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Study: Hotel Booking Websites Cheat Travelers Out Of Billions

If you use travel booking websites, beware. Photo: WUSF
If you use travel booking websites, beware. Photo: WUSF

If you use travel booking websites, beware.

New research from the American Hotel & Lodging Association (AHLA) reveals that customers are cheated out of almost six billion dollars annually by online booking scams from fraudulent or misleading travel websites.

According to the AHLA, nearly one out of four customers faces some sort of problem when booking a hotel reservation through a source outside of the hotel's direct booking system.

“23% of consumers report being misled by third-party traveler resellers on the phone or online,” a statement from the industry trade group that represents hotel chains, independent hotels and bed and breakfasts said. “(This) amounted to $5.7 billion in fraudulent and misleading hotel booking transactions in 2018 alone.”

AHLA warns that some fraudulent practices include mimicking hotel websites and call centers, popping up on early listings from search engines. The misleading sites also offer fake discounts and push a false sense of urgency by saying that there are a limited number of rooms available.

"There's are a small percentage (of websites) that are out their on their own and they're just, frankly, deceptive websites, they are setting up with names that sound like a hotel...but they aren't actually the hotel." says Chip Rogers, President and CEO of the AHLA.

Rogers hopes that, at some point, legislation could come into play to help customers. In July, the "Stop Online Booking Scams" Act was introduced with bipartisan support from Representative Peter Welch, D-VT, Gus Bilirakis, R-FL, and Lois Frankel, D-FL. “All we’re asking Congress to do is say: if someone is booking through a third party site…the third party site cannot create this environment where people think they’re booking through the actual hotel site without letting them know,” Rogers said. “It’s just simple disclosure, it's allowing the consumer to know who he or she is booking through, we think it’s a common sense.” As of now, the bill is in the early stages of the legislative process, its next step is to be considered by committee.

Rogers also advises users to be skeptical about what he calls the false sense of competition among travel booking sites.

AHLA's survey found that over 40% of consumers were upset to learn that when they comparison shop, most resources are owned by only two companies.

“When you’re booking through a third party site…the two major players, Expedia Group and Booking Holdings, they control about 95% of online booking and booking sites,” Rogers said.

For example, Expedia owns companies like Hotels.com, Trivago and Hotwire; Priceline, Kayak and Booking.com belong to Booking Holdings.

“So when you think you’re going to get a good price because there’s all this competition, the reality is that it’s frankly just two companies, it’s a duopoly, so the best course of action is to go directly to the hotel site,” added Rogers.
A graphic showing which popular travel websites are owned by two companies, Expedia and Booking Holdings. COURTESY AMERICAN HOTEL & LODGING ASSOCIATION

Because of this, the AHLA is launching a new campaign called “Search Smarter.

They say it is “aimed at helping travelers avoid lost reservations, additional fees, and potentially ruined vacations. The transparency campaign encourages consumers to book smart by booking directly with hotels or trusted travel agents.”

Requests for comment from Expedia Group and Booking Holdings were not returned by time of this publication.

In Florida, hotel guest spending is $49 billion with 3,745 hotels in the state, amounting to over 747,700 jobs, according toAHLA.

Expedia Group's Head of Communications Josh deBerge sent a statement to WUSF 89.7 News:
Expedia Group and all of our travel websites have long been trusted brands, powering millions of trips around the globe and connecting people with travel that match their needs. More than three-quarters of US travelers prefer to book their trip all in one place. That’s why we empower consumers to shop a broad range of lodging options across different price points and with different amenities. We provide localized content and 24/7 local language customer support to create a frictionless experience, and our loyalty programs provide additional value, regardless of where you stay. Our websites allow our lodging partners to become visible and bookable to global, incremental consumers, while providing transparency within the hotel market. And trust in Expedia Group extends beyond consumers. Expedia Group works with the vast majority of AH&LA’s members who provide their content directly to us, which demonstrates that even their members agree that we are a trustworthy channel for consumers.

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