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12 February, 2019

Hotel booking giants agree to change their ways following investigation

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A competition watchdog has secured a victory for UK holidaymakers, with some of the biggest online hotel booking sites committing to an overhaul of their practices.

Expedia, Booking.com, Agoda, Hotels.com, Ebookers and Trivago have been the subject of enforcement action by the UK’s Competition and Markets Authority (CMA) due to serious concerns around issues like pressure selling, misleading discount claims, the effect that commission has on how hotels are ordered on sites, and hidden charges.

It is widely known that some of these tactics have also been used by booking sites in Australia for some time.

The CMA took action last year because it was concerned that practices such as giving a false impression of a room’s popularity or not displaying the full cost of a room upfront could mislead people, stop them finding the best deal and potentially break consumer protection law.

All companies under investigation by the CMA have co-operated with its work and voluntarily agreed to a number of changes, one of which is making it clearer how hotels are ranked in search results.

The companies have also committed to not giving a false impression of the availability or popularity of a hotel or rushing customers into making a booking decision based on incomplete information.

Being clearer about discounts and only promoting deals that are actually available at that time is another practice that the booking companies have agreed to honour.

Finally, companies have committed to displaying all compulsory charges such as taxes, booking or resort fees in the headline price. Sites can still break that price down, but the total amount the customer has to pay should always be shown upfront.

CMA chairman Andrew Tyrie said: “The CMA has taken enforcement action to bring to an end misleading sales tactics, hidden charges and other practices in the online hotel booking market. These have been wholly unacceptable.

“Six websites have already given firm undertakings not to engage in these practices. They are some of the largest hotel booking sites. The CMA will now do whatever it can to ensure that the rest of the sector meets the same standards.

The competition watchdog noted that not all companies engaged in all of the practices cited above, but all have nonetheless agreed to abide by all the principles set out in the undertakings.

The CMA will now monitor compliance with the commitments made by the booking sites. All changes must be made by 1 September 2019 at the very latest, though the sites have already started making improvements.

Furthermore, the CMA will write to other hotel booking sites including online travel agents, metasearch engines and hotel chains setting out clear expectations for how they should be complying with consumer protection law.

The CMA also expects these sites to make necessary changes by 1 September. If it finds sufficient evidence that others could be breaking consumer protection law, the watchdog said it will consider taking further enforcement action.

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