Do you expect to see the full price when you search for hotels online? We found many UK hotel chains breaching government guidelines and advertising rules by not including VAT in headline prices online.
Personally, once I’m on a hotel chain’s website and have found the dates I want, I expect the full and final price I’m going to have to pay to appear immediately.
I certainly don’t expect to see a price that’s a sixth cheaper than the actual amount I’ll have to pay. Yet, that’s what Which? Travel found happens with many hotel chains operating in the UK.
Hotel chains hide VAT fees
We looked at 24 hotel chains to see which of them included the 20% VAT in their headline prices, as Advertising Standards Authority (ASA) rules and government guidelines say they must do. The guidelines from the Department of Business Innovation and Skills state:
‘All prices given to consumers by whatever means, should include VAT. This total price must be displayed prominently so that consumers can see it.’
We decided to investigate the hotel sector after the ASA upheld a complaint that VAT-exclusive prices on websites of Intercontinental Hotels Group and its subsidiary Crown Plaza were misleading and breached the ASA code. ASA has ordered IHG to change its practices.
Unfortunately in our snapshot of London hotels in July we found hotels in 11 of the 24 chains were displaying prices that didn’t include VAT in the first price that was shown. Several hotels didn’t add it until the payment page.
For instance, Hilton and Doubletree added it at stage four of a five-stage booking process. A Hilton Worldwide spokesperson told us it was changing its website so that VAT-inclusive prices are displayed in countries where required by law.
You shouldn’t have to lose sleep over unclear hotel prices
Hotels argue that because many of their competitors don’t include VAT in the headline price, those that do will appear uncompetitive. Personally, I don’t think that’s much of an excuse. Keeping VAT out of headline prices simply look like a device to make room prices look better than they are.
In my view, if there’s a tax that your customers must pay then it should be included upfront so it’s immediately clear how much their paying for a room. Thankfully the ASA has started a compliance action to get the whole hotel sector to fall into line with its code, and expects hotels to change their advertising in late September.
Do you think it’s misleading for hotels to keep VAT out of headline prices? Have you spotted any other practices you think are misleading?
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