Online hotel booking

CMA launches consumer law investigation into hotel booking sites.

From:
Competition and Markets Authority
Published
27 October 2017
Last updated
13 September 2019 — See all updates
Case type:
Consumer enforcement
Case state:
Closed
Market sector:
Recreation and leisure
Outcome:
Consumer enforcement - undertakings
Opened:
27 October 2017

Case timetable

Date Action
1 September 2019 Deadline to implement changes required by undertakings and sector wide compliance
6 February 2019 Undertakings provided by 6 online hotel booking websites
28 June 2018 Launch of enforcement action
27 October 2017 Investigation launched

Commitment to principles

13 September 2019: 25 more online Hotel Booking sites, include online travel agencies, meta-search engines, hotel chains and short term rental sites, have signed up to the CMA’s sector wide principles for complying with consumer protection law. Most sites have already made any necessary changes.

The CMA principles focus on use of promotions, scarcity messages, disclosures around the role of commission where it affects the order of search results and hidden charges.

The CMA will continue to actively monitor compliance in the sector and could take further action if changes are not made.

Principles

26 February 2019: The CMA has published a set of principles that set out the CMA’s view on what online accommodation booking companies need to do to ensure that they comply with consumer law.

Undertakings

6 February 2019: 6 online Hotel Booking sites have provided formal commitments to change practices on their websites which the CMA considers may be misleading consumers. These sites have already begun to make changes to their websites, which will be in place by 1 September 2019.

The CMA will also write to other major online major online travel agencies, meta-search engines and hotel groups to warn that they need to meet the same standards which today’s booking sites have committed to meeting.

The investigation by the CMA focused on use of promotions, scarcity messages, disclosures around the role of commission where it affects the order of search results and hidden charges.

The CMA will continue to actively monitor compliance with these standards and could take further action if changes are not made.

Launch of enforcement action

28 June 2018: The CMA launched enforcement action against a number of hotel booking sites that it believes may be breaking consumer protection law. This action can include either securing legally binding commitments from those involved to change their business practices or, if necessary, the CMA can take them to court.

In addition to the enforcement activity, warning letters have been sent to a range of sites, demanding they review their terms and practices to make sure they are fair and comply with consumer protection law.

The CMA has also referred a number of concerns around online hotel booking sites’ price guarantees and other price promises to the Advertising Standards Authority (ASA). The CMA has asked the ASA to consider whether statements like ‘best price guarantee’ or ‘lowest price’ mislead customers and what conditions must be met for companies to make such claims.

The CMA continues to assess the evidence gathered on the practices of other online hotel booking sites and could launch further enforcement cases in due course.

Investigation launch

27 October 2017: The Competition and Markets Authority (CMA) opened an investigation into hotel (including B&Bs and hostels) booking sites following concerns that some of their practices may breach consumer law.

The CMA is concerned about the clarity, accuracy and presentation of information on sites, which could mislead people and stop them finding the best deal. The CMA has written to companies across the whole sector requiring information to understand more about their practices.

This investigation will examine several practices, including:

  • Search results: how hotels are ranked after a customer has entered their search requirements, for example to what extent search results are influenced by other factors that may be less relevant to the customer’s requirements, such as the amount of commission a hotel pays the site.
  • Pressure selling: whether claims about how many people are looking at the same room, how many rooms may be left, or how long a price is available, create a false impression of room availability or rush customers into making a booking decision.
  • Discount claims: whether the discount claims made on sites offer a fair comparison for customers. For example, the claim could be based on a higher price that was only available for a brief period, or not relevant to the customer’s search criteria, for example comparing a higher weekend room rate with the weekday rate for which the customer has searched.
  • Hidden charges: the extent to which sites include all costs in the price they first show customers or whether people are later faced with unexpected fees, such as taxes or booking fees.

Press release: CMA launches consumer law investigation into hotel booking sites (27.10.17)

Call for your views

The CMA wants to understand the impact that these practices have on sites’ customers so is calling on people that use them, and hotels that advertise with them, to share experiences which could be relevant to the investigation.

Please send responses by email to onlinehotelbooking@cma.gov.uk by 15 December 2017.

Contacts

Assistant Project Director

Hayley Fletcher (hayley.fletcher@cma.gov.uk)

Project Director

Cecilia Parker Aranha (cecilia.parkeraranha@cma.gov.uk)

Senior Responsible Officer

George Lusty (george.lusty@cma.gov.uk)

Published 27 October 2017
Last updated 13 September 2019 + show all updates

  1. 25 more online hotel booking sites have signed up to the CMA’s sector wide principles for complying with consumer protection law.

  2. Undertakings published.

  3. Details of enforcement action added.

  4. First published.

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