News

A UK Hotelier’s Guide to Promotions & Pricing in 2019

A UK Hoteliers Guide to Promotions & Pricing in 2019

Last month’s announcement that, after an investigation by the CMA (Competition and Markets Authority), third parties are committing to changing their selling habits was welcome news for UK hoteliers. Finally, we could be moving towards a more level playing field.

NB: This is an article from 80 Days

However it’s important to remember that we also have a responsibility to present our pricing and offers responsibly on our own websites. Indeed, as the CMA have recently clarified, they’ll be keeping close eye on “all online accommodation booking sites which offer services to UK consumers”, not just the OTAs.

So what can you do to ensure your offers are compliant with the CAP’s (Committees of Advertising Practice) advertising codes of conduct and avoid an ASA (Advertising Standards Authority) complaint being upheld against you?

We’ve compiled the guidelines below and, while not exhaustive, they should help steer your promotional strategy in 2019.

‘FROM £X’ AND ‘UP TO X% SAVING’

For example, ‘From £150 per night’ or ‘Save up to 40% on stays in March’

The regulations state that advertisers/hoteliers must be able to demonstrate that a significant proportion of products are available at the stated “from” or promotional price.

Of course, ‘significant proportion’ and ‘availability’ are both open to interpretation. The ASA state that “consumers should have a reasonable chance of obtaining the products at the advertised price”. But what can be considered ‘reasonable’?

Historically the ASA has adopted a rule-of-thumb that 10% availability of an offer is an acceptable threshold. In 2016 the CTSI (Chartered Trading Standards Institute) added a little further clarification that, regarding from/up-to pricing;

“You should only make such a claim if the maximum reduction quoted applies to a significant proportion of the range of products that are included in the promotion.” Source: Guidance for Traders on Pricing Practices

Unfortunately, an binding figure of what is considered ‘reasonable’ doesn’t appear to exist. The ASA does state that the “current guidance no longer uses the 10% rule” and that there is “no further guidance on what is considered a significant proportion”.

So while we can’t offer categorical advice here, it would seem wise to ensure at least 10% of your room stock is available at the advertised offer price, to ensure your guests aren’t disappointed while making an effort to comply with CAP guidelines.

A word of caution, in the absence of using “from” or “up to” in relation to pricing the ASA has concluded that, based on a previous upheld complaint, consumers are likely to interpret the claim as meaning all products will be made available at the discounted price. So for example, if you advertised ‘rooms at £100’ – all rooms must be £100. Of course, we know that this is challenging with proactive revenue management, so unless you have a very rigid rate strategy, it’s probably best to ensure you include ‘from’ when mentioning rates.

TIME DEPENDENT OFFERS

For example, ‘Summer special – rooms for £160’

When referencing offers, you must make it clear what time period your offer applies to. In the example above, it would be advisable to specify what days/months ‘Summer’ constitutes – although this can certainly be challenging in the UK!

In terms of availability, the ASA have previously advised that hotels should ensure that offer availability “should be spread evenly across the advertised travel period” – for example, if you have a ‘Summer Sale’ that spans June – August you should ensure an even spread of availability, advisable to be at least 10%, across this time frame to make a reasonable attempt at compliance with CAP’s advertising codes.

Hoteliers should also exercise caution that any messaging that references urgency and time-dependency doesn’t cross the line into misleading pressure selling. For example, you must be able to provide an “adequate body of evidence” when claiming a high level of interest in an offer from other consumers – a key point highlighted by the CMA in the recent investigation of OTA selling habits.

LOCATION SPECIFIC OFFERS

For example, ‘stay at [hotel brand] in February for 30% off’ (where the offer isn’t available at a select property)

Specifying the location of any promotions or offers is especially relevant if you’re a group of hotels. Take care in ensuring that you make it clear where an offer is available – is it group wide or only available at select properties?

A previously upheld ASA complaint noted a hotelier advertised an offer as “ANY WEEKEND ANYWHERE SALE, SAVE UP TO 33%” but further terms and conditions clarified that it only applied to UK, Europe, Middle East and Africa – thus not available ‘anywhere’.

COMPARATIVE OFFERS

For example, ‘our hotel is 50% cheaper than [hotel brand]’

Comparative advertising is when you draw comparison to a competitor and can be defined as “any advertising which explicitly or by implication identifies a competitor or goods or services offered by a competitor”.

A bold and complex strategy, comparative advertising must be handled with care. If you’ve stated who your competitor is within an advert, or they’re identifiable by implication, you must ensure you compare your competitor’s most similar product or service, or clearly outline the differences between them to ensure that the basis of the comparison is made clear for customers.

It’s also worth noting that you’re expected to monitor the comparison made and ensure that, if a price has changed and/or the comparison becomes inaccurate, you do everything within your power to remove or amend the communication.

Helpful further guidance on comparative advertising within the context of travel can be found here.

NO HIDDEN CHARGES

E.g. ‘rooms from £150’ (with an unadvertised, non-optional £20 breakfast added during booking)

Of course, surprise non-optional costs during the booking process are likely to affect the conversion rate of your website but they may also put you at risk of being seen to mislead customers. Any pricing mentioned within an offer should include any non-optional charges, including taxes, duties, fees and supplementary costs.

An interesting development is the proposed introduction of a ‘tourism tax‘ for Edinburgh, and potentially other UK cities. One would assume that hoteliers would be required to include this within their pricing and offers to ensure that guests aren’t surprised by a ‘hidden cost’ upon arrival or checkout.

When it comes to the inclusion of VAT, the ASA advise that “VAT exclusive prices can only be given if all those to whom the price claim is addressed pay no VAT or can recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable”.

BEST RATES GUARANTEED OR BEST RATES GUARANTEE?

Does your hotel offer a ‘Best Rates Guarantee’? Is it described as a ‘Best Rates Guarantee’ or ‘Best Rates Guaranteed’?

CAP’s guidance on ‘Lowest Price Claims and Promises‘ draws clear distinction between the use of the claims ‘lowest prices guaranteed’ and ‘lowest prices guarantee’ – the former constitutes a claim that the product cannot be bought as cheaply or cheaper elsewhere; the latter is a price promise. If you’re confident that your rates cannot be shopped cheaper elsewhere, then you could legitimately use ‘guaranteed’. However if you, like many hoteliers, are being undercut by third parties misrepresenting your rates, then you may want to consider the use of ‘guarantee’ as a price promise that you’ll offer a better rate.

When making a price promise, CAP note in their guidelines that;

  • Marketers that claim to offer “the lowest prices” (or “the best prices”) should be able to beat, not merely match, competitors’ prices.
  • Any significant conditions attached to price promises should be stated clearly.
  • If a “lowest price” claim is based on monitoring carried out on a specific date, the ad should include that date. Monitoring should be carried out by the marketer as close as possible to the appearance or distribution date of the ad.

There are a number of other considerations when presenting a price promise to your customers. For those unsure about the validity of their best rates guarantee(d), it’s worth reading the full guidelines from CAP.

IN SUMMARY

While these guidelines only apply to the UK the principle of providing clear and transparent pricing must be universally adopted by both third parties and hoteliers to ensure guests have trust in the hospitality industry as a whole.

Read more articles from 80 Days

Related Posts

Comments are closed