The risk you take when using an online hotel booking platform

A MyBroadband reader recently booked a hotel room in Stellenbosch using an online booking platform called Amoma.com.

The platform offers booking options at over 300,000 hotels worldwide, including in South Africa.

Unfortunately for the reader, she booked the wrong dates for her stay – booking for a Wednesday night, instead of the preceding Saturday.

She picked up the error two days after having made the booking and paying for it on the platform, and contacted Amoma for assistance in fixing it.

The plan was to receive a refund and book again, or shift the booking to the correct date.

However, Amoma said this would not be possible.

A representative contacted her via email following her request and stated that the cancellation of the booking would incur a fee of R1,821. This was the same amount as the hotel booking.

“Our company’s goal is to obtain the lowest rates on the market for our clients. In some cases, the best rates come with a non-refundable policy,” stated the email.

Abide by the CPA

Following contact from the reader, MyBroadband reached out to Amoma with questions on its cancellation policy, and whether it abides by local laws where it operates – such as the Consumer Protection Act (CPA) in South Africa.

The CPA states that a “consumer has the right to cancel an advanced reservation or booking but will inevitably be liable for a reasonable cancellation penalty”.

“Whilst it’s common practice to charge a greater amount where the consumer cancels closer to the reserved date, the supplier still bears the onus of validating the charge. Unfortunately, for the supplier, they can no longer have a blanket no refunds policy when dealing with cancelled bookings.”

Following questions from MyBroadband, Amoma sent another email to the reader whose cancellation we referenced.

“As you were advised at the time of the confirmation, this booking has been made under special cancellation conditions. This means that it is non-refundable and once made, we cannot make changes or waive charges,” said Amoma.

“Please note that these are the same conditions we receive from our suppliers and hoteliers.”

It stated that its cancellation policy is displayed “multiple times” during the booking process.

“Amoma.com is a Swiss company and does not follow the laws of other countries,” it added.

Getting a refund

To find out what actions a consumer can take in a scenario like this, MyBroadband asked Norton Rose Fulbright what a consumer’s rights are if a booking platform denies a refund.

Norton Rose Fulbright director Rosalind Lake said the CPA applies to all suppliers, regardless of where they are based, who supply goods or services in South Africa or conclude transactions for the sale of goods or services in South Africa.

“However, in practice, it will be very difficult for a South African consumer to successfully complain against an offshore supplier,” said Lake.

“The challenge with an online booking platform is that it provides a booking service on behalf of the hotel in question and as such will rarely give customers better terms than the hotel itself provides. There are many suppliers in South Africa who have not amended their policies to align with the requirements of the CPA.”

Additionally, while the CPA does provide for consumers cancelling an advanced booking, it can be argued that the pricing offered by an online booking platform constitutes a promotional offer.

“The quid pro quo for very low pricing is that the booking is non-refundable – i.e. that the cancellation penalty is the full amount.”

Lake said there have not been any cases to test these provisions in the CPA, and whether a cancellation penalty that is the full amount will ever be accepted as reasonable.

“The supplier bears the onus of proving that a cancellation penalty is reasonable in the circumstances. Until there is further clarity on this, consumers are warned to carefully read the terms and conditions and check bookings thoroughly before placing their orders – especially when a website offers discounted pricing,” said Lake.

“Although the letter of the law may be on your side as a consumer, practically it is very difficult to extract a refund from an offshore company once a booking has been made and paid in full.”

Now read: New service to take on Uber and Taxify in South Africa

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The risk you take when using an online hotel booking platform