The issue got resolved thanks to @pnuts and @CMaster.
In short, I think the very first comment from pnuts - which I would accept as the answer if pnuts were to post it as an answer - fully answers the question:
- First raise it with the Hotel because it may be easiest
- Credit Card Company next, because they can impose a short time cut-off for disputed charges, putting pressure and the burden of proof on the vendor
- Trading Standards - issues can be raised through an online form on Advice Guide
- Small Claims Court works on claims of up to 10'000£ and costs a fee depending on the claim amount, which is why it is the last option. The minimum fee is currently 35 £.
I actually skipped the Credit Card Company and went straight to Trading Standards. Advice Guide is the entity that handles the online reporting of incidents to Trading Standards. Issues are reported online through Advice Guide to Citizens Advice who then forward the issue to Trading Standards. Even tough I skipped the Credit Card Company, the response I got when I raised the issue with Citizens Advice mentions the Credit Card Company as an option.
Advice Guide also has very thorough information about what is and what isn't allowed for businesses in the UK. After drilling down a bit I found explicit information about the laws the Hotel is in violation of.
I then raised the issue with Trading Standards through the online form at Advice Guide as a general consumer query. I also sent the Hotel an email stating the specific laws they were in violation of (actually the Acts, on which the laws are based), and that this will be the final email on the matter since I am now forced to resolve the issue through legal means.
Both approaches worked, surprisingly within hours.
The hotel refunded the difference in full once they were informed of the specific laws they were in violation of, and agreed to make the necessary changes to their platform to be in compliance with the law.
Citizens Advice responded within hours with a thorough answer. I think the answer is relevant for everyone having any dispute a UK Hotel regarding pricing and is thus highly relevant to the question:
Thank you for your enquiry to the Citizens Advice consumer service. Your reference
number for this enquiry is [redacted]
We understand from your email that you have experienced issues with
prices displayed when booking a hotel with a trader in the UK.
Your rights and obligations
When a consumer enters into a contract with a trader by means of a
distance communication (telephone, internet, mail order etc.) without
any prior face to face negotiations, they will generally have rights
under the Consumer Contracts (Information, Cancellation and Additional
Charges) Regulations 2013. These regulations, which we abbreviate to
the ‘ICAC’ regulations, came in to effect on 13th June 2014.
Under these regulations a consumer is only liable to pay for any goods,
services or ancillary contracts which they have been made aware before
making a buying decision. In addition, a consumer should not have to
opt out of an additional purchase or cost and can only decided to opt
into any additional products a trader is willing to provide.
Therefore, when a cost is added to a consumer’s purchase without their
consent; they would have the right to withhold payment; or seek a
refund if the payment has already been taken by the trader. In short,
a consumer should be fully aware of all costs relating to their
purchase before they make a buying decision and decide to pay the
trader for the products or services they have selected.
If no such information has been provided; the consumer could hold the trader in
breach of contract and pursue them for full refund.
You can read more about the ICAC Regulations here.
In addition, if you have paid by
credit or debit card, you may be able to seek a refund through the
card issuer if they have a 'chargeback' scheme. You should contact
the bank, specifically mentioning the 'chargeback' scheme, and asking
that the matter is resolved in a timely manner.
Your next steps
At this stage we would advise to discuss the matter further with the
trader, referring to the information above, as it is always advisable
to try to negotiate an outcome that is acceptable to yourself and the
trader before taking any further steps. If this does not resolve the
matter, you could take a more formal approach and write to the trader.
The letter should outline any relevant events regarding this issue and
make it clear what you expect from the trader and why. It should also
give the trader a reasonable time to resolve the matter.
You can find guidance for how to set out your letter on our website.
We would also suggest that any letter is sent by recorded delivery (or an
equivalent) and that you keep a copy – this may help you prove that
you have contacted the trader and tried to resolve the matter
amicably, and also you can use the ‘Recorded Signed For’ label the
post office will supply you with to confirm that the trader has
received the letter.
What we will do
[redacted] Hotel may be in breach of the law for not supplying
pre-contract information. As such, the information you have provided
will be passed to Trading Standards for further consideration and, if
necessary, further action. Trading Standards may contact you for
further information if they deem it necessary. If you would like to
discuss this further please call us on [redacted] or reply to this