This Wednesday the 6th of February, the United Kingdom’s Competition and Markets Authority (CMA) announced new “voluntary changes” from some of the travel industry’s biggest players in response to an investigation into a range of practices; including pressure selling, misleading discount claims, the effect that commission has on how hotels are ordered on sites, and hidden charges.
But what do these changes mean for hoteliers both in and outside the United Kingdom?
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.
Andrew Tyrie – CMA Chairman
The changes come as the result of the investigation and intervention by the CMA into OTA practices. Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago have now voluntarily agreed to make specific changes to their current practices regarding:
- Search results and how search rankings are affected by factors such as the commission paid by the hotel
- Pressure selling by artificially inflating urgency messaging and placing sold-out hotels in search results
- Discount claims and misleading comparisons of different rates, dates and rooms to what has been searched
- Hidden charges and unexpected taxes or fees that aren’t mentioned to guests upfront
Changes will need to be made by the 1st of September regarding these misleading tactics, with the CMA monitoring compliance and commitment.
What does this mean for UK hotels?
Since the CMA first began their investigation, we have seen more and more hotels embrace the concept of personalisation to fairly represent their property and offering to each and every potential guest. More transparency from the bigger players in the market means a more level playing field, further enabling hoteliers to thrive in the online booking space, instead of being ransomed by OTAs just to survive.
Hotels can now focus on offering what is best for their guest – not the middle man
Kristian Valk – Hotelchamp CEO
In short, this is great news for hoteliers and guests. From a practical perspective of course, hoteliers now don’t have to grapple with underhanded tactics which either limit OTA visitors from seeing their hotel, or perhaps lead them to mistakenly believe they will get a better deal through a third party instead of the direct channel.
On top of this, guests are now more savvy to the fact they should be further investigating the right deal for them. With the story gaining mainstream attention from a range of publications, including CNN, BBC and The Guardian, public opinion is increasingly on the side of the hotelier. Hoteliers should be ready and waiting to take advantage of this surge in visibility, presenting guests with the best offer as soon as they hit the direct channel.
By intelligently identifying common details about website traffic, such as location, browser type or desired dates, hotels can offer visitors tailored content and deals to convince them to book direct. These relevant offers provide more legitimate value to a guest and firmly demonstrate that they are getting a better deal through the direct channel as opposed to an OTA.
What does this mean for non-UK hotels?
It cannot be overstated how important this news is for hoteliers. Regardless of how voluntary these changes are, and the technical legality that has been their catalyst, it is a clear indication that hoteliers, and ultimately their guests, have been exploited. Illegal or not, these OTA practices have certainly not been fair.
Kristian Valk – Hotelchamp CEO
Firstly, as this is a 'voluntary' change on behalf of the OTAs, it's difficult to say with certainty what will happen for hotels and consumers outside the UK and the CMA’s jurisdiction. That being said, the CMA typically works closely with the European Commission in an effort to standardise things like this – especially as these types of changes sometimes act as a regulatory domino, so to speak, leading the way for other territories to update their guidelines. It could be that the UK CMA's investigation is used as a precedent in the event that OTAs continue these practices in the EU but again, this is not possible to say for sure.
More interestingly though is that the UK's Competition and Markets Authority exists specifically to protect UK consumer rights. Hotels by nature serve clients from all over the world (including the UK) - so it will be interesting to see how the changes are enacted by the OTAs.
At the very least, hoteliers around the world should be aware of new fairer visibility from UK visitors and likewise, holidaymakers browsing for properties in the UK are likely to get a clearer picture of what is on offer them to start with.