Travel marketing: Pricing


INSIGHT
Published
Mar 26th '24
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When stating prices in travel marketing advertisers have a responsibility to ensure that these will not mislead the consumer.

 

Non optional costs and charges

In addition to any pricing legislation marketers should comply with rule 3.18 of the Committee of Advertising Practice (CAP) Code which requires marketers who quote prices to include all non-optional taxes, duties, fees and charges that apply to all or most buyers. VAT-exclusive prices may be given if all those to whom the price claim is addressed pay no VAT or can recover VAT, but such VAT-exclusive prices must make it clear who this price applies to, and must be accompanied by a prominent statement of the amount or rate of VAT payable. See Compulsory costs and charges: VAT.

 

In the case of flights, taxes and other costs (Swiss International Air Lines AG, 30 January 2013), such as Air Passenger Duty, fuel supplements, security charges (whether they are levied in the UK or abroad) and other charges paid at the point of purchase of the ticket, must be included in the price offered to consumers. Other compulsory charges, such as Security Airline Failure Insurance (SAFI) must also be included (Specialist Holiday Group Ltd, 13 October 2004). The Advertising Standards Authority (ASA) has ruled that, irrespective of how clear the qualification is, quoting a headline price that excludes compulsory taxes and duties that are payable when travellers buy their tickets, is unacceptable. If marketers want to state inclusive and exclusive prices, greater prominence should be given to the inclusive price.

 

If it is not possible to calculate fees in advance, then the ad must make it clear that fees apply, and how these fees are calculated, to ensure that consumers can work this out before making a decision to purchase.

 

Marketers should ensure they hold documentary evidence to show that quoted prices include all non-optional fees. A complaint about an ad which offered return flights from London to Sydney “from £594” was upheld because the prices quoted did not include all charges (Polani Travel Ltd, 4 April 2012).

 

In 2020 an ad listing various promotional prices for full board cruises, which did not include an optional daily service charge, was found to be compliant with the Code. The service charge was automatically added to customer’s on-board accounts, but they were not required to pay the charge and could change or remove it at their discretion. The ASA therefore concluded that the omission of the optional gratuity charges in prices for the cruises was not misleadin. (Sunshine Cruise Holidays Ltd, 26 February 2020).

 

Saving claims

Marketers making savings claims against a reference price must have evidence to demonstrate that the reference price was genuinely the price at which the products would have otherwise been sold. The ASA upheld a complaint about ads for Purpleholidays.com, because they did not have evidence to substantiate that a “was” price was the genuine usual selling price, and so could not demonstrate that a saving claim was accurate (Purpleholidays.com, 30 August 2017).

 

In 2020 a complaint about an ad for a travel provider, which featured the savings claim “Regular price £1,129…Your saving -£1,000”, was upheld. The ASA had not been provided with any evidence demonstrating that the savings claim was achievable at the time and understood the ‘regular’ price was not the genuine usual selling price for the advertised tour. The ASA considered the basis of the price comparison had not been clearly presented in the ad, and also the savings claim in the ad, which appeared in a magazine, was likely out of date by the time it was viewed. The ruling therefore concluded that the savings claim was misleading. (RSD Travel Ltd, 11 March 2020).

 

Marketers will be expected by the ASA to provide accurate evidence of advertised prices, and it may be useful for marketers to ensure that they have reliable processes in place to monitor these.

 

In addition to the relevant rules on pricing and comparisons in Section 3, the ASA will take the CTSI Guidance for Traders on Pricing Practices into account when considering complaints about hotel prices and savings claims.

 

Dynamic pricing

The ASA appreciates that prices can fluctuate, and that dynamic pricing often means that the prices for the same holiday can change multiple times in the same day. The area of dynamic pricing is an evolving one, and the ASA does not have detailed precedent on this; however where marketers use dynamic pricing it is still their own responsibility to ensure that price statements are accurate and, if making savings claims, to hold evidence to demonstrate that a pre-discount price was genuine.

 

In 2023 the ASA investigated two ads for a return flight to Tel Aviv, priced at £440, on both a paid-for search listing and a booking page on a travel agent’s website. The complainant had booked and paid for the flights but was later informed a £50 discount referenced on the booking page was no longer available, and they would need to pay an additional £50 to maintain the booking. Whilst the ASA acknowledged that flight prices through third parties were liable to fluctuate, they considered advertisers were nevertheless responsible for ensuring that stated prices were genuine. Because the flight was not available at the price quoted in the ads, the ASA concluded that the price claims were misleading. (BBNJ Ltd, 21 June 2023).

