Research conducted by QuBit, an online customer data platform, has estimated that the new EU “cookie law” could cost the UK economy up to £10 billion.
The so-called “cookie law” is an EU Privacy and Communication Directive, which will come into force on May 26.
It decrees that websites must gain consent from online users to allow their cookies to be used to collect their data.
QuBit has said this directive is one of the most important changes in web development in the last five years.
It has set out a number of key threats this piece of legislation could pose, many of which will have strong implications for the travel industry.
QuBit has suggested that the need for consent will discourage users from visiting sites and has predicted a potential cost of £2.6 billion to the UK economy.
The directive could also lead to an increase in business migration. Online businesses may decide to move away, to avoid the costs of compliance. This could cost the economy £2.9 billion.
Travel companies and hoteliers, in particular, rely on a quick and hassle-free process to optimise online sales and the directive would undoubtedly slow that process down, says QuBit.
Graham Cooke, chief executive of QuBit, said: “Cookies are now a massive part of the travel industry, generating significant revenues for the sector as a whole.
“Cookies are an integral part of allowing these sites to function correctly, providing visitors with a personalised experience which drives sales. Therefore, anything which discourages their use will have a noticeable impact.”
QuBit also revealed that 95% of UK businesses are currently not compliant with the directive, with just a month to go before it comes into force.
James Roper, chief executive of Interactive Media in Retail Group (IMRG), said: “Consumers don’t want to understand it (the Directive); they want the government to sort it out.
“You ask the man or woman in the street what a cookie is. I don’t think education is the answer.”
The analysis is based on the potential cost of cookie consent if businesses fail to approach the directive effectively and details the possible impacts to one of the UK’s fastest-growing sectors.
Cooke said that while the directive poses as an obstacle to the travel industry and to sites which rely heavily on online bookings, the potential loss in sales can be stemmed by the application of technology.
“Such an approach will allow online bookings to continue to grow, whilst at the same time letting travel sites to remain compliant with the law,” he said.