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Hotel booking sites to be investigated

Geoff Riley

27th October 2017

Hotel booking sites are well versed in using behavioural nudges to get people to make a reservation.

Now the UK Competition and Markets Authority is starting an investigation into whether targeting scarcity bias (only one room left at this price), herd behaviour (25 people have booked a room at this hotel in the last twenty-four hours) and loss aversion (book now to lock in this low price) have tipped the wrong side of being fair and ethical.

For the CMA, the probe is fundamentally about information:

"The CMA is concerned about the clarity, accuracy and presentation of information on sites, which could mislead people, stop them finding the best deal and potentially break consumer law."

The CMA will be gather evidence on the extent of

  1. Pressure selling techniques designed to nudge consumers to make a quick bookking
  2. Discount claims: whether the discount claims made on sites offer a fair comparison for customers 
  3. Hidden charges: the extent to which sites include all costs in the price they first show customers or whether people are later faced with unexpected fees, such as taxes or booking fees.

If you are a user of these sites, you might want to contribute your own experiences to the CMA investigation. My own tip is to go direct to a hotel's web site to find the best deals! Or just ring them up!

A mini case study in using virtually every behavioural trick in the book! 

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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