The European Commission Directorate-General Justice and Consumers has published a new behavioural study, prepared by Open Evidence together with London School of Economics and BDI Research, on advertising and marketing practices in travel booking websites and apps.
The Internet has dramatically changed the tourism sector in recent years. The rapid developments of the market have raised concerns over the potentially harmful commercial practices used by online platform intermediaries, which undermine consumer trust in the online travel sector. The European Union (EU) has already put in place major pieces of legislation to govern consumer rights, unfair commercial practices and unfair contract terms, including the Package Travel Directive 2015/2302/EU and the New Deal for Consumers, which form the backbone in the provision of consumer protection in the area of online travel services. Nevertheless, a number of consumer policy challenges remain due to the fast-changing pace of the industry. Several EU Member States (MS) have launched initiatives to better understand and regulate online platforms but leaving regulation of the intrinsically cross-border online economy to MS carries the risk of internal market fragmentation.
In light of these developments, the study tried to better understand the interactions between online travel websites and consumers, while keeping in mind the overarching policy goal of increasing consumer trust and transparency. As part of the study the problematic drivers of consumer decision making and in particular were identified, the problematic commercial practices that are widely used or emerging in travel booking websites and apps; the documentation of the impacts that these practices have on consumer’s perceptions and economic behaviour; and the identification of factors that can influence their impact, plus the potential remedies available.
The main findings revealed that the consumer perception of online travel services was generally very positive, but that some practices were deceitful to the consumers. Results from the behavioural experiments revealed:
- A heterogeneous impact of commercial practices on selection or purchase intentions.
- A significant impact of commercial practice on purchase intent and limited effectiveness of protective measures.
- Commercial practices operate as an anti-competitive tool.
We believe that the EU must find answers to new consumer policy challenges while ensuring a fair single market for both consumers and businesses. Given the findings of the study, policy options have been provided to the Commission in order to:
- Better enforce existing EU consumer protection rules;
- Enhance consumer awareness to facilitate informed choices; and,
- Promote industry-wide standards and improved business practices to create a level playing field.
The complete report can be accessed in the following link.
