New CMA guidance for the online accommodation booking sector
Written By
Associate
UK
I am an associate in our Commercial Group in London, where I advise UK and international clients on a range of commercial issues.
When it comes to booking accommodation for holidays, it is now almost certain that consumers will enlist the services of the online accommodation booking sector to help find, compare and book the best deal. Following an investigation in October 2017 into a number of major online accommodation booking sites by the UK’s consumer protection regulator, the Competition and Markets Authority (CMA), serious concerns were raised about certain practices commonly being used. The CMA found that, in some instances, online accommodation booking sites were presenting consumers with poorly set-out or inaccurate information in their search results, which ultimately affected consumers' ability to choose the best deal.
As a result, in February 2019, the CMA published a set of principles to help businesses in this sector comply with consumer law. These principles apply to all online accommodation booking sites offering services to UK consumers. This includes online travel agencies, search engines, big hotel groups and short-stay apartment rentals, as well as smaller businesses selling travel accommodation online.
Online accommodation booking sites should now review their sales practices and assess their use of the following:
- Search rankings
- Consumers must be told if the order of their search results are affected by the revenue a business earns on bookings or "clicks".
- 'Paid for' search results listings must be clearly labelled, e.g. if any payment has been received for a pre-determined or prominent position.
- Such 'paid for' search results listings must be clearly differentiated from those which aren't 'paid for'.
- Reference prices
- Presenting a room rate as a discounted rate must only be done if the offer provides a genuine saving for consumers on a like for like basis.
- Comparisons between prices payable in different circumstances (e.g. comparing prices for stays on different dates) must not imply that the comparison represents a discount.
- Any "was/now" discount claims must indicate whether the "was" price was affected by any other factors by, for example, using text immediately adjacent to the comparison.
- Hidden charges
- The price displayed must be the total cost. This must include all compulsory charges and taxes, such as city tax or resort fees. The CMA states that a charge is compulsory if consumers cannot avoid them.
- Unavoidable costs should not be hidden, such as by revealing additional charges towards the end of the purchase process. The CMA considers this misleading and unfair to consumers.
- Pressure selling
- Consumers should not be provided with unclear, false or misleading statements about the popularity or availability of accommodation options.
- Any such statements must disclose the assumptions, limitations and qualifications that are relevant to the statement, for example, 'XX people have viewed this property in the last 30 minutes for different dates'.
The CMA states that online accommodation booking platforms must make any necessary changes needed in order to comply with its guidance by 1 September 2019. By complying with these principles, businesses will be less likely to breach consumer protection law, in particular the Consumer Protection from Unfair Trading Regulations 2008.
For further guidance on the principles set down by the CMA, you can find the CMA's full guidance here.
To find more about how this important guidance affects your business, and how to ensure compliance, join our interactive webinar on September 10/11, 2019: Bird & Bird & Travel: New guidance for the online accommodation booking sector: are you up to date?
