Contract Regulations Must Ensure Balance For Businesses And Consumers

UKHospitality-LogoCurrent exemptions for hospitality businesses from the Consumer Contract Regulations should remain in place, otherwise businesses could be hit be widespread last-minute cancellations, according to UKHospitality.

UKHospitality has responded to the Government’s consultation on Consumer Contract Regulations calling for hospitality to retain its current exemption. The regulations apply to businesses providing services on premises and at distance, by internet and telephone with a current exemption for hospitality. The exemption allows hospitality businesses to recoup a booking fee in the event of a last-minute cancellation.

UKHospitality Chief Executive Kate Nicholls said: “We are fully supportive of the intention of the Consumer Contract Regulations and the aim to provide fair balance of responsibilities between business and consumers. We do, however, believe that the current exemption for hospitality businesses should remain as these businesses face a significant risk.

“Last-minute cancellations for accommodation providers cause significant disruption. If hotels and other businesses are unable to recoup some of the cost, there is the potential for no-shows to become a regular occurrence on a large scale. Measures introduced to help protect consumers rights should not allow for the practices such as the booking of multiple rooms speculatively, which could be an unintended consequence. Additionally, some online booking platforms retain a fee in the event of a cancellation. Costs will be incurred if the exemption is removed, and smaller businesses may not be able to swallow it.

“Removing the exemption could, paradoxically, reduce choice for customers. If all products become refundable by law, hotels may no longer be incentivised to offer discounts for non-refundable rates.

“Restaurants and pubs are equally at risk from last-minute cancellations. In some cases, the venue may have turned away other potential customers expecting the income from a booking. Consumers’ rights should be protected but not at the expense of potential chaos for businesses. The current legislation provides a balance and this should not change.”