August is school holiday time. Many parents will have searched travel websites to plan the family holiday. The travel industry is dynamic and competitive, with a good record of offering choice and value.
But last month the Advertising Standards Authority published a selection of rulings on travel deals that show the dangers of savings claims that can, unintentionally or not, mislead consumers.
The problem we found related to “dynamic pricing”, an approach that’s becoming the norm as technology allows holiday providers to update their prices easily and regularly. Most of us know that prices of the various elements of a package fluctuate in response both to changes in suppliers’ costs and demand. Those price movements aren’t in themselves the problem; indeed, they benefit us when they let us buy a product when the price is low.
The trouble arises when ads for dynamically-priced products include notional “discounts” that can’t be proven. The Advertising Codes require advertisers to hold documentary evidence to prove all claims that are capable of objective substantiation. That holds true even when pricing information is provided by a third party. So how can you prove that the pre-discounted price is a genuine selling price, when prices offered are constantly changing?
Package holidays are a great example, given the moving parts: hotel rates change according to the number of vacancies; flight costs move as seats are bought up; commission rates vary. The travel company pulls together the ingredients into a single package, with added profit margin, and then advertises it to the customer. But because the costs of the component parts can move up and down, it’s not uncommon to find that the overall package cost communicated to the punter changes several times each day.
Last month, the ASA published rulings against TUI and Jet2 because their package ads used wording like “includes £180pp discount”.
While we felt consumers generally appreciate that holiday prices can fluctuate, we found the advertisers hadn’t done enough to prove there was a meaningful saving. In the absence of further information about the basis of the comparator (or pre-discounted) price, they were unable to prove the discount was genuine. The ads had to be changed or withdrawn.
So where’s the mischief?
Well, if we buy a package on the basis of a discount that can’t be substantiated, we’re attributing value to a saving that might not exist.
In effect, we’ve been misled into thinking the package is better value than it is. We also lose the chance to shop around, particularly if the discount is time-limited.
No-one is saying these issues are easy. They’re powerful examples of the challenges that emerge from the changing nature of pricing in an increasingly fast-moving, connected world.
Advertisers have a duty not to mislead, whether intentionally or by accident. Our sister body CAP can help with advice about staying the right side of the line, so my message to advertisers dipping their toe in dynamic pricing is to seek our help first. You really don’t want to get back from your hols to find an ASA investigation in your inbox.
And my message to prospective holiday-makers looking for the best deal? Ask questions about the basis of any discount. Be clear that you should be treated fairly. And if you spot something that doesn’t look right and you’re getting no joy from the advertiser, get in touch with us.