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

Tuesday 03 July 2018

Article

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

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