Many of us have felt the pressure when seeing the ***LAST ROOM AVAILABLE*** warning on travel booking sites like Booking.com or Expedia. For some sites, these warnings haven't always been entirely representative, but turning up to an empty hotel when the long-awaited trip comes should now be a thing of the past, as travel booking websites adopt fairer and more transparent practices.
The CMA and European Commission crack down on misleading offers
On 20 December 2019, the European Commission announced that the travel booking website Booking.com had committed to making changes by 16 June 2020 in the way it presents offers, discounts and prices, to enable consumers to make better informed comparisons, in line with the requirements of EU consumer law.
Although these recent commitments were made by Booking.com only, they follow an enforcement decision by the UK's CMA in February 2019 against six travel booking websites in response to concerns over pressure selling, misleading discount claims, commission-led ordering of search results, and hidden charges. The decision led to the CMA securing commitments from a further 25 online hotel and other accommodation booking platforms to follow the CMA's and legal consumer protection principles.
The CMA and European Commission inevitably expect these commitments to set a general industry standard to be followed by all travel booking websites (including not only search platforms, but also primary hotel websites).
More transparent practices for all travel booking websites
Online travel services platforms will remain under scrutiny from national regulators (coordinated in the EU by the European Commission) now they have clearer guidance on acceptable practices. This means all travel booking platforms should review and, if necessary, implement the following practices, in line with the Booking.com commitments:
- Make clear to consumers that any statement claiming restricted room availability, such as "last room available!", refers only to the offer on the specific platform (by displaying, for example, "limited rooms available on this website").
- Not present an offer as being time limited if the same price will still be available after the offer end date.
- Disclose how results are ranked, and clearly show when payments made by the travel service provider to the platform affect its ranking in the list of results (eg include "Sponsored listing" at the top of the listing).
- Present sold out accommodation or other services in a manner that does not mislead consumers into thinking these are available until they click on the link (however as these may still be of interest to consumers who can change their dates, they can be displayed but only with a very clear indication that they don't correspond to the current search criteria).
- Distinguish between professional and private accommodation hosts ("there cannot be ambiguity about the business motives of a practice and the nature of the trader").
- Not present a price as a "discount" when in reality it is only a price comparison with different circumstances where seasonality and other factors play a part (eg stay dates).
- Ensure that price comparisons presented as discounts represent genuine savings, for example by displaying the standard rate price as a reference.
- Display the total price that the consumers will have to pay in a clear and prominent way (if extra charges cannot be calculated in advance, consumers must be informed of the possibility that extra charges may apply).
Despite such concrete guidance on what is no longer acceptable, it remains to be seen exactly where the line will be drawn in future cases between unfair, misleading or aggressive practices and legitimate marketing tactics. We do, however, expect to see consumer protection and competition regulators taking a robust approach to any practice that comes close to misleading consumers.
The new Platform for Business Regulation – B2B transparency
Booking.com has until 16 June 2020 to implement its commitments, a deadline which roughly coincides with the entry into force in the EU and UK on 12 July 2020 of the Platform for Business Regulation, which will impose fairer practices on "online intermediation services" used by businesses to sell their goods and services. For travel websites, it will require, in particular:
- Better transparency on the main parameters used to rank hotel and transport providers on their sites.
- Disclosure of any advantage given to their own products over others.
- Setting up an internal complaint handling procedure for their business users (with mediation options).
These requirements aim to protect small travel business owners from any unfair practices by the online intermediaries increasingly used by consumers to book their holidays. Small hotel owners had been complaining about the distorted picture of availability and prices shown by some websites, claiming this led to consumers opting for large professional accommodation providers. They also raised concerns about the imposition of flexible cancellation rules in some cases.
Very much in line with the commitments given on the consumer side, the new Regulation should contribute to greater transparency around booking websites' roles as intermediaries, helping to level the playing field for smaller actors.
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