Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Two promotions on the Village Hotels website www.village-hotels.co.uk, for Friday night packages:
a. The first ad, seen on 10 October 2015, was headed "Feel Good Fridays." Text stated "1 Night Stay, 2 Course Dinner + Chilled Prosecco Valid on Friday's [sic] throughout October & November Stay with us on a Friday in October or November for just £59 per room ... Choose your hotel and book your break today ... From £59". A drop-down menu on the page displayed the hotels participating on the promotion and allowed the visitor to select one to proceed with booking.
b. The second ad, seen on 12 January 2016, was also headed "Feel Good Fridays." Text stated "Friday's [sic] until 30th November 2016 ... Choose your location and book in for your break with us". A drop-down menu on the page displayed the hotels participating in the promotion and allowed the visitor to select one to proceed with booking. Beside the name of each hotel text stated "from £59".
The complainant, who had attempted to book the promotion for one of the listed hotels and discovered that no rooms were available under promotion (a) and were not available for £59 under promotion (b), challenged whether:
1. sufficient information about availability for consumers to make an informed decision on whether or not to participate had been provided in ad (a); and
2. the claim "from £59" in ad (b) was misleading and could be substantiated.
1. VUR Village Trading No 1 Ltd t/a Village Hotels stated that it was difficult to make a reasonable estimate of likely demand because there was no directly comparable historical data for an offer with the same constituent elements, price and dates as the Feel Good Fridays offer. However, they believed they made a considerable number of rooms available to fulfil the offer, with over 5000 sold. They said they were not selling a single physical product and that the definition of 'stock' for the purposes of this type of promotion was debatable. Their intention was that the amount of stock available, in the widest sense of the number of rooms across their 28 hotels, greatly exceeded the likely response, and that they did not run promotions with very limited stock. By way of example, a recent promotion had available 100,000 rooms, of which 28,000 were sold. They said that if they defined stock more narrowly then the multiple permutations of definitions (such as such as a particular hotel or as a particular night at a particular hotel) would make it nearly impossible to make a reasonable estimate of likely response, although in the majority of cases supply would still exceed demand.
In order to convey the availability to consumers, Village Hotels said they had included the condition "All rates are subject to availability" in the terms and conditions for the offer. They believed that, as their stock of rooms was not extremely limited or heavily discounted, this was sufficient. They said that it would not be practical to provide detailed information about each night at each hotel in the body copy of the promotion, and that many of their customers would just book another night or another hotel if they found out their first choice was not available. Because of this practice, customers would not be able to make an informed decision about whether to participate in the promotion without knowing about other hotels and dates, which they were given if they called customer services.
2. Village Hotels stated that, like most big hotel groups, they used a revenue management system to move room prices up or down, depending on demand and availability. Feel Good Friday rooms at the London Watford Hotel were initially available at £59. The number of rooms available would have been, with few exceptions, all Friday nights in 2016; 121 rooms were sold at that price. The Feel Good Friday room price at the hotel (in early February 2016) was now £69. This price was showing against approximately 1500 Friday room nights throughout 2016, but was subject to movement up or down depending on demand and availability.
The ASA considered that consumers would understand, unless it was otherwise made clear in the ad, that the hotels which were listed in the drop-down menu were participating in the promotion and that rooms would generally be available under the conditions stated. We understood that promotional rooms at the hotel the complainant had selected were completely sold out for the remainder of the promotional period, but that the hotel was still listed on the menu and that no information regarding room availability was related in the main body of the ad. While we noted that "All rates are subject to availability" was stated in the click-through terms and conditions, we were concerned that this appeared on a separate page and was insufficient to indicate the status of rooms at a particular hotel. We considered that, where hotels or dates were sold out or had very limited availability, this information would affect a consumer's decision to participate and should therefore be made clear in the main body of the ad. Although we acknowledged that some consumers would attempt to book another option if their preference was not available, we did not consider that this negated the requirement for sufficient information regarding availability to be provided. Because the ad appeared on a live part of the advertiser's own website, we considered that consumers would understand that it reflected the current availability of promotional rooms. The advertiser should therefore ensure the information given was up to date and accurate.
