Two websites, www.firstchoice.co.uk and www.thomson.co.uk, seen on 18 August 2015, promoted holidays in Mexico:
a. Text on the First Choice web page for the holiday stated “RIU PALACE PACIFICO ***** in Nuevo Vallarta, Mexico - Pacific Coast … £1602 PER PERSON Includes £446pp discount GREAT DEAL - 21% OFF Fri 28 Aug 2015 - 14 nights … INCLUDED IN THIS PRICE … Junior Suite Limited Sea View”.
b. Text on the Thomson web page for the holiday stated “Riu Palace Pacifico £1122 Includes £436pp discount GREAT DEAL - 27% OFF … Fri 28 Aug 2015 14 nights … INCLUDED IN THIS PRICE … Junior Suite Limited Sea View”.
The complainant, who had never seen the holidays offered at the implied higher prices, challenged whether the savings claims were misleading.
TUI UK Ltd provided the pricing histories of the holiday on the First Choice and Thomson websites, which covered the nine months and 16 months before the respective ads were seen. They also provided sales data detailing the prices that the holiday had been sold at across all sales channels between January and October 2015.
TUI explained that the base price for the holiday offered by First Choice was £1,460 and the holiday was advertised on their website at that price on 19 November 2014, 10 January, 9 July and 30 July 2015. They also explained that the junior suite with limited sea view carried an additional room supplement of £599 and when added to the base price, it came to £2,048 which was the implied full price (the sum of the headline price and the claimed discounted amount) in ad (a).
The base price for the holiday offered by Thomson was also £1,460 and the holiday was advertised at that price on 11 April, 6 July and 30 July 2015. They explained that the junior suite with limited sea view carried an additional room supplement of £98 and when added to the base price, it came to £1,558 which was the implied full price in ad (b).
TUI stated that they did not hold any evidence of sales at those implied full prices across all sales channels on those dates. They provided a detailed explanation on their pricing process. They said the price for package holidays changed frequently based on demand, but they set their base prices at the level they expected them to sell at. However, due to a lack of demand in relation to the holiday in question, they determined that it would be appropriate to lower their prices in order to promote sales. They did not believe the ads were misleading as the ad indicated to consumers that they were obtaining a package holiday at the headline price as a result of a number of variables that had been applied for their benefit. They believed that showing a discount was important to illustrate the relative value of different holiday packages.
TUI also stated that the evidence supplied demonstrated that the holiday had been on sale for the implied full prices in ads (a) and (b), and that the savings claims in the ads represented a genuine reduction against those implied full prices. They did not believe that the fact the holidays had not been sold at the advertised implied full prices negated those savings or rendered the ads misleading.
The ASA considered that consumers were likely to understand from the savings claims in both ads that the implied full prices of the holiday (£2,048 in ad (a) and £1,557 in ad (b)), represented the prices at which the holiday was usually sold by First Choice and Thomson, respectively. We further considered that consumers were likely to expect that the savings claims “Includes £446pp discount” in ad (a) and “Includes £436pp discount” in ad (b) represented genuine savings against those usual selling prices.
We noted from the pricing history data provided that the advertised prices for the ‘junior suite’ holiday on both websites fluctuated during the periods covered and that the price had been continuously discounted on the First Choice website since 15 November 2014. We also noted that the holiday had not been consistently offered at £1,460 (the base price on which the implied full prices in ads (a) and (b) were based, without taking into account the additional room supplement) on both websites for a sustained period of time prior to the date of the ads. The holiday had only been advertised at that price on the First Choice website for one to three days on 19 November 2014, 10 January, 9 July and 30 July 2015. On the Thomson website, the holiday had been advertised at that price on 11 April 2014 for four months, approximately 16 months prior to the date of ad (b), and on 9 July 2015 for two days. In addition, we noted from the sales data, which covered the period from January to August 2015, that TUI had never sold the holiday at the implied full prices in either ads (a) or (b). We noted that three holidays were sold from First Choice during that same period and none out of the three were sold at a price higher than the implied full price in ad (a); 25 holidays were sold from Thomson, four of which were sold at a price higher than the implied full price in ad (b). The data also indicated that the majority of the prices at which the holiday was sold in the months preceding the date of the ads had been lower than the implied full prices in the ads.
We acknowledged TUI’s comments that holiday pricing often changed depending on demand. However, we considered the evidence provided had not adequately demonstrated that the holidays were usually sold at £2,048 and £1,557 by First Choice and Thomson respectively, and therefore the savings claims did not represent genuine savings against those usual selling prices. We concluded that the savings claims were likely to mislead.
Ads (a) and (b) breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications 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), 3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication. (Prices) and 3.40 3.40 Price comparisons must not mislead by falsely claiming a price advantage. Comparisons with a recommended retail prices (RRPs) are likely to mislead if the RRP differs significantly from the price at which the product or service is generally sold. (Price comparisons).
The ads must not appear again in their current forms. We told TUI UK Ltd to ensure that they did not make similar savings claims in future advertising unless they held evidence to demonstrate that the higher prices were the usual prices at which the holidays were sold and that the savings claims reflected a genuine saving.