 

An ad for Mercury Holidays which quoted a “from” price for a holiday, was considered misleading by the ASA. Whilst the ASA acknowledged that, because they were working with third party content, they would be unlikely to be able to monitor real time availability of flights, they considered that the advertisers should nonetheless have been able to demonstrate that a quoted price was available at the time the ad appeared, and in reasonable quantities. Because The ASA had not seen evidence to demonstrate that a reasonable quantity of holidays were available at the advertised “from” price at the time the ad appeared and because the ad did not make sufficiently clear that the “from” price was subject to change and had limited availability, they concluded that the ad was misleading (Mercury Holidays 03 July 2019).

 

Additionally the ASA upheld a complaint about a TUI ad offering a sale on holidays because, while they felt consumers generally appreciate that holiday pricing is fluid and that prices can fluctuate, the advertisers could not provide sufficient evidence to substantiate that the savings claimed were genuine (TUI UK Ltd, 5 July 2017).

 

Whilst making savings claims based on dynamic pricing can be difficult, the ASA has seen this done in a compliant way. Another TUI ad , which offered a £100 promotional discount code to be used against holidays did not breach the Code because, whilst prices might fluctuate, by applying the discount code at checkout consumers would be paying £100 less than they would otherwise have paid at that same time, before this discount was applied (TUI UK Ltd, 5 July 2017).

 

Price availability and using “from”

Given the limited shelf-life of the product and the speed with which the market responds to changes in demand, seats on flights to the same destination usually differ in price. If all flights are not available at the quoted fare, marketing communications should state prominently that prices are “from £X”. A complaint about an ad for a holiday which stated “£377*pp incl. flight & hotel” was upheld in 2017 because the price was both subject to change and had limited availability, but was not described as a “from” price. The ASA considered that the ad should present the price as a “from” price, and include a prominent statement indicating that prices were subject to change and had limited availability. (Teletext Holidays, 9 August 2017).

 

In 2021 a complaint about an ad for return flights to Orlando, with a specific price claim of ‘£464.50’, was upheld because the price had not been described as a “from” price, and there was no indication within the ad that it was subject to change or availability. The ASA considered the ad should present prices that were subject to change as “from”, and clearly state there was limited availability, as well as state when prices were last updated. They also expected the advertiser to also ensure they had processes in place to update prices frequently. (Flights & Holidays UK Ltd, 6 January 2021).

 

In the past the ASA has applied a rule of thumb that 10% of the products or services advertised should usually be available at the “from” price based on the 2010 BIS Pricing Practices Guide. In 2016 the CTSI published new Guidance for Traders on Pricing Practices. This new guidance states that, when using “from”, advertisers must ensure that a significant proportion of the product or service is available at the lead in fare.

 

Whilst the current guidance no longer uses the 10% rule, and instead states that a significant proportion should be available, it offers no further guidance on what is considered a significant proportion, and the ASA will investigate this on a case by case basis.

 

The ASA investigated a promotional email with the claim “FROM JUST £39 EACH WAY*” for Eurostar tickets to Paris, Brussels or Lille, in “August or September” 2023. Although the advertiser provided evidence that thousands of tickets at £39 had been made available to the three destinations, the data showed the £39 fares made up a very small percentage of the total number of seats available for standard class travel in the promotional period. The ASA considered that consumers would understand the claims to mean a significant proportion of fares at £39 would be available to the three locations, across a range of dates and times within that period, and that they would expect to have a reasonable chance of obtaining a seat at that price. Because a significant proportion of tickets had not been available at the “from” price of £39, the ASA concluded the claims were misleading. (Eurostar International Ltd, 3 January 2024).

 

In the event an advertised fare fluctuates or becomes unavailable, marketers should ensure that they make clear in their communications that the advertised fares are extremely limited or could be withdrawn at any time. If a fare does become unavailable, ads stating this price should be amended. The ASA upheld a complaint against an advertiser where it continued to present the prices for flights it knew were no longer available.

 

The ASA upheld a complaint against an advertiser where it continued to present the prices for flights it knew were no longer available. The fact the advertiser relied on third party information, did not mean it was no longer responsible for the prices it presented. (Moresand Ltd, 22 November 2017).

 

The ASA understands that there will be circumstances under which an offer has become unavailable, but nevertheless expects marketers to give consumers a realistic indication of their prospects of being able to take up the offer.  See Travel Marketing: Availability.

