The gloves are back on – online travel agents urged to play fair

The recent findings from the UK’s competition watchdog point to an interesting potential intervention in the online travel market – and one which may give leisure companies an opportunity to make a decisive stand to regain ownership of their customers.

The CMA review is at an interim stage but already talking of a number of actions against hotel booking sites. Amongst the issues identified are search results that reflect commission rates paid and a number of tactics to drive up customer conversion rate.

It seems likely that the impact of addressing these concerns may well be a reduction in conversion rate, increased customer acquisition costs and potential pressure on commission rates.

If these effects are felt then it does allow for a potential rebalancing of economics back towards companies own direct channels – an objective that many have been working hard to achieve.

Perhaps this creates a catalyst for some decisive action to reclaim the direct relationship with the customer – but with such firepower amongst the OTAs it’s likely to be a short lived opportunity so companies should act now while the gloves are at least temporarily back on.

Hotel booking sites face legal action for breaches of consumer protection law in a clampdown by the UK competition regulator.
The Competition and Markets Authority is launching enforcement action against a number of unnamed hotel booking websites as part of an ongoing investigation started last October.
The CMA has identified “widespread concerns” including

• Search results: how hotels are ranked being influenced by factors that may not be relevant to the customer’s requirements, such as the amount of commission a hotel pays the site.
• Pressure selling: creating a false impression of room availability or rush customers into making a booking decision.
• Discount claims: whether the discount claims made on sites offer a fair comparison for customers
• Hidden charges: the extent to which sites include all costs in the price they first show customers