Over the past few years, the rise of online booking has become an integral part of trip-planning, making booking a hotel a fast, easy, and convenient part of planning a summer vacation. These online travel bookings are big business: There are an estimated 480 online hotel bookings per minute, comprising 30 percent of all online sales in North America. By searching and booking a room online, consumers can quickly find the right hotel for the right price and get exactly what they want and need.
Unfortunately, however, not all online booking tools are created equal. In many cases, third parties try to trick consumers into thinking they are booking directly with a hotel, when in reality, that is not the case. AH&LA is conducting an awareness campaign aimed at educating consumers on the ballooning problem of rogue vendors and scam artists defrauding consumers who book online through these fraudulent websites.
In March, AH&LA convened a panel on Capitol Hill to raise awareness about the consumer deception issue among lawmakers and their staff. Through a series of questions and answers, the panel underscored the scale of the problem as well as what hotels and consumers can do to protect themselves from fraudulent booking sites.
How are consumers using the internet to book online? How important is it?
From booking directly with hotels, to using travel agencies, to now accessing the multitude of ways people can book online, the distribution of hotel rooms has evolved dramatically in recent years. While there are still a lot of customers booking with our hotels directly in person, by phone, or via call centers, more and more of that business is shifting to non-hotel websites and mobile apps. $152 billion of travel will be booked online in 2015, which is about 30 percent of all online transactions in North America. 62 percent of U.S. adults with Internet purchased a trip online in 2011. This is a growing segment, and as a result, more travel sites are entering the space and competing for visibility. —Mark Morrison, Vice President, Corporate Strategy, Hilton Worldwide
What problems do rogue vendors cause by posing as hotels?
What I see occurring at the hotels we own and manage is the negative impact these scams have on consumers when they arrive at the hotel, or sometimes before. For example, a consumer may have requested a room with a specific view or type of bedding, location on a certain floor, etc., but then they don’t get it. Or they may have a disability and requested a room that suits their needs, but that room isn’t actually booked for them. Or they are the victim of some sort of “booking fee” that my properties don’t actually charge, or perhaps their credit card information is compromised. In other cases, the guest may want to cancel or change their reservation and didn’t realize that they are subject to the rules of the third party, not the hotel. You can see the problem. In these cases, the hotels make every effort to accommodate the guests and their needs, but these scams can cause significant consumer frustration and harm. —Mark Carrier, President, B.F. Saul Company Hospitality Group and Vice Chair of AH&LA’s Board of Directors
What marketing tactics are they using to trick people?
The reports we’ve heard indicate these vendors are using a variety of tactics to confuse consumers into thinking that they are the hotel. These third-party companies may be using misleading websites that include logos and pictures of specific hotels. Sometimes, they even have customer service centers staffed with call center receptionists giving the impression that they work directly for a hotel. Other times, they offer fraudulent deals and reward programs. They may claim to have the best deals when they don’t actually have access to a hotel’s rates, or they make promises about points that simply don’t exist. —Andrew Rubinacci, Senior Vice President of Distribution and Strategy, IHG
What is the industry doing to fix the problem?
We are doing what we can to stop these misleading sites, but the problem continues to grow, despite our efforts. The hotel industry has sent numerous cease and desist letters to these entities, asking them to stop these tactics. However, once caught, these websites can often reemerge under a different name or temporarily stop these practices and then start up again after a period of time. Given the scope of the problem and the number of new cases, the cease and desist letters cannot keep up with the number of misleading companies. Further, since hotels don’t enter into contracts with these third-party vendors, we are unable to leverage a commercial solution to the problem.
We have reached out to search engines and online intermediaries to discuss how they can help address these issues, but so far these efforts have not been able to control the growth of this trend of consumer deception. We are urging regulatory agencies such as the FTC to also step in and help stop these misleading practices. —Drew Pinto, Vice President, Distribution, Marriott International
The FTC has a number of tools available to stop this behavior, which is why AH&LA is urging the agency to open an investigation into the rogue vendors. As well as working with the FTC, AH&LA is talking to lawmakers on Capitol Hill regarding further action. If a vendor has misrepresented itself to you or if you’ve fallen victim to a hotel booking scam, contact the FTC. You can visit ftc.gov/complaint to alert the agency to the issue and to file your complaint.
Maryam Cope is vice president, government affairs, at AH&LA.