The UK Competition and Markets Authority is targeting the way hotel booking sites promote discounted offers and push sales by falsely reporting limited room availability.
The UK Competition and Markets Authority (CMA) has recently announced its focus on the online hotel booking industry. It has not named any specific websites but it announced that it has sent out letters to a range of sites it believes are at fault. These warning letters have legal weight behind them and they will force hotel booking companies to assess and change some of their practices.
This is great news for consumers and it’s great news for honest tourism marketers.
The CMA’s warning letters have asked hotel booking sites to consider the following aspects of their online service:
- Their SEO practices, with an emphasis on earning the top rankings, as opposed to finding loopholes.
- Whether there are unexpected charges further along the booking process.
- The way discounts are presented and advertised to users.
- Whether they are misleading users by implying room availably is more limited than it really is. No more claiming ‘One room left!’ when there are plenty of available rooms.
Essentially, the CMA has demanded a more honest, transparent hotel booking service, across the entire industry. This transparency will be great news for the 70% of people who use hotel booking sites when they browse the internet for holiday deals.
The attitude and drive behind the investigation is perhaps best summed up by a statement made by Andrea Coscelli, the CMA’s chief executive:
"Booking sites can make it so much easier to choose your holiday, but only if people are able to trust them.
"We are now demanding that sites think again about how they are presenting information to their customers and make sure they are complying with the law.” (source)
It’s still unclear whether most booking sites are included in CMA’s investigation, or if it is just a few outliers. Expedia is one of the top brands in the hotel booking website industry and they have expressed an interest in working with the CMA to ensure they continue to provide a transparent, helpful service. It’s reassuring to hear this from Expedia and we hope that other big companies follow suit.
But How does CMA’s Investigation Affect your Business?
The answer to this question obviously depends on whichever part of the tourism industry your business operates within. For smaller hotels and B&Bs, this is very good news as it will make it harder for bigger companies with bigger budgets to pay their way to the top of Google and to the top of booking websites. It will prevent these companies from taking a larger share of the market than they deserve.
Just as the changes to TripAdvisor’s algorithm has created fairer competition for rankings, it is likely that CMA’s investigation will create a fairer market for companies working in the hotel industry. As all of these services improve, there are less ways to cheat the system and tap into customers you don’t deserve and more emphasis on earning your customers by offering a superior service to your competitors. This is also great news for consumers.
For other adjacent industries within the travel sector, it’s unclear whether changes made to hotel booking sites will impact the number of people travelling to other countries and paying for your services. But this seems unlikely. If anything, it is perhaps more likely that business will increase if consumers are to receive fairer treatment and access to the best deals (as opposed to just deals paid for by the highest bidder).
TMA will continue to provide news and insights about the tourism industry and we are always interested in chatting with any travel companies who need a little help with their digital marketing campaigns. So, please feel free to get in touch if you have any questions for us!
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Chris and his team will send you a weekly email offering high-value insight and advice about a variety of marketing and business development topics related to the tourism industry. We address specific destinations, tours and activities, and the hotel industry. We also provide important travel industry news and updates.