Hotel booking sites are to be probed by the UK’s competition watchdog to see if consumers are being misled by them. The Competition and Markets Authority is concerned that rather than helping consumers, the sites might actually be making it more difficult for them.
The CMA said it was “concerned about the clarity, accuracy and presentation of information on sites”. The investigation will examine areas such as hidden charges, search results, and discount claims. Leading booking sites include Expedia and Booking.com.
In a statement, booking site Trivago, which is majority owned by Expedia, said: “Trivago will work with the CMA to explain the benefits it delivers to consumers looking for their ideal hotel.” Booking.com said it would not be commenting at this time.
According to the CMA, about 70% of people who shop around for accommodation use hotel booking sites. Nisha Arora, a senior director at the CMA, told the BBC’s Today programme: “We are concerned about the clarity and accuracy of these sites. Rather than helping consumers they may actually be making it more difficult for them.” She explained that the suggestions offered by such sites were not ranked solely on the preferences entered by the user. “When you put in your criteria – which room you want, when you want to stay – they are listed in a certain order. This is not just influenced by consumer preference but by commission – commercial considerations – and consumers might not be aware of this.”
The British Hospitality Association (BHA) said it welcomed the probe as many of its members were concerned about the “vast power” of online booking agencies. It highlighted “high rates of commission, use of misleading information, pressure selling, and a lack of transparency”. “In the process guests are paying more than they should for rooms.” The BHA also said contract terms with some sites often included clauses that stopped a hotel offering a lower price on its own website than that offered to the online travel agent.
Simon Calder, travel editor of the Independent, also highlighted commission rates: “The starting rate is 15%, which means that £15 out of every £100 stay is being taken by the intermediary. “Hotels sometimes pay even more commission for increased visibility – i.e. giving the booking site even more in return for a higher profile on search returns.” He says he tends to contact the hotel direct, to see if they will match the online rate and “perhaps provide a bonus such as a welcome drink or a free breakfast into the bargain”.
The CMA has written to companies across the whole sector. It is seeking evidence from both the websites and hotels, and would also like consumers to get in touch with it and share their experiences. It will look into how search results are ranked, and it also wants more information on whether extra charges, such as taxes and booking fees, are clearly displayed.
Another area being looked at is the way sites display how many rooms are left, how many people are viewing a particular hotel and messages that claim to state the last time at which a similar room was booked. Ms Arora said the CMA wanted to hear how the sites gathered the information for these claims.
The CMA is concerned this is used for “pressure selling”, creating a “false impression of room availability or rush customers into making a booking decision”. Social worker Valentin Danciu, from Ipswich, told the BBC that he had used a hotel booking website to reserve an apartment in Germany which was advertised at £31 per night. However, when the booking confirmation arrived it also included a €22 service charge and a €45 cleaning fee. Mr Danciu said he had been using hotel booking sites for years, but this time seemed to have missed the small print. He said until he received the email confirmation he had been given no indication that the total amount would be more than £90.
The investigation into hotel websites follows a year-long CMA probe into price comparison sites.
The CMA concluded that price comparison websites worked best for car insurance and worst for broadband.
Source: BBC News