Watchdog Cracks Down on Holiday Comparison Sites

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Watchdog Cracks Down on Holiday Comparison Sites

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By Trevor Clawson

With the summer holiday season now underway, those who haven’t as yet booked a week or two in the sun may well be checking out low cost airlines and hotel comparison sites to find the perfect combination of price, quality and destination.

And on the face of it, finding a bargain hotel has never been easier. You simply log onto one of the numerous booking sites, key in a destination along with time period and, hey presto, the smart software will pull up a list of suitable rooms. Helpfully, the software may also let you know if anyone else is looking at a particular room. No pressure, you understand. Just an extra piece of information to let you know that it might be a good idea to secure the booking before someone else does. According to UK consumer law regulator, the  Competition and Markets Authority (CMA), around 70% of those who book hotels independently use booking engines and comparison sites. Leading players include Hotel.com, Booking.com, Expedia and Trivago.

But the CMA is concerned that at least some of these sites are failing to deliver on their promise of helping customers find a hotel room at the keenest possible rate. Instead, the price that a consumer is offered may be dictated by the business model of the booking platform and its relationship with partners in the hotel industry. Following an investigation that began last October, the regulator has issued enforcement orders to a number of unnamed companies, warning they face further action unless they align their practices. With consumer law.

Booking With Confidence

The CMA says the ongoing investigation is intended to ensure that consumers can use booking sites with confidence.

“Booking sites can make it so much easier to choose your holiday, but only if people are able to trust them,” said Chief Executive Andrea Coscelli. “Holidaymakers must feel sure they’re getting the deal they expected, whether that’s securing the discount promised or receiving reliable information about the availability of rooms. It’s also important that no one feels pressured by misleading statements into making a booking.”

The Watchdog has identified four specific areas where it feels the practices of hotel booking sites might not align with the expectations and best interests of customers.

For instance, the CMA has expressed concerns that the ranking of specific hotels can be influenced by factors that are not relevant to the customer. Rooms may be given a higher ranking, depending on the commission paid by a particular hotel group.

There are also worries about pressure selling in the shape of apparently real-time information about the number of people looking at a room at any given time or warnings that the booking may only be available at a bargain price for a limited period. This is seen by the CMA as potentially misleading customers by giving them a false impression of demand.

As has been the case in other retail sectors, the CMA feels that booking platforms and their industry partners may also be publishing misleading figures about discounts on rooms. Its suspected that some companies raise prices for a very brief period and then drop them again in order to claim that large discounts are on offer.

Hidden Charges

Last but definitely not least, the CMA warns that not all platforms are showing the full price of a booking from the outset. Instead, ‘hidden charges’ are added as the booking progresses.

Watchdog Cracks Down on Holiday Comparison Sites

Concern about hidden charges has been echoed by MoneySavingExpert.com, which launched its own probe to overlap with the CMA investigation. In findings that have been passed on to the regulator, MoneySavingExpert found that in a snapshot of 55 search pages, only 27 showed the full and final price. In one example, the final total cost for a six-day stay was £275 more than the figure that was initially quoted.

Urging action, MoneySaving Expert Editor Guy Anker said:

“As our recent investigation showed, hotel prices on booking and comparison sites can often be misleading. While the full extent of the CMA’s action is unclear we hope it’ll clamp down hard on sites that outrageously fail to show the true cost upfront and that claim false discounts – or pressure sell by wrongly suggesting the hotel is almost sold out.” 

What Happens Next 

Although no firm conclusions have been drawn about the practices of the industry, the regulator is nonetheless writing to a range of operators asking them to up their game.

“We’re now demanding that sites think again about how they’re presenting information to their customers and make sure they’re complying with the law. Our next step is to take any necessary action – including through the courts if needed – to ensure people get a fair deal,” said Coscelli.

In addition, the CMA is referring some of the terms used by the industry – relating to top price guarantees and prices promises to the Advertising Standards Authorities.

Getting the Best Deal

So in the meantime, what steps can consumers take to ensure they get the best deal from booking platforms?

The sites in question fall into two basic types, namely ‘brokers’, who handle bookings on behalf of hotels and ‘comparison sites’  that provide price information and then channel customers to the brokers.

With so many sites offering booking services  – many of them carrying information on the same hotels – it’s worth trying a more than one in order to track down the best deals. And even if you want to get the whole business of booking a room done and dusted as quickly as possible, it’s important to think carefully about what’s on offer and the information that you are being given before reaching for your credit cards.

For instance, if a site is seeking to drive sales by suggesting that the hotel is booking up fast and that several people are looking at the room you’re interested in, the best advice is not to panic.  If you’re trying to book in a peak holiday period, you might indeed want to get the transaction done quickly before hotels in the area sell out. At other times of the year, when there is less demand, it’s probably safe to say that even if you lose out on one room, there will be plenty of others available.

It’s also a good idea to take time-limited discounts with a pinch of salt. If an offer ends in “one hour’s time,” the chances are there will be other offers shortly afterwards.

But perhaps most importantly, it’s the price, rather than the discount that matters. Most search engines will let you rank rooms in order of price –  even if that is not the default option – making it easy to work your way up the price points, comparing the hotels as you do.

Hidden charges are another matter. In terms of selling pressure, the idea is that once a consumer has decided on a room, he or she will be less likely to abort the booking, even if extras are added. The secret of a good deal is to stay focused on the price you want to pay for the room on offer. If extras push the cost above your personal threshold, the option is there to abandon the shopping cart.

Of course, as consumers, we arguably shouldn’t have to think about the business model of the comparison site. And we should reasonably expect genuine prices. Under consumer law, online platforms should be clear about the way they make their money and accurate in the information they provide. That principle certainly applies to hotel bookings.

By | 2018-12-14T09:31:03+00:00 July 4th, 2018|Business, Personal Finance|Comments Off on Watchdog Cracks Down on Holiday Comparison Sites

About the Author:

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Trevor is a UK-based business journalist and author, specialising in startups, tech companies and fast growth businesses. His career in journalism began as Business Editor of BBC World television's pan-European text news services. From there he went on to edit e.Business and PLC Director magazines before going freelance. He is the author of three books, including The Unauthorized Guide to Business the Jamie Oliver Way, which has been translated into five languages. Follow Trevor on Twitter @trevorclawson