HOTELS
OTAs UNDER INVESTIGATION
Travel buyers urging employees to book in policy can feel justified following the government’s competition watchdog’s latest threat against the OTAs, which dominate the online hotel booking space. In June this year Competition & Markets Authority (CMA)
said it was taking “enforcement action” against several OTA-owned hotel booking sites it believed could be in breach of consumer protection law. The CMA has not yet
Hotels are imposing new penalties and rate structures to discourage last-minute cancellations
named the OTAs because, according to CMA chief executive Andrea Coscelli, “we’re demanding sites think again about how they are presenting information to their customers and make sure they are complying with the law”. The CMA has sent
new pricing structure will provide added flexibility for those who want it and cost-savings for those who do not require the flexibility to change their reservations.” Rachel Newns, hotel product manager at FCM Travel Solutions, believes Hilton’s new strategy is effectively a version of dynamic pricing (where rates are determined according to supply and demand). “Hilton has been pursuing a move to dynamic pricing for some time and this is the next development in that approach,” she says.
AGREEING ON FLEXIBILITY Are buyers prepared to pay more? Simon Hawley, travel category manager at Capita plc, says hoteliers are re- sponding to a new commercial reality: “Recently hotel- iers have shifted from on-the-day cancellation policies to 24 hours. I appreciate the desire to make that change – having an on-the-day cancellation policy for the most part of the year would give next-to-no opportunity to resell the rooms and by 24 hours prior, most travellers will generally know if a room isn’t required. “For our programme, the effect was a change in
traveller behaviour to being more mindful and bringing forward action to cancel a room. It was a good example of hotelier and corporate working in partnership and driving logical change – plans change and mutually agreeable parameters on flexibility can be reached.” However, one travel manager, who works for an advertising agency, said they would feel alienated by matching price to demand rather than following negoti- ated rates. “It seems that the process tips the balance in favour of hotels, especially as it can mean we pay more than expected and more than others in a similar situa- tion. We feel there is a lack of transparency and trust.” Chris Vince, director of operations at Click Travel, warns new pricing structures could also hinder flexibility for corporates. “There is so much pressure being applied to travellers and bookers to be extremely cost-conscious. With this more ‘customer-centric’
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letters to several sites demanding they review their practices. Coscelli warned the next step would be “to take necessary action – including through the courts – to ensure people get a fair deal”. The CMA is also examining the extent to which a
hotel’s website ranking is potentially influenced by how much commission an OTA earns from a hotel when a booking is made via its portal. Other concerns include hidden charges that are only revealed at the end of the booking process. The watchdog has asked the Advertising Standards
Authority (ASA) to consider how far statements such as “best price guarantee” or “lowest price” were misleading, although the ASA is a non-statutory organisation which cannot interpret or enforce legislation.
PHOTO: SPRINGHILL SUITES BY MARRIOTT
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