Singaporeans are paying more than what they bargained for when booking trips online: Study

Out of the 524 consumers that were surveyed, 81% reported having to pay a higher price than advertised.
The Straits Times

A market study on the online travel booking sector has found that some Singaporeans are paying more for trips due to dodgy pricing and marketing practices. 

Drip pricing and optional items being added by default are some of the practices that give rise to consumer protection concerns, said the Competition and Consumer Commission of Singapore (CCCS) in a media statement on Monday (Sept 30). 

The CCCS was prompted to conduct a nine-month study from July 2018 to April 2019 on the online booking sector due to its growing usage among Singaporeans.

The study found four common pricing and marketing practices that could mislead consumers:

  • Drip pricing, by not disclosing both mandatory and optional charges upfront, lures consumers into making an attractive purchase based on incomplete price information;
  • Pre-ticked boxes which adds on optional or unwanted items by default;
  • Strike-through pricing, where a “sale” price is presented next to one that is crossed out;
  • Pressure selling using misleading claims which creates a false sense of urgency in the consumer to make a purchase.

Out of the 524 consumers that were surveyed, 81% reported having to pay a higher price than advertised at checkout for flight and hotel room bookings, largely for fees that were mandatory.

Survey results of respondents’ experience of the final price being different.
Competition and Consumer Commission of Singapore

The commission stated that mandatory fees should be included in the headline price. 

As a result of these practices, CCCS is proposing a price transparency guideline for all types of consumer-facing businesses. This is to ensure that consumers are able to make an informed choice and allow businesses to compete on an even playing field. 

The guidelines will provide more clarity on what constitutes an infringement on consumer protection laws, and also show what the CCCS considers when assessing if pricing strategies are sufficiently transparent. 

The study covered 38 online travel websites and over 700 industry members, and was conducted due to the rise of the online booking sector in recent years.

According to a Google-Temasek report in 2018, the sector has grown by 15% from US$19.4 billion (S$26.8 billion) in 2015 to US$29.7 billion (S$41.1 billion) in 2018, with Singapore having the highest per capita expenditure in the region. 

CCCS has also stated that the public can provide feedback on the proposed guidelines until Oct 21.

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