Are Hotel Booking Sites Ripping Off Customers?

Hotel booking sites are to be probed by the UK's competition watchdog to see if customers are being misled. The Competition and Markets Authority (CMA) is concerned that, rather than helping consumers, the sites might actually be making it more difficult for them.
The investigation will examine areas such as hidden charges, search results, and discount claims. The CMA said it was concerned about the clarity, accuracy and presentation of information on these booking sites.
The CMA will look into how search results are ranked and whether extra charges, such as taxes and booking fees, are clearly displayed. Another area being looked at is the way sites display how many rooms are left, how many people are viewing a particular hotel and messages that claim to state the last time at which a similar room was booked.
The CMA is concerned this is used for "pressure selling", creating a false impression of room availability or rush customers into making a booking decision.
According to the CMA, about 70% of people who shop around for accommodation use hotel booking sites to try to get the best deals.
Nisha Arora, director at the CMA, said: "We are concerned about the clarity and accuracy of these sites. Rather than helping consumers they may actually be making it more difficult for them."
She explained that the suggestions offered by such sites were not ranked solely on the preferences entered by the user: "When you put in your criteria - which room you want, when you want to stay - they are listed in a certain order. This is not just influenced by consumer preference but by commission - commercial considerations - and consumers might not be aware of this."
The British Hospitality Association (BHA) said it welcomed the probe as many of its members were concerned about the "vast power" of online booking agencies. It highlighted "high rates of commission, use of misleading information, pressure selling, and a lack of transparency". According to the BHA: "In the process, guests are paying more than they should for rooms."
The BHA also said that contract terms with some sites often included clauses that stopped a hotel offering a lower price on its own website than that offered to the online travel agent.
Simon Calder, travel editor of The Independent also highlighted commission rates: "The starting rate is 15%, which means that £15 out of every £100 stay is being taken by the intermediary. Hotels sometimes pay even more commission for increased visibility - i.e. giving the booking site even more in return for a higher profile on search returns."
Calder has advised people to contact the hotel direct to see if they will match the online rate or "perhaps provide a bonus such as a welcome drink or a free breakfast into the bargain." The investigation into hotel websites follows a year-long CMA probe into other price comparison sites.The Customer Service Blog reported on this investigation last month and you can view our article by clicking here.