Traditional Booking Sites Failed on Ethics

Traditional booking sites such as Expedia, and Agoda have been subject of close investigation by the Competition and Markets Authority (CMA) of the UK.

The investigation was initiated due to concerns around issues like pressure selling, misleading discount claims, the effect that commissions have on how hotels are ranked on search results and hidden charges.

Last year, we covered this story in one of our articles.

Since then, the investigation has shown some fruits and major booking sites have now agreed to follow the guidelines that were put forward by the authorities:

  • Search results: making it clearer how hotels are ranked after a customer has entered their search requirements, for example telling people when search results have been affected by the amount of commission a hotel pays the site.

Booking sites have a conflict of interest to display hotels neutrally when they get different commission levels from different hotels (which are often not under the control of hotels).

  • Pressure selling: not giving a false impression of the availability or popularity of a hotel or rushing customers into making a booking decision based on incomplete information. For example, when highlighting that other customers are looking at the same hotel as you, making it clear they may be searching for different dates. The CMA also saw examples of some sites strategically placing sold out hotels within search results to put pressure on people to book more quickly. Sites have now committed not to do this.
  • Discount claims: being clearer about discounts and only promoting deals that are actually available at that time. Examples of misleading discount claims may include comparisons with a higher price that was not relevant to the customer’s search criteria. For example, some sites were comparing a higher weekend room rate with a weekday rate or comparing the price of a luxury suite with a standard room.
  • Hidden charges: displaying all compulsory charges such as taxes, booking or resort fees in the headline price. Sites can still break that price down, but the total amount the customer has to pay should always be shown upfront.

CMA Chairman, Andrew Tyrie, said:

“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.
6 websites have already given firm undertakings not to engage in these practices. They are some of the largest hotel booking sites. The CMA will now do whatever it can to ensure that the rest of the sector meets the same standards.”

The full article by the CMA can be found here.

At LockTrip, we welcome such developments. And we hope that other countries will follow the example of the UK. But we are sad to see that regulation and enforcement by authority is required to make sure that basic ethical lines are not crossed.

While the above is a step into the right direction, it is yet to be seen how effective it will turn out to be and whether new ways will be developed in order to mislead consumers.

In many cases, the best weapon to fight issues caused by old technology turns out to be new technology. The internet has improved efficiencies greatly, but also created very strong monopolistic structures within the travel industry. The less competition companies face, the more room they have to manipulate, mislead and misuse their power.

It is our firm vision to rebuild the travel industry by reducing the market barriers and supporting a new wave of innovation through booking sites that will be powered by our distributed database. For free.

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LockTrip is the first marketplace with 0% commission where you can save on average 20% on your hotel and rental bookings compared to anywhere else. Read how to buy LOC tokens here!