 

Offering “free” flights and seats

Marketers (whether they are in the travel industry or not) wanting to offer ‘free’ flights or seats can do so only if there are genuinely no costs to the consumer, such as taxes or charges (Aer Lingus Ltd, 21 January 2009). This will be the case if the words or phrases used in the ad are synonymous with the word free, even if marketers do not directly state “free”. Words which are likely to be interpreted by consumers as meaning free include “giveaway”, “gift”, “pay nothing”, and similar .

 

For example, an ad stating “3,260 tickets to give away!” was found to be in breach of the Code as taxes and surcharges had to be paid in order to claim the prize. Although the ad stated that taxes and surcharges were excluded, promotions where consumers incurred a cost to claim a prize are prohibited by the Code. (Cathay Pacific Airways Ltd, 20 December 2023).

 

Claims which are likely to be acceptable are “tax only”, “flights for the cost of the tax” or similar, as are more subjective claims such as “cheap flights” and “bargain fares.”

 

If a marketer covers the costs of taxes or fees, meaning that the flight is genuinely free, it is likely to be fine to state free flights or seats. In 2013, the ASA ruled that an ad which stated, “Fly for Free – If we can’t find you a cheaper airfare in the same cabin, you’ll fly for free!” was not misleading because the marketer did award free flights where they could not beat a quoted fare, in line with the claim.  (Flight Centre (UK) Ltd, 11 September 2013).

 

See also Use of “Free.

 

Credit and debit card fees

The Consumer Rights (Payment Surcharges) Regulations brought into force a ban on surcharges on consumer credit and debit cards with effect from 13 January 2018. This means that merchants must not charge consumers a fee in addition to the advertised price of a transaction on the basis of a consumer using a credit or debit card. This applies to travel marketing and marketers should not charge any additional fees based on their method of payment. 

 

We would urge marketers to seek legal advice on whether specific charges they wish to apply to consumers comply with the legislation.

 

Taxes levied abroad

Marketers should state clearly whether any other taxes or charges levied abroad but not paid at the point of purchase, are payable. These should be presented clearly and immediately. If these prices cannot be calculated in advance, the ad should make it clear that they are excluded from the price, and state how they are calculated.  The ASA are likely to expect advertisers to give an indication of the applicable charges. Even if prices are subject to change, an ad should state the current charge to give an indication of the price, making it clear that the charge may be subject to change.

 

A complaint about an ad for a holiday which stated “includes all taxes and fees” was upheld because the consumer had to pay a compulsory resident fee on arrival at the hotel. The ASA considered that, because the resident fee could not be paid at the time of booking and because exchange rates would fluctuate, the charge could not be accurately converted into pounds sterling in advance, and therefore could not be included in the total quoted price. However, the amount of the resident fee was considered to be information that consumers would need in order to make an informed decision and as such should have been clearly presented alongside the price claim (Expedia Inc, 15 October 2014).

 

Similarly, a complaint about an online ad for a hotel, which stated a total price that did not include the cost of additional taxes, was upheld by the ASA in 2018. The ad did state that the hotel prices quoted may not include applicable taxes which would be payable directly at the hotel, however the ASA did not consider this sufficient, because the fact that the fees were subject to change did not preclude the advertiser from presenting the costs at the time the booking was made, and making clear that those fees were subject to change (Sunshine.co.uk, 04 July 2018).

 

If fares are subject to foreign-levied taxes or charges payable at the point of purchase, marketers should state the exact amount consumers will have to pay. If marketers are not prepared to absorb the profit or loss that might result from changes in the level of taxes, or changes in relevant exchange rates between the time of advertising and the time of purchase, marketers should clearly state (in a bartnote) that taxes, and applicable exchange rates were correct as of a stated date, but may vary.

 

One marketer who advertised multiple departure points and multiple destinations, argued that it was impracticable to include all the taxes duties and supplements because they differed depending on the route chosen. However, the ASA ruled that the marketer should state the lowest inclusive price for which consumers could travel and pre-fix the claim with the word ‘from’ (BMIbaby.com, 5 November 2003).

 

See Compulsory costs and charges: general.

 

See Advertising Guidance on Travel Marketing and other “Travel” entries.

 

Source: CAP

 

About CAP

The Committee of Advertising Practice (CAP) is the sister organisation of the Advertising Standards Authority (ASA) and is responsible for writing the Advertising Codes.

 

Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA.

 

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