On the 27th October 2017, the CMA opened an investigation into how the Online Travel Agents conduct their business.
Recap from October 2017, BBC news:
“The investigation will examine areas such as hidden charges, search results, and discount claims.”
The Competition and Markets Authority (CMA) has appealed to consumers to write to them to detail their experiences about booking on websites such as Hotels.com, Booking.com, Expedia and Agoda.
This was pulled from the government’s website:
“The watchdog is seeking evidence from both the websites and hotels and would also like consumers to get in touch with it and share their experiences.”
CMA chief executive Andrea Coscelli said: “Around 70% of people who shopped around for hotels last year used these sites and they should all be confident they have chosen the best accommodation for their needs and are getting a good deal.”
The investigation will cover the following:
* 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 needs, 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 places 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. The application 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.
At this time, the big one for me is the “pressure selling”. How many times have you visited Booking.com only for them to tell you that there is “one room left at the property X”, when you know that this isn’t the case?
Where are we right now?
“Hotel booking websites could be forced to stop claiming ‘one room is left at this price’ and giving more promotion to hotels that pay the most commission, the UK’s competition regulator has said.”
It’s not just Booking Holdings (Booking.com’s group name) or Expedia Group that have come under fire, Airbnb has been challenged as well. (It’s important to note that Airbnb has been challenged not by the CMA, but by the EU.)
Back in October, I said that time would tell if the CMA actually did anything about the investigation, or if it was all just smoke and mirrors. I’m happy to see that they are acting and they are putting in deadlines to these big corporations.
Now is the perfect time for small, independently owned hospitality businesses to take advantage of the fact that the greedy third party bookings websites are being shamed in public. It’s time to push the benefits of booking direct, if you are not already doing so in every social media post, email, or conversation with your guests. If you don’t use the direct booking strategies I lay out in this blog, then you are leaving money on the table.
If you need help and guidance on how to do this, email me at email@example.com.