Watchdog launches 'enforcement action' against OTAs: Why it matters

It has been announced that the UK's Competition and Markets Authority (CMA) is launching 'enforcement action' against various OTAs to ensure that large online travel sites are fully complying with consumer protection law. The brunt of the CMA's investigation - launched in October 2017 - is concerned with whether consumers are being 'misled' by pressure-selling tactics, such as 'One room left!' messages, and hidden fees & charges that undercut any 'Best rate guarantee' the OTA may be displaying.

While any legislative or legal challenges that may result will only apply in the UK, the move displays a welcome recognition of the fact that third-party booking sites, while providing a valuable search and comparison service, aren't always prioritizing the consumer and the value they get for their money.

When the news broke on the second day of our Direct Booking Summit: Europe last week in Amsterdam, reactions were mixed. While some delegates were excited to hear of the latest development in an investigation which caused quite the splash when it was first announced, others were more wary of the scope of the CMA's impact. We've written previously about the varied effect of legislative efforts against the OTAs, and it's true that it can feel as though the sites have a Hydra-like quality to them: for every action taken against them, they'll find two new ways to enter new markets and acquire more customers.

Nevertheless, the CMA's decision suggests that there's a growing awareness among consumers that they're not always being provided with the best deal by OTAs. It will be interesting to see whether the CMA extends their investigation to cover similar tactics on other sites - for example, metasearch engines or hotel websites themselves. It is not only Booking.com that display strikethrough pricing.

“We heard from hoteliers at last week's Direct Booking Summit that they are continuing to experience difficulty with OTAs ‘undercutting’ their price and misleading guests as to their offering,” says Charlie Osmond, Triptease founder and Chief Tease. “Guests are pressured into making decisions about their hotel stay - which is after all an important, often emotionally-led experience - that don’t always reward them with the best deal available.

“I’m sure hoteliers will be glad to hear of the CMA’s decision. While there are many wonderfully innovative solutions and campaigns being carried out by hotels to re-educate guests about the benefits of direct bookings, a wider recognition of some OTAs’ negative selling tactics is an important step in providing consumers with the best possible booking experience.”

It's possible that the big online travel sites will be taking more notice than usual of this latest action. With tech giants like Amazon and Google experiencing hyper growth in the travel sector, OTAs are under pressure to retain customers and continue to pull people down the searching funnel. Guests will increasingly look to book straight away on their search platform, whether that's Google's results page or Amazon Alexa, so if OTAs are going to keep people coming directly to their site they're going to have to ensure they provide a satisfying experience. The pressure selling tactics that have worked so well so far may not continue to in an increasingly 'assistive' world.

What do you think about the CMA's announcement - welcome action or just hot air? And for hoteliers around the world - would you like to see the same steps taken in your territory? Let us know at content@triptease.com and we'll feature your response in a follow-up post.


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About The Author

Lily is Head of Content at Triptease. When she's not investigating the industry or spreading the word that #DirectIsBest, she enjoys music, cycling, and obscure radio quiz shows.