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Travel industry news

27 Feb 2019

BY James Chapple

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Competition authority sets out terms of hotel booking site and OTA reforms

Britain’s competition watchdog has set out its proposals for stringent and wide-ranging reform of the online accommodation booking sector – and has given operators six months to clean up their act.

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Competition authority sets out terms of hotel booking site and OTA reforms

The Competition and Markets Authority (CMA) announced a sector-wide investigation into the practices employed by booking sites in October 2017.


It said it was concerned that in some instances, the accuracy and presentation of information was misleading and could prevent consumers from finding the best deal.


The CMA on Tuesday (February 26) said this investigation had identified “serious concerns” about certain “commonly used” practices throughout the sector.


Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago were among the platforms scrutinised by the CMA and have all, the CMA says, “given commitments to change their practices”.


The CMA said now online booking websites, as well as OTAs and metasearch engines, play a “significant role” in how accommodation is booked, it was vital consumers could trust them.


It has published a set of key principles by which businesses must adhere by September 1 to ensure they are compliant with consumer law.


Addressing these sites, the CMA said: “Using sales tactics such as misleading pressure selling, misleading discount claims, not disclosing the role that money your business earns plays in search result rankings, and how hidden charges can harm customers and the reputation of your industry. It also puts you at risk of breaking consumer protection law.”


Any online accommodation booking sites, including OTAs, metasearch engines, hotel groups, short-stay rentals or smaller like businesses, found in breach of the new CMA principles after September 1 could face enforcement action.


The four main pillars of the CMA’s clampdown are in respect of search rankings; reference prices; hidden charges; and pressure selling.


On search rankings, providers must clearly label and differentiate “paid for” search results and inform customers prominently whether money earned on bookings or clicks affects the order of search results.


Discounts must be presented alongside real savings on a like-for-like basis rather than with strikethrough prices or savings claims, while “was/now” discount claims must make clear the “was” price and any other factors that could affect pricing.


Sites must be “upfront” about unavoidable fees, charges and taxes and always give a total price, and ensure any additional charges are stated at an early stage of the enquiry or transaction.


Finally, sites must not use false or misleading messages about the popularity or availability or accommodation options, and ensure any phrasing tells the full story.

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