Holidaymakers Warned as UK Watchdog Investigates Hidden Travel Fees

Holidaymakers could face unexpected costs after booking trips online, as the UK’s competition watchdog launches a major investigation into whether mandatory charges are being disclosed clearly enough at the start of the buying process.

The Competition and Markets Authority (CMA) has opened investigations into Trainline, Virgin Atlantic and RED Driving School over concerns about a pricing practice known as “drip pricing.”

The practice occurs when customers are initially shown a lower headline price, only for mandatory charges to appear later during the booking process.

The CMA says consumers should be able to see the total unavoidable cost early enough to make a meaningful comparison between competing offers.

Virgin Atlantic facing scrutiny over holiday charges

For holidaymakers, the investigation into Virgin Atlantic is particularly significant.

The CMA is examining whether mandatory resort fees and local taxes were included in the upfront prices displayed to customers booking package holidays.

Such charges can vary depending on the destination and accommodation and, in some cases, can add hundreds of pounds to the final cost of a trip.

Virgin Atlantic has said mandatory fees are indicated at multiple stages during its booking process. The airline said it is reviewing the CMA’s concerns and will cooperate with the investigation.

The investigation does not mean the CMA has concluded that Virgin Atlantic has broken consumer law.

Instead, the regulator is examining whether the way prices were presented complied with the UK’s consumer protection rules.

What is drip pricing?

Drip pricing can make a holiday, ticket or other service appear cheaper than it actually is.

For example, a traveller may initially see a holiday advertised at £1,500. As the booking progresses, mandatory resort charges or local taxes may be added, increasing the amount the customer ultimately has to pay.

The problem is not simply that additional costs exist. The CMA’s concern is whether unavoidable charges are being disclosed clearly and early enough for consumers to understand the real price before deciding to buy.

UK government guidance states that businesses generally need to provide the total price upfront and that hiding additional mandatory fees until later in the purchasing process can be unlawful.

Trainline and RED also under investigation

The CMA’s investigation extends beyond holidays.

Trainline is being investigated over the presentation of mandatory booking fees on train and coach journeys. The CMA identified train booking fees ranging from 59p to £2.79 in transactions it examined, while coach bookings carried a £1.50 fee.

RED Driving School is also being investigated over the way mandatory booking and digital fees are displayed. The CMA has raised concerns about £7 charges being excluded from the initial prices shown to customers.

All three businesses have indicated that they will engage with the regulator.

Why the crackdown matters to consumers

The CMA argues that hidden mandatory charges can distort competition.

If one company advertises a lower headline price because unavoidable fees are revealed later, its offer may appear cheaper than a competitor that displays the full cost immediately.

That can influence which business a consumer chooses before they discover the true price.

The UK introduced stronger consumer protection rules through the Digital Markets, Competition and Consumers Act 2024. The legislation specifically addresses drip pricing and gives the CMA stronger direct enforcement powers.

The regulator can impose significant penalties where consumer law has been breached. According to the CMA’s current enforcement framework, companies can face fines of up to 10% of global turnover, while consumers may potentially receive compensation in appropriate cases.

Holidaymakers should check the final price

The latest investigations are a reminder that travellers should look beyond the first price displayed when comparing holidays.

Before paying, consumers should check whether the quoted price includes:

• Resort or destination fees
• Local taxes
• Mandatory booking charges
• Baggage and other compulsory travel costs
• Accommodation-related mandatory charges
• Any other unavoidable fees

The safest approach is to compare the final mandatory price, rather than simply comparing the headline price shown in advertisements.

A changing approach to online pricing

The CMA’s latest action is part of a wider campaign against pricing practices that can make products and services appear cheaper than they really are.

Earlier this year, the regulator took action against ticket seller StubHub over drip pricing and ordered almost £1.5 million in refunds and penalties. It has also taken enforcement action against driving organisations over similar concerns.

The latest investigations show that the regulator is now examining major businesses across travel, transport and other consumer markets.

For holidaymakers, the message is straightforward: the cheapest advertised holiday may not be the cheapest holiday once every mandatory charge is included.

As the CMA puts it, consumers should be able to understand the true price early enough to compare their options confidently.

The investigations into Trainline, Virgin Atlantic and RED Driving School remain ongoing, and no final finding of wrongdoing has been made against the companies involved.