Podcast - Drip-Pricing in Hotels - Could You Be Breaking the Law?

The concept of drip pricing has sparked much debate, yet what does it truly mean for us in the realms of travel, hospitality, and tourism?

In this episode, we are joined by Richard Collie, Managing Associate for TLT LLP a consumer law expert at award-winning law firm with particular specialism in the leisure industry, including advising on consumer regulatory matters looking at investigations brought by the Competition and Markets Authority and deep dive into drip-pricing the practice when a headline price is initially shown to travellers when they are browsing online, where additional elements of the price being added or ‘dripped’ as they move through the checkout process.

Richard sheds light on this pricing strategy, where additional costs are incrementally disclosed during the booking process, often leading to a substantially higher final price than the initial quote, catching customers off guard.

We explore the effects of drip pricing on consumer trust and the competitive landscape of our industry. Such practices can lead to feelings of deception among customers, potentially damaging a brand's reputation and diminishing loyalty. For businesses, while short-term gains may be seen, the long-term repercussions can be severe, including legal challenges and regulatory scrutiny.

The authorities are taking steps to address the challenges posed by drip pricing. We delve into the forthcoming legislation aimed at enhancing transparency and fairness in the pricing approaches of travel-related businesses. The Competition and Markets Authority (CMA) is at the forefront of this, advocating for consumer rights and equitable competition.

Understanding the consumer mindset is crucial when crafting pricing strategies. The way prices are presented can significantly influence buying decisions. Achieving an equilibrium between competitive pricing and transparency is essential for fostering trust.

References:

Drip pricing: Hidden fees for online customers set to be banned

Drip pricing: Three psychological reasons we fall for the technique - and how to resist the it

HO-NO The hidden hotel costs ramping up the price of your stay that can add £100 to your holiday

UKH welcomes measures to ban drip pricing

Government confirms plans to tackle ‘drip pricing’

Note that DBT also commissioned a detailed report estimating the prevalence and impact of online drip pricing in certain sectors – including hospitality and travel.

Listen to the podcast here.

About Haynes MarComs

Haynes MarComs supports businesses with strategic brand marcomms and digital and PR campaigns by taking an holistic approach to sales, marketing and customer delivery. Our aim is to make your business more efficient and productive in your go-to-market strategy to secure the confidence from the market that drives lead generation to meet your commercial goals.