Business

Online travel sites will halt misleading sales tactics in U.K. — but no impact on Canada

Britain's consumer watchdog has struck a deal with some of the world's most popular online travel booking websites, getting them to be more transparent about hidden fees and stop implying certain hotels are in danger of being booked solid.

British regulator singles out 6 companies for helping to come up with better rules

Britain's consumer watchdog says all the travel websites it worked with fully co-operated, voluntarily agreeing to change any tactics deemed misleading. (Christian Hartmann/Reuters )

Britain's consumer watchdog has struck a deal with some of the world's most popular online travel booking websites, getting them to be more transparent about hidden fees and stop implying certain hotels are in danger of being booked solid.

Last year, Britain's Competition and Markets Authority began an investigation into tactics such as pressure selling, misleading discount claims, how hotels are ranked on some sites and other hidden charges that some in the online travel industry are not as open about as they could be about.

The regulator considers pressure selling to be when a website creates a mistaken impression that certain rooms are about to fill up, by giving the consumer information about how many other users are currently browsing that same room online.

By discount claims, it is referring to the practice where a website will try to illustrate a sale price by comparing it to a regular price that isn't relevant, such as being on different dates, or a different room type.

Hidden fees are when the price at the end of the ticket-buying process ends up being much higher than what it was at the start.

The regulator singled out six companies — Expedia, Booking.com, Agoda, Hotels.com, ebookers and Trivago — for co-operating with their investigation and agreeing to fully comply with the CMA's recommendations, while stressing that none of those practices were necessarily specifically happening at any of the companies mentioned.

"Not all firms engaged in all of the practices cited above, but all have nonetheless agreed to abide by all the principles set out in the undertakings," the CMA said.

The British regulator says travel companies have until September of this year to comply with the new regulations, but for their part, some of the companies were very eager to tell their side of the story.

Citing the company's  "two-decades' old commitment to putting travel data and details in the hands of consumers," a spokesman for Expedia noted the company worked with the CMA "on a voluntary basis and the CMA in turn closed its investigation in respect of the Expedia Group with no admission or finding of liability." 

Many consumers comparison shop for travel deals by using competing apps and websites to scan for bargains. (TRVL/Canadian Press)

"We continue to believe our practices did not breach any consumer laws," Dave McNamee said in a statement to CBC News.

A spokesperson for Booking.com was singing a similar tune. "We are pleased that the CMA has closed its investigation, without finding admission of infringement on behalf of Booking.com," Annie Hennessey told CBC News in a statement. 

"Many of the commitments named by the CMA are already in place for Booking, but we have agreed to test and implement new commitments, like pricing inclusive of all fees."

A spokesperson for Singapore-based Agoda also noted that the CMA found no formal wrongdoing at the company, but added that "in concluding our discussions with the CMA we have agreed to test and implement new commitments, like pricing inclusive of all fees, to ensure we meet all standards for consumer transparency in the UK."

The other three companies named by the regulator didn't didn't get back to a CBC request for comment with one business day.

Change limited to U.K.

While consumers will no doubt welcome any development that makes the art of finding a deal online more transparent, there's nothing to suggest that Wednesday's news will change the status quo anywhere but in Britain.

McNamee said whatever changes the company has made to its processes are "limited to the U.K." although he says the company will happily work "with regulatory authorities across our global markets."

Canada's Competition Bureau, the closest equivalent to Britain's CMA, said in a statement to CBC News that it was aware of CMA's actions, but would not confirm if it was conducting any similar investigations because it "has an obligation to conduct its work confidentially," but without naming any names it did acknowledge that it has observed some travel booking companies who do business in Canada "resort to practices that could raise concerns under the Competition Act."

"The Competition Bureau encourages the online hotel booking platforms to review their marketing practices and ensure that they provide upfront, clear and accurate information to consumers," Bureau spokesperson Jayme Albert said.

Retail expert Bruce Winder, a co-founder and partner at the Retail Advisors Network, says the regulations are a logical next step for a still young industry that is starting to become more mature.

The entire industry is barely a decade old, and "hasn't really been regulated yet, so you see some interesting practices by companies taking liberties straddling the line of what's right and what's wrong," he said in an interview.

Overall, he calls the British news "a good start" for consumer protection but says ultimately, regulation is only as good as the desire and capability to enforce it.

"Any time you have an industry regulating itself you pose the risk of businesses not fully doing it," he said.

"The lesson to be learned is that companies need to be watched."

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