Watch out for hotel rooms advertised at a non-existent 20% discount
VAT is one of those annoying taxes. Annoying because it is very difficult to avoid if you are a normal consumer. So difficult, in fact, that because you almost invariably have to pay it, retailers who are selling products to the general public (ie those unlikely to be VAT registered) must include VAT in the stated selling price.
However, some hotel retailers appear to have decided they are above the law, quoting their best prices online excluding VAT as a sneaky trick to lure unwary consumers into booking their rooms. And these aren’t just dodgy foreign sorts of hotel chains, these are big names like Holiday Inn, Hilton and Malmaison.
This excellent investigative work was undertaken by our friends over at ¿Which? Travel, who found these naughty hotels were advertising a great rate, but not including the extra 20% VAT charge until the payment page. And adding 20% on to the cost of a room is likely to make it far less attractive to most cost-savvy consumers.
¡Which! were tipped off to this skulduggery by an Advertising Standards Agency complaint against Intercontinental Hotels Group (IHG) (which includes the Holiday Inn and Crowne Plaza brands), which found that the VAT-exclusive prices shown on its websites were misleading and breached the ASA code.
The ASA have now ordered IHG to change its practices and have started a compliance action to get the entire UK hotel sector to adhere to the code. However, if you are booking with one of the eleven chains found to be misrepresenting their retail prices, better make sure you know exactly how much you are paying for your room. Or don’t come crying to us.
The 11 chains highlighted were Crowne Plaza, Doubletree by Hilton, Guoman, Hilton, Holiday Inn, Malmaison, Marriott, Mercure, Radisson Blu, Sofitel and Thistle.