on your phone screen and taking a chance that it's okay. They really don't want you to go away and think about it before booking elsewhere. The only problem was that when we checked Expedia and hotels.com, in many cases, the prices were exactly the same regardless of whether you used a phone or a desktop. When we pointed this out to them, they both swiftly removed these so-called mobile discounts.
At the time, the booking.com deals we looked at were all absolutely genuine. However, when we carried out spot checks in July, three of the ten claimed savings didn't exist. One of the three was actually more expensive to book on a mobile phone than it was on a desktop. When we pointed this out, booking.com sent us a bland statement which gave no indication that it was planning to do anything about it.
Last year, we also reported hotel chains Accor, Hilton and Travelodge, as well as booking.com, after catching them claiming "from" prices for a night's stay that simply weren't real or almost impossible to attain. The Advertising Standards Authority – the ASA – followed up on our research with its own and ruled against them all.
Increasingly, we're reporting travel firms to regulators because they refuse to do the right thing voluntarily. We recently convinced the CMA to launch an investigation into Ryanair charging parents to sit next to their children. The airline immediately folded and scrapped its unfair fees. We also complained to the ASA about EasyJet's ridiculous claim that you could take a large cabin bag on board from £5.99. Our research didn't find any flights where you could take a bag on board for less than 20 quid. We won again, although the airline just changed its website to say that cabin bag prices vary.
Now, back to that £722 TUI price jump from earlier. Well, we reported that to the ASA, too. In January, it agreed with us that the claim was misleading, ruling against the holiday giant. Following our latest research, we'll ask the ASA to investigate why the same problems are still happening a year after our complaint. While we wait for its ruling and for all regulators to get their act together, we'll carry on fighting for travel rights in any way we can.
James Rowe: That brings to an end another podcast from Which?. There's loads more for you to read about everything we discussed today – just head to the episode description for more useful everyday advice. There you'll also find an exclusive offer for podcast listeners like you to become a Which? member for 50% off the usual price, giving you access to our product reviews, our app, one-to-one personalised buying advice, and every issue of Which? magazine across the year. Plus, your membership helps us to make life simpler, fairer and safer for everyone.
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