“last room available!“
“8 other people are viewing this property right now”
If you have ever searched for a hotel or holiday accommodation on the internet, the chances are that you will have come across phrases such as the above, possibly multiple times. And it is quite possible that upon seeing such wording, you will have thought – at least momentarily – “I had better book this room before somebody else does!”. Or maybe you wondered whether such claims did not quite represent the whole truth.
Well, if you are in this last category, it turns out that you may well have been correct. Various European regulators, including the UK’s Competition and Markets Authority (CMA), have for some time been investigating the practices of accommodation booking platforms (ABPs) such as Booking.com, Expedia, Hotels.com and other websites. And at the end of December 2019, the European Commission announced that following dialogue with itself and national consumer authorities, Booking.com, one of the world’s largest ABPs, had committed to make changes in the way it presents offers, discounts and prices to consumers, with a view to ensuring compliance with the requirements of EU consumer law. (https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6812)
The CMA had previously carried out its own investigation into the practices of a number of ABPs in relation to UK consumers. The CMA was concerned that the clarity, accuracy and presentation of information on some of these ABPs was at times misleading, and could prevent customers from finding the best deals. In February 2019, six major accommodation booking websites provided the CMA with formal commitments to not engage in certain practices which may mislead consumers.
In the course of its investigation, the CMA identified four categories of practices undertaken by the ABPs, which ran the risk of breaching UK consumer protection law, and in particular the Consumer Protection from Unfair Trading Regulations 2008. To counter these practices, the CMA also published a set of principles last year with which it expects the online accommodation booking industry to comply. The four categories of practices were:
- Failure to disclose the effect of payments on search results. Consumers generally assume that websites are not pushing any particular supplier or product, and that results are unbiased – even though rankings are sometimes based on a financial benefit being received by the ABP.
- Misleading reference prices. Where a reference price is given as a comparison to the offered price, and it is not clear whether that reference price reflects the genuine or underlying value of the accommodation being provided, this can cause consumers to overvalue the offer and increase the amount they are willing to pay.
- Misleading presentation of prices. In circumstances where fees, charges and taxes that are reasonably calculable in advance, such as a city tax, are not presented to the consumer in a way that is sufficiently clear, prominent or timely, consumers may believe the total cost of a room is lower than it really is; or find it more difficult to compare prices across other ABPs.
- Misleading popularity and availability statements. Statements about the popularity and availability of destinations, hotels or prices (such as those appearing at the beginning of this article) are sometimes designed to create an artificial impression of scarcity or competition, even where this is not the case.
As for Booking.com, it has committed to make the following changes to its practices no later than 16 June 2020:
- To make clear to consumers that any statement such as “last room available!” refers only to the offer on the Booking.com platform;
- Not to present an offer as being time-limited if the same price will still be available afterwards;
- To clarify how results are ranked, and whether payments made by the accommodation provider to Booking.com have influenced its position in the list of results;
- To ensure that it is clear when a price comparison is based on different circumstances (e.g. different stay dates) and not present that comparison as a discount;
- To ensure that price comparisons presented as discounts represent genuine savings, e.g. by providing details about the standard rate price taken as a reference;
- To display the total price that the consumers will have to pay (including all unavoidable charges, fees and taxes that can reasonably be calculated in advance) in a clear and prominent way;
- To present sold-out accommodation in a position in the search results that is appropriate to the search criteria;
- To clearly indicate whether an accommodation is offered by a private host or a professional.
So, thanks to the interventions of the CMA and the European Commission, the next time you book a holiday online, you are less likely to feel like you’ve been conned.
Article written by David Lerer