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Booking flights and holidays online can often be a source of frustration. Lured by attractive initial prices, consumers frequently encounter significantly higher costs at checkout due to unexpected administrative and booking charges. The Digital Markets, Competition and Consumers (DMCC) Act, enacted in April, aimed to eliminate these supplementary costs. However, a recent investigation by Which? reveals that several prominent travel brands like Megabus, Wowcher, and loveholidays, may be infringing the new regulations.
Hidden Fees and Add-on Costs: Are Travel Companies Breaking the Law?
In certain instances, travelers might pay substantially more than the initially advertised price. Which? scrutinized hotel reservations via comparison platforms such as Kayak and Trivago, uncovering considerable pricing discrepancies between the most affordable and most expensive options, exemplified by the Excalibur Hotel in Las Vegas.
Loveholidays Faces Scrutiny Over Hotel Fees
According to Which?, a week-long stay in July at the Excalibur Hotel was listed at £371 on loveholidays, while Booking.com and Hotels.com quoted prices closer to £700.
- Loveholidays initially stated that its pricing encompassed hotel fees and local tourist taxes.
Hidden Charges Revealed
Upon inquiry from Which?, loveholidays conceded that its listed price did not account for the comprehensive hotel fees factored in by Booking.com and Hotels.com. Instead, customers faced an additional £257 fee upon checkout. This discrepancy stems from the “resort fee” levied by Excalibur, a common practice among hotels in Las Vegas, the US, and the Caribbean, which covers amenities and services, regardless of usage.
While this resort fee structure is permissible, albeit controversial, the new DMCC Act mandates that websites catering to the UK market must transparently display these fees from the outset.
Following Which?’s initial contact with loveholidays in February, the listing was slightly modified to remove the assertion that its price included hotel fees and included a disclaimer stating: “depending on your hotel’s policy, you may also be asked to pay additional hotel fees.” According to Which?, a subsequent check in May revealed that not much had changed. ‘Unlike many of its rivals, it still did not show the resort fee for the Excalibur.’
The company’s current listing states: “Your hotel may charge additional fees, which must be paid there,” without disclosing the potentially significant financial impact of these unavoidable fees.
When approached again, loveholidays did not issue a formal statement but suggested it was exploring options to display resort fees within its pricing. Pending these changes, Which? argues that the company is potentially violating the law.
Which? reports that while lesser-known sites often omit resort fees, prominent platforms like Booking.com, Expedia, Hotels.com, and Lastminute.com typically incorporate them.
Wowcher’s “Administration Fee”
Which? discovered a similar issue on Wowcher. A week-long summer vacation to Malta, advertised at £1,278, incurred a £9.99 “administration fee” during the checkout process.
In February, Wowcher informed Which? that it was reassessing its administration fee practices and committed to compliance with all applicable laws.
However, Which? claims that the £9.99 fee remained in place in May.
Megabus and Booking Fees
Budget coach service Megabus also faced scrutiny from Which?. Initial findings revealed a £5.99 one-way ticket from London to Birmingham which increased by 25 per cent with a £1.50 booking fee at checkout.
Megabus assured Which? in February of its intention to adhere to new regulations.
Despite this, Which? maintains that the £1.50 booking fee was still applied just before payment when revisited in May.
Which? further noted that the fee is not mentioned earlier in the purchasing process, contrasting with National Express, which includes a disclaimer indicating that headline prices exclude a £1.50 booking fee.
Megabus has stated its commitment to clear and affordable travel and plans to update its pricing to display booking fees at the beginning of the process by the end of May 2025.
Enforcement and Potential Penalties
The DMCC Act empowers the Competition and Markets Authority (CMA) to impose fines of up to £300,000 or 10 percent of worldwide turnover, whichever is higher, without court intervention.
Trading Standards also has the authority to enforce these regulations.
The CMA has indicated that its initial focus will be on blatant violations and practices that particularly disadvantage consumers, including hidden fees added late in the purchasing process.
Which? asserts that certain travel brands are exploiting these additional fees to extract more money from consumers, potentially contravening the law.
Expert Opinions
Rory Boland, Editor of Which? Travel, noted that hidden fees and add-ons could significantly alter the price people pay, in some instances by hundreds of pounds. He also said the brands have ignored the new rules that are there to protect customers from being hit with unexpected fees and that they could be breaking the law.
Company Responses
Megabus responded by stating its commitment to affordable and transparent travel and is updating its website to highlight all fees, including the booking fee, at the beginning of the booking process. The website should be updated by the end of the month.
Wowcher stated that it has implemented changes on its website to ensure compliance with the DMCC Act. They stated it has included an estimate of its variable admin fee within its pricing which appears clearly and prominently on the deal pages before the customer reaches checkout. They also said their intention is to ensure the website is clear and transparent for customers, allowing them to make purchase decisions with confidence on the Wowcher platform.