Competition watchdog clamps down on OTAs

Competition watchdog clamps down on OTAs

Expedia,, Agoda,, ebookers and trivago subject of enforcement action

Expedia,, Agoda,, ebookers and trivago have been the subject of enforcement action by the Competition and Markets Authority 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.

The pressure has forced them to agree to make formal commitments to change their ways after the CMA took action last year amid concerns that consumers were being misled over the full cost of rooms.

A deadline of September 1 has been set for the sites to make the necessary changes.

All companies under investigation by the CMA have co-operated with its work and voluntarily agreed to:

• Make it clearer how hotels are ranked after a customer has entered their search requirements, for example telling people when search results have been affected by the amount of commission a hotel pays the site.

• Not to give a false impression of the availability or popularity of a hotel or rushing customers into making a booking decision based on incomplete information. For example, when highlighting that other customers are looking at the same hotel as you, making it clear they may be searching for different dates. The CMA also saw examples of some sites strategically placing sold out hotels within search results to put pressure on people to book more quickly.  Sites have now committed not to do this.

• Be clearer about discounts and only promoting deals that are actually available at that time. Examples of misleading discount claims may include comparisons with a higher price that was not relevant to the customer’s search criteria. For example, some sites were comparing a higher weekend room rate with a weekday rate or comparing the price of a luxury suite with a standard room.

• Display 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.

Not all firms engaged in all of the practices cited, but have agreed to abide by all the principles set out in the undertakings, the CMA announced today.

The authority will monitor compliance with the commitments made by the booking sites with all changes required to be made by September 1 at the very latest, though the sites have already started making improvements.

The CMA will also 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.

“If it finds sufficient evidence that others could be breaking consumer protection law, it will consider taking further enforcement action,” the CMA added.

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.”

However, the CMA has not made a finding on whether the hotel booking sites’ practices have breached consumer law as all the companies co-operated and agreed to make changes to their practices.

Rory Boland, travel editor at consumer champion Which? said: “We have repeatedly exposed sites like these for using dodgy tactics like pressure selling, sneaky charges, dodgy deals and discount claims so it’s absolutely right that the CMA is taking strong action.

“These changes must now be swiftly implemented to stop these misleading practices, so customers can trust the deals they’re presented with are really deals and are told the total cost of their room upfront when booking a hotel online.”