The Competition and Markets Authority (CMA) has launched the probe because it is concerned about the “accuracy and presentation of information on sites” which could stop holidaymakers from finding the best deal and potentially break consumer law.
As part of the investigation, CMA has written to hotel booking sites to ask for more information to understand how they operate.
If the sites are found to have used “false or misleading” practices or claims that break consumer law, then CMA said it could take enforcement action.
Andrea Coscelli, chief executive of the CMA, said: “Around 70% of people who shopped around for hotels last year used these sites and they should all be confident they have chosen the best accommodation for their needs and are getting a good deal.
“In today’s increasingly busy world, sites like this offer real potential to help holidaymakers save time and money searching for their ideal getaway.
“To do this, sites need to give their customers information that is clear, accurate and presented in a way that enables people to choose the best deal for them.
“But we are concerned that this is not happening and that the information on sites may in fact be making it difficult for people to make the right choice.”
The competition watchdog is to examine issues including how hotels are ranked within search results, pressure-selling techniques such as showing how many rooms are left, as well as the sites’ discount claims and hidden charges.
Abta welcomed the CMA announcement that it will investigate the practices of the hotel booking sites.
“Abta has always advocated price transparency and the provision of accurate information for consumers so that they can make a properly informed choice when booking their travel arrangements,” said the association in a statement.
“The law requires companies to include all non-optional charges in their headline price so that customers are not hit with unexpected charges.
“Our code of conduct reflects this and it is important that the same rules apply across the industry to ensure a fair and level playing field for all travel companies.”