Travel agents have expressed frustration and concern over new rules designed to crack down on misleading practices such as hidden fees, partition pricing, drip pricing and fake reviews.
The rules, which came into effect in February, puts the onus on travel agents to obtain accurate pricing from operators and reflect this to their customers. If they don’t, they face being fined by the Competition and Markets Authority (CMA) up to 10% of global turnover.
At the Advantage Travel Partnership conference in Madrid last week, Travel Trade Consultancy Director Martin Alcock said agents have been ‘caught in the crossfire’ under the new rules, brought in under the Digital Markets, Competition and Consumers Act (DMCCA).
He said the legislation was primarily introduced to ‘weed out’ misleading OTAs trying to get the cheapest price at the top of comparison sites, but warned the CMA is ‘gunning for travel’ with 17 of their first case letters going to travel companies.
He said all supply chain costs have to be included in the overall figure, even when they are not paid directly to agents but are instead payable locally, such as resort fees or tourist taxes. Because of this, the final price can be difficult for agents to calculate.
Meanwhile, travel lawyer Jo Kolatsis said the CMA has made it clear it will be looking for culprits, and warned the travel industry is ‘low-hanging fruit’ for fines because of complex pricing structures.
Sarah Pratt from Sarah’s Instant Holidays, which is part of the Vertical Travel Group, said she’s ‘glad things are in force’ to promote transparency, but she remains ‘extremely worried’ about the potential to be fined.
“I don’t even want to be questioned so I have been working hard to make sure my wording stays the same on all ads, clear and precise. The layout of my adverts, the titles of adverts, the whole ‘don’t dangle a carrot’ is firmly in my mind,” she said.
“Also [I’m] simplifying my ads so there is all the information, but not too much – as on a social media page, no-one wants to read a book!”
A key concern amongst agents is the reliance on supplier data and the risk of inaccuracies feeding through to customer pricing.
Westhoe Travel Director Graeme Brett said: “We have been making sure everything we do is compliant. However, there are many suppliers sending copy-and-paste posts that are not compliant and make no mention of local charges and taxes.”
There.travel Managing Director Jake Todhunter agreed, saying: “The issue is that we’re reliant on the information being posted to us from the suppliers, so I’d be worried if it happens that that information is wildly inaccurate one day and it led to enforcement against us.”
He added: “We’ve done a training session with our homeworkers to make sure that they understand the importance of the new rules and how best to utilise the tools we have to make sure they/we stay compliant.
“We’re lucky to use TARSC as our CRM/booking system which has helpfully added a field on the quote builder for fees and taxes and who they are payable to, so our quotes going out to customers are fully transparent where information is available to us.”
But he added: “I worry that if enforcement becomes too strict people may simply advertise less which would be bad for the industry as a whole.”
Mark Bratt Travel Director Scott Hadden highlighted the additional work involved from the operator’s perspective. He said: “Our trips are hugely complex so pulling all this together into one place with any degree of accuracy is quite time consuming – often such fees could be in three or more currencies.
“Overall, I believe more consultation should be done to find the balance that works for both the industry and the consumer. Given the time and costs it will take to implement, it is also likely to drive holiday costs up further.”
Another agent called for more transparency from suppliers, saying: “The only thing I want to see is to have all of the suppliers list the additional fees in the same way.”
To help agents stay on top of the new requirements, Jo advises agents to ‘look at all your practices’ and ‘focus on keeping clear records of how pricing is set’.
She said the key is being able to show how an advertised price is built – whether it is based on date-specific criteria, how many travellers it includes, and what charges are included.
“Consumers are being wrapped in cotton wool more and more and you have to keep on top of it,” she warned.
Where prices are not ‘reasonably calculable’ at the time, such as tailor-made bookings, agents must be clear with customers about ‘what they need to do or understand in order to find out what those charges are before you give them that price’, whether based on hotels, flights or other components.
She stressed that this needs to be recorded, particularly in marketing and advertising, which ‘always tend to be the ones that get caught out’, adding that the CMA can now use new AI tools to identify issues quickly.
Finally, Jo reassured agents who are investigated not to panic.
“Normally when you engage with them, it’s much better than trying to combat it. Early engagement is always a good way of dealing with it,” she said.
