I suspect that I was not alone in the travel industry in being amused and intrigued by the story of the Broadway Hotel in Blackpool, which charged £100 to customers who placed a bad review of the hotel on Trip Advisor.
The story does raise some important points of concern, both about the legality of the actions of the hotel, but also, and probably more importantly, about the impacts of mistreating your customers, both in the short and long term. I am sure that there are those in the industry who feel aggrieved at what they regard as unjustified complaints, and want to take some action to redress the balance. Imposing “fines” on customers who date to complain is not, and can never be the right answer.
Looking first at the legal position, the hotel apparently had a provision in its Booking Conditions which provided:
Despite the fact that repeat customers and couples love our hotel, your friends and family may not.
For every bad review left on any website, the group organiser will be charged a maximum £100 per review.
Clearly, any business is entitled to include any terms that it wishes within its contracts with its customers. However, the EU have identified that standard booking conditions have to comply with the Unfair Commercial Practices Directive of 2005. That Directive contains a black list of practices which are always considered illegal, and a grey list of practices which are likely to be considered unfair. Ironically, a term which imposes a penalty like this is not on the blacklist, but it is reasonable to assume that the courts would regard penalising a consumer for daring to complain as falling firmly into the bounds of an unfair practice, and would strike this clause out of the booking conditions. That certainly seems to have been the view taken by Blackpool trading standards authorities.
However, another issue, and one which is equally important to the travel industry is the question of how this payment was taken. The hotel had obtained the consumer’s credit card details to pay for the room, and subsequently used that credit card to impose the penalty on the consumer.
The credit card industry is getting increasingly concerned about card fraud, and as a result, has introduced data security standards relating to the use of payment cards, known, snappily, as PCI-DSS. Those standards require all businesses receiving payment through payment cards, amongst other things, to protect stored cardholder data, and the official guidance on what this means, states as a starting point that businesses should:
Limit cardholder data storage and retention time to that required for business, legal, and/or
It is very hard to see how the hotel could justify holding the cardholder data after payment for the hotel had been made, and as such, the hotel could well be in breach of the PCI-DSS rules. The consequences of a breach include potential fines, and much more seriously, the risk that the merchant acquirer may be obliged to terminate their relationship with the business. The inability to take card payments would be the death knell for most travel businesses.
As serious as the legal consequences of this issue may be, in practice the reputational damage created by this issue are potentially more costly and far reaching. The story got covered by most papers and online media in the UK, and internationally, and the nature of search engines will mean that anyone searching for the Broadway Hotel in Blackpool will be confronted with this story for some time to come. Probably more seriously, anyone doing a generic search for “Blackpool hotels” will also find the story. Even though Simon Calder of the Independent has subsequently visited the hotel, and written a positive story, and the hotel has refunded the affected customers, this issue will not instantly disappear.
It used to be said that one happy customer will share their experiences with five others, whereas unhappy customers will share their views with around 10 others. In the world of instant communications, unhappy customers can quite easily share their experiences with millions of other actual or potential customers.
So, what might have seemed a good idea in preventing negative reviews has seriously backfired on the hotel, and a bit of forethought should have prevented this idea being implemented in the first place. Surely the better answer would have been to address the causes of complaint, so as to prevent the bad reviews. Unfortunately, many businesses who have pride in their product or their work cannot see the bad points of what they do – how many TV programmes have we seen where the restaurant or hotel owner refuses to accept the need for change – which begs the question as to why they ever agreed to be filmed……
Even in the age of fantastic information flow, the basics of good customer service don’t change. Deliver what the customer wants and has paid for, and he will be content; deliver more, and he will be happy, but woe betide you if you seriously under-deliver. If you do, make sure you put it right – don’t criticise the customer for daring to complain.