We noted Village Hotels' view that the definition of 'stock' in this instance was ambiguous and that it was therefore very difficult to adequately estimate demand. However, we considered that consumers would understand the 'stock' to be the number of promotional rooms available in each hotel for each eligible date (in this case, Fridays in October and November) and that a reasonable estimate of likely response should be calculated on this basis. We considered, therefore, that should there be very limited or no rooms available in a specific hotel, on a specific date, or a combination of both, this information should be available to consumers. We understood that promotional rooms had sold out in at least one of the eligible hotels across all dates, but that it still appeared on the selection menu and no additional information was given to indicate that rooms were no longer available under those circumstances. We therefore concluded that sufficient information about availability for consumers to make an informed decision on whether or not to participate had not been provided and that the ad had not been adequately amended when hotels became unavailable. The ad was therefore misleading and breached the Code.
On this point, ad (a) breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), 3.29 3.29 Marketers must monitor stocks. If a product becomes unavailable, marketers must, whenever possible, withdraw or amend marketing communications that feature that product. (Availability), 8.2 8.2 Promoters must conduct their promotions equitably, promptly and efficiently and be seen to deal fairly and honourably with participants and potential participants. Promoters must avoid causing unnecessary disappointment. (Sales promotions) and 8.10 8.10 Promoters must be able to demonstrate that they have made a reasonable estimate of the likely response and either that they were capable of meeting that response or that consumers had sufficient information, presented clearly and in a timely fashion, to make an informed decision on whether or not to participate - for example regarding any limitation on availability and the likely demand. (Availability).
The ASA considered that consumers would understand the price claims next to hotel names in the drop-down menu as relating to the lowest generally-available promotional room rate at each specific hotel. Because the ad appeared on a live part of the advertiser's own website, we considered that consumers would understand that it reflected the current prices of the participating hotels. In relation to the complainant's chosen hotel, which we understood they had only been able to book for £69, we therefore expected to see evidence that at least 10% of promotional rooms were available at the 'from' price stated in the ad at the time it was seen by the complainant and that these were reasonably distributed across the promotional period. While Village Hotels' said that at the time the ad was seen the majority of rooms on Friday nights would have been available in the promotion at £59, we had not seen documentary evidence to demonstrate this.
We also considered that, from the information available in the ad, consumers would understand that promotional rooms were available for a range of prices starting at £59 and that, because the product was a standalone promotional package rather than a standard hotel room rate, these prices would be set and would not be subject to the usual fluctuations of hotel pricing. We understood that the prices of Feel Good Friday rooms were subject to movement in either direction, and that this was calculated by a revenue management programme on the basis of uptake and demand, rather than being planned in advance. We therefore understood that at any point during the promotion, Village Hotels would not know whether the rooms would change in price and, if so, in what direction and by how much. We considered that consumers would expect the 'from' price statement to change if the cheaper rooms were sold out, but without additional information would not expect the individual room prices to fluctuate on the basis of factors such as availability or demand. Because the potential for price fluctuations would affect consumers' understanding of the claim "from £59" and because Village Hotels had not demonstrated that at least 10% of the rooms were available at that price, we concluded that the ad was misleading and breached the Code.
On this point, ad (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), 3.22 3.22 Price claims such as "up to" and "from" must not exaggerate the availability or amount of benefits likely to be obtained by the consumer. (Prices) and 8.2 8.2 Promoters must conduct their promotions equitably, promptly and efficiently and be seen to deal fairly and honourably with participants and potential participants. Promoters must avoid causing unnecessary disappointment. (Sales promotions).
The ads must not appear again in the form complained about. We told VUR Village Trading No 1 Ltd to ensure that for future promotions they were able to demonstrate that they had made a reasonable estimate of likely response and that their ads included sufficient information about room availability for consumers to make an informed decision on whether or not to participate, including by suitably amending ads when hotels or dates become unavailable. We also told them not to use the claim "from £X" unless they held sufficient evidence to demonstrate that this represented at least 10% of the available rooms and ensured that their ads indicated when prices for promotional room packages would be subject to fluctuation.