FCCA report: Consumers and hotels benefit from hotel booking sites – Responsibilities unclear in problem situations

The Finnish Competition and Consumer Authority (FCCA) has studied the experiences both consumers and hotels have of hotel booking sites. The views were mostly positive. However, one quarter of consumers had also encountered problems related to their bookings. Most hotels that responded to the survey regarded the booking sites to limit their freedom of operation.

The FCCA has followed the proliferation of the use of platforms in the operating environments of both consumers and enterprises. In June 2017, the FCCA published a study examining platforms from the perspectives of competition law and consumer rights. To get practical examples of the impacts of platforms, the FCCA conducted studies on the views of both consumers and hotels on hotel booking sites.

The survey targeted to consumers was responded to by 1,004 18-79-year old consumers who had booked a hotel room for themselves or their immediate circle over the past 12 months using a hotel booking site. Most of them considered the price comparison sites useful and reliable. They believed that the sites made the selection of the hotel room easier and offered information about different hotel alternatives. The most often used and best-known sites were Booking.com and Hotels.com.

The most frequent users of the booking sites were young people, students and people living in cities, whereas the oldest respondents, pensioners and those living in rural areas used them the least. When comparing and booking hotels, consumers usually used more than one booking site. When booking Finnish hotels, a third of the respondents also used the hotel’s own website or other sales channels.

The consumers had differing opinions on how clearly the booking sites displayed the prices and presented the contract terms. They were also often in disagreement over the online payment security of the booking sites and the accuracy of attractive offers.

Based on the responses received, consumers seemed to be satisfied with the booking sites as long as they did not need to make any changes in the bookings or contact the customer service. Almost one third of the respondents had had different problems in either the booking stage or when they had reached the hotel.

Hotels also had critical views

At the same time with the consumer survey, the FCCA also asked hotels and hotel chains for their views of booking sites. When drawing up the survey, the FCCA took advantage of a similar survey conducted in ten other EU states in 2016.

Four-fifths of the 118 hotels or hotel chains that responded the survey considered booking sites either very important or important. Almost all respondents believed that booking sites increased the visibility of their hotel. On the other hand, the majority of them was of the opinion that the booking sites limited the freedom of operation of their hotels. Furthermore, they did not consider the provision being paid to booking sites to correspond with the benefits they gained from the site.

Most hotels offered their rooms on several booking sites. Some of the hotels had offered rooms at a lower price on some booking sites than on others or on their own website. On the other hand, a small share of the hotels reported that they had offered their rooms at a higher price on some booking sites than on their own website, at least for a short period of time. The hotels that had offered a different price on the booking sites than on their own website had done that rather seldom, and the difference in prices had been small. Most of the hotels offered the same price on all booking sites and on their own website. As reason for this they said that contracts would not allow using different prices on different booking sites. Some of the respondents also suspected that booking sites would punish them for different pricing. On the other hand, the responses revealed that all hotels were not fully aware of what kind pricing options they had for their rooms in different channels.

It came up in responses given by both consumers and hotels that in problem situations it was often unclear who was the responsible party. The consumers did not know when they should seek compensation from the booking site and when from the hotel. Furthermore, they could not always tell the difference between booking sites and comparison sites, where people can only compare different alternatives, but not make any actual bookings. Almost every tenth consumer could not tell or remember which site they had used for making their latest booking. In addition, not all hotels were well aware of all the channels where their hotel rooms were being offered.