Third-Party Online Booking Can be Deceptive

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Public Health Watchdog Breaking News
Public Health Watchdog Breaking News

When booking a hotel or airline ticket, most people research prices, accommodations, and policies, online. However, care must be taken when using third-party booking such as Expedia or Orbitz. Recently, the hotel industry has taken exception with online travel agencies, which may charge high commissions when they book rooms on behalf of hotel companies. To attract customers, hotels are offering lower prices and better advantages to members of their loyalty programs that book directly, according to MarketWatch.

Expedia Inc. and Priceline Group Inc., have made the online third-party travel industry into something of a duopoly, a situation in which two companies own all or nearly all, of the market for a given product or service. Expedia owns Cheap Tickets, Hotels.com, Hotwire Group, Orbitz, Trivago, and Travelocity. Priceline Group’s holdings include Booking.com and Kayak.

Comparison Shopping

For the public, the choice between booking directly with a hotel or an airline and going through a third-party seems to be a generational one, according to Mark Blutstein, a research analyst with travel research firm Phocuswright. Older travelers and those who have saved loyalty or reward points are more likely to reserve a hotel room or buy airline tickets directly. Younger travelers, it seems, are focused on price. They tend to be attracted to sites like Kayak or Travelocity in order to do comparison shopping. “They’re looking for the best deal they can get,” said Blutstein.

Frequently, booking directly with a hotel or an airline may yield significant benefits over booking with a third-party site like Expedia. But the third-party site can still be an important tool for all kinds of travelers, when used correctly, reports MarketWatch.

National law firm Parker Waichman LLP has extensive experience in all types of litigation. Attorneys at the firm are available to answer any legal questions for individuals seeking information to consumers who may have been denied a refund from a third-party booking website.

Why Book Directly?

Consumers often select from among three different rates when booking with a hotel directly, said Bjorn Hanson, a professor with the New York University Preston Robert Tisch Center for Hospitality and Tourism. These include a public rate without discounts, a discounted rate for members of loyalty programs, and a discounted non-refundable rate. Hanson said, “Almost always, one of those three will be as low or lower than the rate through an online travel agency for a similar arrangement.”

This is in part because many sites like Expedia charge hotels a commission for the booking they get, which is on average, 15 percent, said Hanson. A spokeswoman for Priceline Group said that Booking.com does not charge a commission to hotels, but did not comment on other sites owned by the company, MarketWatch reports.

The result is that hotels do not always offer up their best deals on these sites, as they are already spending for the booking. “There’s some price cutting we’re seeing in the marketplace to drive direct bookings,” said Dara Khosrowshahi, chief executive of Expedia.

By the same token, air travel people will usually save by booking directly with an airline. In recent times, airlines have begun charging a fee when consumers book through sites like Expedia, making those prices less competitive.

Better prices are not the only reason to book directly with an airline or a hotel. Customers who go straight to the airline or hotel for their reservations may receive preferential treatment in many cases, such as upgrades or free services for example, internet. There is also a greater possibility that special requests made at the time of booking will be honored when it is done directly. “Chances are you’ll be treated a little better, but sometimes you do need to call it out to them,” said Gautum Lulla, president of Travel Tripper, a hotel booking technology provider.

Booking directly is also an advantage in emergencies, such as when a traveler misses a flight or needs to cancel a reservation, according to Scott Mackenzie, founder and editor-in-chief of Travel Codex, a website that reports on travel loyalty programs. “Whenever there’s a delay or cancellation, it makes it a lot easier to re-book the ticket,” Mackenzie said. “There also may be more flexibility with the rules.”

Fighting Online Booking Scams

Three member of the Florida congressional delegation are attempting to crack down on online booking scams. In 2016, U.S. Representatives Lois Frankel, and Ileana Ros-Lehtinen, teamed up to offer the “Stop Online Booking Scams Act.” This would require full disclosure for third-party hotel reservation websites with violators facing fines of up to $11,000 and having their websites closed down. It would also give state attorneys general more power to pursue action to combat fraudulent websites and streamline the reporting procedure to the Federal Trade Commission (FTC), reports the Sunshine State News.

The two South Florida congresswomen quoted figures from the American Hotel & Lodging Association (AHLA) which backed the proposal and found almost 15 million Americans were cheated out of $1.3 billion due to conmen using scam hotel booking websites. With support from some of their colleagues in Congress, it was noted that it is imperative that these deceptive practices are addressed and that everything possible is being done to eliminate these alleged perpetrators from further taking advantage of consumers, the Sunshine State News reports.

Legal Help and Information

If you or someone you know has had a problem with third-party online booking, attorneys at Parker Waichman LLP offer free, no-obligation case evaluations. We urge you to contact us at 1-800-YOURLAWYER (1-800-968-7529).