Background
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
A TV ad and website promoted holiday deals:
a. A TV ad, seen 27 December 2012, featured the advertisers' web address on screen and showed a group of holiday-makers in a sunny location queuing to board a Thomas Cook coach. A man proceeded to pull the valve out of the back tyre with a pair of pliers and smiled as he walked away from the coach, which now had a flat tyre. The voice-over stated, "Holidays you won't want to return from. Now with a guaranteed 10% off before the end of January. Don't just book it, Thomas Cook it." On-screen text stated "Guaranteed 10% OFF before the end of January". Smaller on-screen text at the bottom of the screen stated "Book by 31st January 2013. Selected holidays departing 1 May - 31 October 2013. Conditions apply".
b. Claims on www.thomascook.co.uk, seen around 6 January 2013, stated "SALE NOW ON Guaranteed 10% OFF Summer holidays*". A link stated "10% off*" and certain holidays were shown alongside a red crescent "10% Off" banner.
Issue
1. One viewer challenged whether the claims "10% off before the end of January" and "Guaranteed 10% OFF before the end of January" in ad (a) were misleading, because a holiday they had been monitoring before the promotion (in Lido de Jesolo) had not changed in price despite their understanding that it had been identified as being part of the offer.
2. One complainant challenged whether the claims "Guaranteed 10% OFF" and "10% off" in ad (b) (particularly in relation to holidays to Sharm El Sheikh) were misleading on the same basis.
Response
1. Thomas Cook Retail Ltd (Thomas Cook) said there was insufficient time in a TV ad to present the full terms and conditions of a promotional offer and for that reason the on-screen text indicated that the offer applied only to selected holidays departing within a specified period and that terms in addition to those stated might be applicable. They said the ad also indicated the various channels via which the advertised holidays could be booked and considered that it would have been apparent to viewers that the website provided additional information.
They said it was normal practice in the industry to adjust holiday prices to respond to changes in demand and availability, which was known as fluid pricing, and that prices therefore could fluctuate. They said that when new editions of brochures were issued, the tour operator set the prices of its holidays at a certain level based on its forward expectations of customer demand and the profit margin that it hoped to achieve. They said large tour operators, such as themselves, used sophisticated yield management systems to automatically track sales and, if sales of any particular holiday for any particular departure were lower than anticipated, the price of such a holiday might be reduced for a period of time, or conversely prices might be increased, if sales were exceeding expectations. They stated that the prices were therefore fluid and millions of price adjustments took place during any selling season across a range of holiday products and departure dates. They stated that, when prices were reduced by the tour operator to stimulate demand, the percentage reduction was known in the industry as a fluid discount. They considered that the complainants would have been aware of potential fluctuations as they were monitoring prices.
They stated that, where a tour operator fluid discount was applied to the price of any particular holiday, the level of the fluid discount would vary throughout the time that the holiday remained available. They stated that, as tour operator margins were relatively small, the tour operator fluid margins would rarely be as high as 10%. They considered that the value to the consumer in the advertised promotion was that they could be assured that, during the promotional period, despite the fact that the holiday price would continue to fluctuate in accordance with normal fluid pricing mechanism, the level of discount applied to the promotional holidays would be at least 10%.
They considered it was clear from the claims "Guaranteed 10% Off before the end of January" and "Guaranteed 10% Off", that consumers would receive a discount of at least 10% on the prevailing prices of applicable Thomas Cook holidays during the stated promotional period. They provided supporting documentation in relation to the specific holidays the complainants had been monitoring, including a price list for holidays to Lido de Jesolo and a selected hotel in Sharm El Sheikh (the Sierra Hotel), which listed the "Brochure price May edition", "Total Brochure Price", "AMY Fluid System Price" and "Customer Sell price" available over a period from 17 November to 2 January.
They said the fact that a 10% discount was applied to the system price did not necessarily mean that the holiday price would be seen to reduce when compared to the pre-promotion price, because the price of a holiday did not remain static and was subject to normal and frequent adjustments, depending on the level of supply and demand.
They said that consumers would have been made aware of the pre-discounted price and that a discount of 10% had therefore been applied to their booking, as that information was presented on the website during the promotional period and was also stated on the booking system that consumers booking in a travel agency would have seen. They provided an example from the website relating to the Sierra Resort holiday, which stated "Total price was £2200" (which was crossed out); "Total online discount £246" and "Total price from £2042". These represented the base price, excluding optional extras such as additional luggage allowance or travel insurance.
