Major hotel chains found guilty of adding VAT to online bills just before payment

Published on 1 January 1970 by Raffick Marday

A large number of well-known hotel chains fail to include VAT in the headline prices they advertise on their websites.

prepaid cards on holidayWhile this may help them beat online competition, the breach of both government guidelines and advertising rules is misleading to customers.

According to Which? Travel, 11 out of 24 chains did not include VAT in headline prices online.

The extra 20% was only added on to the total bill further along the booking process, or just prior to payment.

Martin Fisher, consumer expert from the Trading Standards Institute speaking to Which? Travel, said: “The law says that price indications for services such as hotel bookings should not mislead.

“Consumers should know the full price they will pay before they commit themselves contractually.”

He added that hotels were potentially breaking Consumer Protection from Unfair Trading Regulations by failing to display the VAT-inclusive prices.

Which? maintained that the hotels were breaking government pricing guidelines. The Department of Business, Innovation and Skills states that consumers should be given prices including VAT – which should be displayed “prominently” so that consumers can spot them easily.

The rules enable customers to compare prices with ease, and ensure that the true cost is available to them prior to the process of entering arrival and departure dates and checking room availability.

However, the investigation revealed that 11 chains – Crowne Plaza, Doubletree by Hilton, Guoman, Hilton, Holiday Inn, Malmaison, Marriott, Mercure, Radisson Blu, Sofitel, and Thistle – failed to include the 20% VAT charge in the initial prices displayed on their websites.

The sneaky move makes the booking appear cheaper on the hotel’s own website than bookings made through travel websites such as Expedia, which is upfront about VAT charges, including them in its headline prices.

A Which? spokesperson said: “Our research shows that many hotels are breaking the regulations by only revealing the 20 per cent charge later in the online booking process.

“We want hotels to adhere to the rules and be up front about the total cost of booking a room by including VAT in the headline price.

If your holiday budget is suffering after booking a hotel, it may be an idea to use a prepaid card for the rest of your travel expenses as this will prevent overspending.

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