Updated February 6,
The UK’s Competition and Markets Authority (CMA) announced today it has taken action against Expedia, Booking.com, Agoda, Hotels.com,
“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,” CMA chairman Andrew Tyrie said in a statement. “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.”
Although the authority uses the word “hotel,” a CMA representative confirmed with VRM Intel that the investigation and actions apply to all accommodations listed on the OTAs, including vacation and holiday rentals, independent B&Bs, serviced apartments, hostels, etc.
The CMA’s probe began in October 2017 following concerns that the way the sites were ranking listings and the information they were – or weren’t – displaying could mislead consumers and potentially be in violation of the UK’s Consumer Protection from Unfair Trading Regulations 2008.
The investigation examined four key practices, as specified in the case document:
- 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.
The CMA did not produce a finding on whether the sites breached the consumer protection law (only a court can do this), but as a result of its findings and the voluntary compliance of the six sites in question, the authority set forth the following standards for which it will monitor their compliance:
- The OTAs must make it clearer how hotels are ranked in search results and tell consumers when the results rankings have been affected by the amount of commission the hotel pays the site.
- The OTAs cannot give a false impression of the availability or popularity of a search result or otherwise rush consumers into booking decisions based on incomplete information. For example, if a site shows that other consumers are looking at the same hotel, they must make it clear that those consumers may be searching for different dates. According to its press release, “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.”
- The OTAs must be clearer about discounts and promote only deals that are available at that time, as well as
usesimilar properties and price periods in comparisons. According to the release, “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.”
- The OTAs must display all mandatory charges, including taxes, booking fees, or resort fees in the headline price. They may show such charges individually in a price breakdown, but the total cost must be shown up front.
The six sites have until September 1 to comply. The CMA will also write to other major OTAs, meta-search engines, and hotel groups to warn that they must also meet the same standards. The full case can be read here.
A spokesperson for Expedia provided the following statement:
We have a two-decades’ old commitment to putting travel data and details in the hands of consumers, knocking down barriers to searching, planning, and booking, all with the best interests of consumers in mind – to make travel easier, more attainable, more accessible and more enjoyable. This mission is core to what we do on our Expedia, Hotels.com, and
A spokesperson from Booking.com provided the following statement:
We are pleased that the CMA has closed its investigation, without finding
This false marketing is extremely frustrating to all – owners and renters in the vacation rental market. Companies like Home Away (part of expedia) follow the same cheap tactics. I recently noticed a pop-up on my listing A that showed that another Listing B rented for $200 per night. What the HA’s system didn’t realize is that we own the listing B and we did not rent for $200 per night but for a much higher nighty rate. With pop-ups that show similar mis-leadinsg information Home Away is trying to make the home owners drop the rates. I hope owners are able to realize that and hold on to their rates. We also hope that the guests/renters learn to look for Owner Direct listings (owner webstes for example) to rent direct.