Clearcast said they had received the confirmation that the terms and conditions attached to the offer stated that the 10% guaranteed discount offer applied only to package holidays (where transport and accommodation was booked together) travelling with Thomas Cook, Thomas Cook Style Collection (incl. Villas With Style), Airtours and Manos that departed before 30 April 2014, and Club 18-30, Escapades and Neilson Beach Clubs holidays that departed between 1 May - 31 October 2013 with the exception of Neilson Beachclubs which was only valid for departures 1 May - 30 June 2013 (excluding departures 17-31 May) and 1 Sept - 31 October 2013. They stated that, based on that, they felt the following legal text was appropriate: "Book by 31st Jan 2013. Selected holidays departing 1 May - 31 October 2013. Conditions apply".
2. Thomas Cook said there was an asterisk on the website next to the promotional messages to indicate that information on the offer needed to be viewed and stated it was possible for consumers to click on the asterisked message to link directly to the terms and conditions. They provided a copy of the terms, which stated "… *guaranteed 10% off applies only to adult prices for packaged holidays booked by 31 January sold under the brand names: Thomas Cook, Thomas Cook Style Collection (including Villas With Style), Airtours and Manos (for departures before 30 April 2014), Club 18-30 and Escapades (for departures between 1 May - 31 October), Neilson Beach Clubs (for departures between 1 -16 May, 1 - 30 June and 1 Sept - 31 October 2-13), and Neilson Ski (for selected winter 2013/2014 Neilson Ski packaged holidays on charter flights to France, Austria, Italy, Bulgaria and Andorra). Saving does not apply to room and board supplements, optional flight or other extras or bookings including £1 child prices. Saving cannot be combined with any other Tour Operator offer or discount unless we advise otherwise. Offer may be withdrawn or altered without notice. All holidays are subject to availability. Ask for full details and applicable holidays".
Assessment
1. & 2. Upheld
The ASA noted that the advertisers operated a fluid pricing policy on their holiday packages, whereby prices would fluctuate. We noted that they maintained that the level of discount applied to the promotional holidays would be at least 10% during the advertised promotional period, but that the holiday price would continue to fluctuate in accordance with the normal fluid pricing mechanism. The promotional holiday price, therefore, might not be seen to reduce when compared to the pre-promotional price.
We noted that the complainants had been monitoring the prices and may have noted that there was some price fluctuation before the promotional period. Nonetheless, we considered that consumers would not expect a promotional discounted price to be a fluctuating price, or to be based on a fluctuating price, because we considered that that would cause confusion as to whether or not a discount had been applied in each instance.
Furthermore, although we acknowledged that the website listing example for the holidays included in the promotion showed the pre-promotional total price ("Total price was £2200"), the "total online discount" ("Total online discount £246") and the promotional discounted "total price" ("Total price from £2042"), which was the current price to the consumer if they bought the holiday at that time, we noted that, in the example provided, the pre-promotional total price of £2200 minus the total online discount of £246 came to £1954, which was less than the advertised discounted "total price" of £2042. In light of that, we considered the presentation of some of the pricing information might confuse consumers.
We noted that the evidence provided in support of the holidays to Lido de Jesolo and a selected hotel in Sharm El Sheikh (the Sierra Hotel) listed the "Brochure price May edition", "Total Brochure Price", "AMY Fluid System Price" ('AMY' price) and "Customer Sell price" available over a period from 17 November to 2 January. We noted the documentation stated that the discounts offered were "3%" and "10%" and that the prices varied depending on the week in which the holiday was being advertised. We understood that the 'AMY' price represented the price to which a percentage discount would be applied, which resulted in what the advertisers considered to be a discounted selling price to the consumer.
Although we noted there had been a 10% discount applied to the AMY price in relation to those holidays in the weeks of 21 December to 2 January, we noted that the "customer sell price", namely the price that consumers would pay for those holidays at that time, was more than 10% off the "Brochure price Dec edition". We considered that, in light of the fluid pricing system, whereby the holiday prices continually fluctuated, it would not be clear to the consumers how the “10% off“ promotion mechanic was applied to their pricing structure, on what basis the 10% discount was calculated, and to what original price the 10% discount would be applied at the time when they wished to purchase the holiday.
We considered that the advertisers' approach would therefore confuse consumers as to the extent of the discount. We did not consider that the promotional discount had been applied in line with consumer expectation, given that the promotional prices were based on a fluctuating price and fluctuated themselves, and we therefore concluded that the ads were likely to mislead.
Ad (a) breached BCAP Code rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading advertising), 3.9 3.9 Broadcasters must hold documentary evidence to prove claims that the audience is likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.18 3.18 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product or service depicted in the advertisement. (Prices).
Ad (b) breached CAP Code (Edition 12) rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading advertising), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation), 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Prices) and 8.2 (Sales promotions).
Action
The ads must not be broadcast again in their current form.
