default logo

Online hotel booking scams cost consumers $5.7 billion a year

Nearly one in four consumers are deceived by online booking scams and dishonest marketing practices from fraudulent and deceptive travel websites, according to a new study from the American Hotel & Lodging Association (AHLA).

In fact, in 2018, 23% of consumers said they had been misled in some way by third-party booking sites, which translates to over $5.7 billion in scams at online booking, according to the AHLA. These third-party travel resellers use various marketing tactics to mimic hotel websites and call centers, but are in fact not affiliated with the hotel.

The study was conducted by Morning Consult and Kalibri Labs and surveyed 2,200 adults in the United States in July 2019.

“In addition to third-party websites that mimic hotel websites and call centers but are not actually affiliated with a hotel, costing consumers time and money, this new study shows how misleading advertising is a significant problem on some online travel agencies websites,” said Chip Rogers, President and CEO of AHLA.

Over 40% of consumers were upset to learn that when comparing these “digital intermediaries” – Trivago, Kayak, Expedia, Orbitz, Hotels.com, Travelocity, Booking.com and others – they usually only compare the same two companies: Expedia and Priceline, which together control 95% of the online travel market.

AHLA encourages consumers to “Search Smarter,” a campaign that aims to help travelers avoid lost reservations, overcharges and potentially ruined vacations by booking with trusted travel agents or directly with hotels .

“There’s still a lot to be said for human connection and the personal touch for travelers who want to ensure they have a great experience away from home,” said Roxanne Boryczki, MCC, President of AZ Trails Travel. . She saw first-hand customers who needed help with hotel reservations they made online that weren’t what they wanted, or that they made in error and found locked in non-refundable rates.

“A couple of times we managed to contact the booking platform and get a refund for the customer,” Boryczki said. “We’ve also had customers walk in the door and ask ‘what does a travel consultant do for me’ and then tell how they were let down by online booking engines and moved on to different hotels. Usually we explain to the guest that this is exactly why you are booking with a professional travel consultant, and then we and they have more control over the hotel experience.

“What the public often doesn’t realize is that for agents still booking in a GDS system, we have access to Expedia rates, BAR rates and Radius rates, so we can get them a good price, but we can do this in a way where we have some influence on the outcome.If a hotel has put our guests in a room that is not acceptable, they know they need to contact us and we advocate on their behalf to resolve the problem.

A majority (77%) of Americans want the government to place a higher priority on enforcing consumer protection laws against third-party hotel resellers. AHLA said it will continue to advocate for Congress to pass the Stop Online Booking Scams Act of 2019 (HR 3956), a bill that would protect consumers by increasing the transparency and security of the process. online booking.

Introduced in July by Reps. Peter Welch (D-VT), Gus Bilirakis (R-FL) and Lois Frankel (D-FL), it would prohibit third-party online hotel reservation sellers who are not affiliated with the hotel from advertising, promoting or selling a booking if they state or imply that they are the beneficial owner or operator of a hotel. It will then be considered by the Energy and Commerce Committee, before possibly being sent to the House or Senate as a whole.