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How to make sure your next hotel promotion stays on the right side of the law
Promotions (e.g. around seasons, themes, big events, direct bookings, etc.) are a tried and tested method to boost hotel occupancy. So promotions will undoubtedly be one of the key tactics that hoteliers will rely upon to generate demand throughout 2021, in what is predicted to be the toughest market for travel, tourism and hospitality in a century.
While price-focused promotions are certainly an effective way to generate bookings, they can also land hotels in trouble, if not set out correctly. Over the years, there have been several cases of hotels and other travel businesses around the globe being sued or getting in trouble with regulatory bodies.
It is not always easy to comply with every piece of legislation in the countries or regions that international hotel chains run promotions; indeed, things can get complicated - which is why Fornova employs a team of experts that keep on top of all the different rules and can guide our clients through the process.
In this blog, we look at the main pitfalls when running promotions and explore some of the cases where hotels have fallen foul of the rules.
In general, while legislation is different from region to region, it could be said there is an overarching and clear principle that runs across all of them: consumers should have truthful and accurate information that allows them to make informed decisions. Whether on search page results, OTA promotions, broadcast or in print, hotels must tell the truth and not mislead consumers. So what kind of promotions would get a hotel in trouble? The USA's Federal Trade Commission (FTC) states that a claim can be deceptive if it states or implies something that is not true, or if any relevant information necessary to prevent the claim from being misleading has been omitted.
Prices
When stating prices for rooms or accommodation, hotels must include all non-optional taxes, duties, fees, and charges that apply to all or most buyers. If ‘extras’ like Wi-Fi and breakfast are subject to additional charges, it should be clear that they are not included in the stated room price.
Similarly, marketers should state clearly whether any other taxes (or charges) levied abroad but not paid at the point of purchase, will be payable. This means that the full amount consumers will pay for their stay should be clear to them upfront - there shouldn't be any surprises later in the booking process. It should also be clear when a consumer will be expected to pay.
Related ruling:
The UK's Advertising Standards Authority (ASA) ruled against TUI Travel Plc because a Pay at hotel claim did not make it sufficiently clear that this option did not apply to non-refundable bookings. You can read more about this case here.
Price availability and using "from"
Demand is constantly changing and promotions can have a very limited shelf life, which means that usually only a certain percentage of inventory will be made available at the promotional rate. If this is the case, hotels must ensure the rate is promoted as the rate advertised. Hotels must also be able to prove that they have a significant number of rooms available at the "from" rate.
Related ruling:
A complaint about an advert for a holiday which stated £377*pp incl. flight & hotel was upheld in 2017, because the price was both subject to change and had limited availability, but was not described as a "from" price. The ASA considered that the ad should present the price as a "from" price, and include a prominent statement indicating that prices were subject to change and had limited availability.
In a separate case, an advert for Mercury Holidays which quoted a "from" price for a holiday, was considered misleading by the ASA. Whilst it was acknowledged that, because they were working with third-party content, they would be unlikely to be able to monitor real-time availability of flights, they considered that the advertisers should nonetheless have been able to demonstrate that a quoted price was available at the time the ad appeared, and in reasonable quantities. Because the ASA had not seen evidence to demonstrate that a reasonable quantity of holidays were available at the advertised "from" price at the time the ad appeared and because the ad did not make sufficiently clear that the "from" price was subject to change and had limited availability, they concluded that the ad was misleading.
Dynamic pricing
The days of adjusting prices weekly, or even daily- are fast becoming a thing of the past. If hotels are to remain competitive their rates must be dynamic, changing multiple times a day and being adjusted by target region and audience. It is the hotel's responsibility to ensure that all price statements are accurate and, if making savings claims, to hold evidence to demonstrate that a pre-discount price was genuine.
Related ruling:
The ASA upheld a complaint about a TUI advert in 2017 which was promoting a sale on discounted holidays because, while they felt consumers generally appreciate that holiday pricing is fluid and that prices can fluctuate, the advertisers could not provide sufficient evidence to substantiate that the savings claimed were genuine. Similarly, in 2017 the ASA ruled that a flight listing on the advertiser's website was misleading because the advertisers had not demonstrated that the price listed was genuine. The adverts were also criticized for failing to make it sufficiently clear that the prices were subject to change, how consumers could find the most up-to-date price, or that the ads referred to the price at the last update and when that update took place.
Third-party media
When running display ads that promote a product in a third-party space and encouraging consumers to seek further information, you should:
Hold evidence to prove that the price in question was available to consumers at the time the ad appeared for at least 10% of the dates advertised.
Ensure you take publication lead times into account; if the relevant price is very difficult to achieve very soon after publication, the marketing communication is likely to be considered misleading.
Make clear the date on which the "from" prices are accurate if this isn't clear from the ad's publication date.
Describe prices that are subject to change and have limited availability as "from" and include a prominent statement to make this clear. Clarifying text such as "subject to change" and "limited [or extremely limited] availability" should be included, where necessary.
Amend or withdraw the ad if you become aware that a price is no longer available.
Remove the risk from your promotional strategy, get in touch with our team today and discover how we can help you generate demand while maximizing your marketing spend's ROI and adhering to all legal and regulatory standards.
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