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New guidelines to rein in online travel booking sites

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Study shows Singaporeans have been paying more for trips due to opaque pricing and marketing practices

A sweeping study of the online travel booking space found that some Singaporeans have been paying more than they bargained for when booking trips.

Optional items added on by default and inaccurate "discount" deals are among the opaque pricing and marketing practices found to be used on these sites, the Competition and Consumer Commission of Singapore (CCCS) said yesterday.

The Commission is proposing guidelines on price transparency for all consumer-facing businesses.

The guidelines will provide more clarity on what constitutes an infringement of consumer protection laws, and set out the factors and circumstances that the commission will consider when assessing if advertised prices and related practices are misleading.

The growing use of online travel booking platforms prompted the CCCS to undertake a nine-month market study on the sector here, the findings of which were released yesterday.

It did not name the firms found to engage in the practices flagged as unfriendly to consumers.

The commission's chief executive Toh Han Li told The Straits Times that the consultation period for the proposed guidelines presents "an opportunity for them to clean up these issues".

Under the Consumer Protection (Fair Trading) Act, the CCCS is empowered to investigate errant businesses and file an injunction application against them.

In its study, the commission flagged four common pricing and marketing practices that could mislead consumers:

  • Drip pricing, which refers to fees added on to the advertised price during the transaction process;
  • Pre-ticked boxes that require opting out of additional products or services;
  • Strikethrough pricing, where the one price is crossed out next to a "sale" price
  • Pressure selling, which can create a false sense of urgency for consumers to make a purchase.

Of the more than 500 consumers surveyed, over 80 per cent reported facing a higher price than advertised at checkout for flight and hotel room bookings, largely for fees that were mandatory.

The commission said mandatory fees should be included in the headline price.

The study, conducted between July last year and April this year, comes as more people make their travel arrangements online.

According to a Google-Temasek report last year, the online travel booking market in South-east Asia grew at a compound annual growth rate of 15 per cent between 2015 and last year, when it hit US$29.7 billion (S$41 billion).

Singapore had the highest per capita expenditure in the region for this sector.

The CCCS study looked at the practices of 38 online travel websites and also surveyed 750 industry members.

Members of the public can provide feedback on the proposed guidelines until Oct 21.