The hotel industry has been a pioneer as the digital landscape has evolved over the decades, becoming one of the first industries to move the entirety of its product offerings to the online marketplace. Our direct-to-hotel mobile apps and websites are incredibly dynamic and innovative, enhancing the guest experience from the start of the booking process and throughout their visit as well as after they leave the property. Indeed, online travel bookings are a big business, and hotel and lodging businesses today make up 15 percent of all online commerce on the U.S. internet.
Now, as more and more digital channels offer new and diverse booking options for guests—from desktops to mobile phones to voice-activated assistants—it’s more important than ever that consumers pay close attention throughout the booking process. That is why the American Hotel & Lodging Association (AHLA) launched our “Search Smarter” consumer awareness campaign earlier this year, ensuring we are on the front lines in providing consumers with all the information they need prior to booking a hotel room.
To avoid aggravation and ruined vacations or business travel, it’s important that consumers understand how to slow down, search smarter, and make the best decisions throughout the booking process, particularly because our research reveals that online booking scams and deceptive marketing tactics are on the rise.
The number of affected consumers is shocking. In 2015, just six percent of American travelers reported having booked on what they believed was a hotel’s official website, only to find they had booked on a fraudulent website—one that uses a variety of marketing tactics to mimic a hotel’s website but is not, in fact, affiliated with the hotel. Just two years later, the number of travelers reporting that same experience has nearly quadrupled to 22 percent. Today, that amounts to 55 million hotel bookings of this type each year, translating to $3.9 billion in “bad” bookings.
Furthermore, evidence reveals consumers are not getting the deals they think they are from third-party booking sites. A closer look at online travel agencies (OTAs) and their marketing tactics reveals misleading marketing that can lead to false choices, false discounts, and a false sense of urgency throughout the booking process. And the poll results detail the extent to which this online behavior impacts consumer confidence, revealing that 74 percent of travelers have less confidence booking with these sites after learning more about the prevalence of scams and deceptive marketing tactics.
According to the poll results, many consumers shop with OTAs because they believe these sites allow them to compare all the options. However, the overwhelming majority of consumers (74 percent) are unaware that OTAs offer a false sense of choice because they’re just comparing options between the same two companies, Expedia and Priceline, which, together, control 95 percent of the online travel market.
The data also reveals 79 percent of consumers search OTA sites because they believe they will find better deals. That belief is fueled by misleading marketing practices like “slashed” or deeply discounted pricing, which is not based on an actual room rate set by the hotel. In addition, almost half of consumers (45 percent) have reported being influenced by messages such as: “Only 2 rooms left!” These messages aren’t based on the full room inventory from the hotel; they’re just marketing tactics used to make consumers book faster.
Though the OTAs are a partner to the hotel industry, when it comes to the guest experience, consumers should know what they are getting. Booking directly with the hotel or a trusted travel agent is the surest way for guests to get what they want and need. Furthermore, when consumers book directly with the hotel and establish that relationship from the beginning, hotels can provide services and amenities that the OTAs can’t because that’s our business—guest service.
We are continuing to encourage consumers to “search smarter” this fall as they begin booking holiday travel. Please help us continue to spread our message. Share our simple tips to help ensure guests have the best hospitality experience from beginning to end and use our infographics and other materials, which you can find at www.ahla.com/searchsmarter.
About the Author
Maryam Cope is vice president for government affairs for AHLA.