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Price transparency in travel industry has improved but still not enough

12-12-2013

The Netherlands Authority for Consumers and Markets (ACM) has established that transparency about prices in the travel industry has improved. This is the result of the steps that ACM took earlier this year urging the travel industry to increase price transparency.

Anita Vegter, Member of the Board of ACM, explains: “By now, many businesses in the travel industry have already adjusted their prices and booking processes, making everything more transparent for consumers. This is a wonderful result. And with regard to businesses that do not comply with the rules yet, we will be taking enforcement actions against them. This may lead to fines. We will start with the biggest players in the industry.”

Not all businesses in the travel industry are convinced that consumers are better served with clear prices. ACM continues to come across providers that add the unavoidable costs to the total price very late in the booking process. Items such as mandatory cleaning costs, local taxes, and other unavoidable costs that result in a considerably higher price are displayed at a very late stage in the booking process. ACM will take firm action against such practices because, among other reasons, they reduce competition and transparency in the industry.

Background of focus on prices in the travel industryI

In early-2013, ACM issued rules to have the travel industry make prices more transparent. After all, consumers often see price as one of the most critical aspects to base their purchase decisions on. These rules are:

  • It must be possible to book the trip for the advertised price;
  • Checkboxes for optional products and services cannot be pre-checked;
  • All unavoidable costs must be included in the base price;
  • Any variable costs must be mentioned with the advertised price.

Through an awareness campaign on its consumer information portal ConsuWijzer, ACM has informed consumers, and has received more than 200 indications about businesses that did not list their prices correctly.

In recent months, ACM inspected businesses in the travel industry such as providers of accommodations, package tours, and air tickets. Next, ACM sat down with providers that did not or not entirely comply with the rules, and made arrangements about implementing the necessary adjustments. In addition, trade associations ANVR (Dutch Association of Travel Agents and Tour Operators) and Recron (Dutch Association of Businesses in the Recreational Sector) actively supported ACM’s campaign.

ACM’s campaign coincided with a campaign of the Dutch Consumer Association for clear prices in holiday parks. All of these measures combined have resulted in the travel industry promising that it will no longer pre-check checkboxes for optional products or services from October 1. Furthermore, a considerable share of the providers lists the additional costs such as reservation and booking costs in the base price more clearly now. ACM will continue to keep a close watch on developments, for example, by analyzing indications submitted to ConsuWijzer.