Industry welcomes competition authority’s action against OTAs

The UK B&B market has joined the wider hospitality market in welcoming the enforcement action against online travel agents by the Competition and Markets Authority. But the B&B Association has warned there are more abuses to be addressed.

Last month the CMA announced action to put a stop to uncompetitive practices highlighted by the B&B Association that prompted the authority’s investigation in September 2017.

The action is against false discounts created by OTAs to mislead customers, against false room availability statements, and against “misleading, non-transparent and manipulated default search rankings” by OTAs.

B&B Association chairman David Weston said that while he welcomed the CMA’s action to stop some of the anti-competitive practices of OTAs, two out of the original five abuses remained to be stopped, concerning rate parity clauses and forced bidding by OTAs on B&B names with search engines.

Welcoming the enforcement action B&B consultant Yvonne Halling told Luxury Bed & Breakfast: “For a very long time now, the OTAs have been quietly and subtly implementing practices that are not in the best interests of their accommodation providers.  The revelations this week, thanks to the great work by the UK B&B Association, show quite clearly how they’ve also been misleading the public.  Hopefully, the CMA’s recommendations will be carried out within the time frames laid out.

“It’s good news that these practices have been revealed, and in time, I hope that the public will realise just how they’ve been misled, which should result in more direct bookings for accommodation providers, but time will tell.  Accommodation providers now need to step up and be there online for their guests, which unfortunately they are not, in too many cases, which is of course why the OTAs exist.

“The news of the OTAs malpractices in terms of how they’ve been misleading the public this week is good news, but unfortunately just the tip of the iceberg.  What the public don’t see is the other side of it from the perspective of the accommodation providers. It’s not just about the commissions they pay to the OTAs, but more about the psychological grip they have over small operators.  With these revelations, come responsibility by the accommodation providers to step up and learn new skills that put them directly in front of their guests, online.  There is much work to do on this,” she said.

The announcement of enforcement action on online booking companies will provide greater transparency for customers, according to UKHospitality.

Making search result ranking criteria clearer, reducing pressure selling tactics, ensuring that only applicable discounts are displayed, and revealing hitherto hidden charges were among the recommendations.

UKHospitality has also urged the Government to act on unfair parity clauses which penalise hotels.

Kate Nicholls, CEO of UKHospitality, said: “Action to provide transparency, clarity and fairness around online booking platforms will provide a fairer playing field, which can only be a good thing. Customers booking online have for too long been unwittingly misinformed and they deserve better.

“The CMA’s recommendations will simultaneously add a level of protection for accommodation businesses who have too often lost out via unfair practices.”

She added: “It is a welcome step to increase transparency in the realm of online platforms at a UK level. We now need action to address unfair parity clauses to ensure there is fairness and transparency for both customers and businesses.”

For comment see  March issue of Luxury bed & Breakfast