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Hotels Call Out OTAs for Deceptive Practices

The American Hotel & Lodging Association (AHLA) has launched a new Search Smarter consumer awareness campaign aimed to put a halt to what it describes as misleading marketing strategies by online travel agencies and travel search sites, as well as to fight rampant bookings fraud.

The group particularly focuses on Expedia and Priceline’s dominant control of 95% of the online travel market, describing them as creating “false choices” for consumers by secretly operating multiple separate brands. “The overwhelming majority of consumers (74%) are unaware that they’re just comparing between the same two companies: Expedia and Priceline. Expedia owns thousands of online affiliates, including Trivago, Travelocity, Hotwire, Hotels.com, Egencia, CarRentals.com, Classic Vacations – controlling 75% of the online travel marketplace. Priceline owns Kayak, Booking.com, Agoda, Rentalcars.com as well as thousands of online affiliates.”

The Association also raises concerns about the marketing strategies of these online agents.

“Recent data shows 79% of consumers use ‘digital middle men’ because they believe they will find better deals. That belief is fueled by misleading marketing practices like ‘slash’ or deep discounted pricing, which is not based on an actual room rate set by the hotel. “Almost half of consumers (45%) have reported being influenced by messages that say: ‘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.”

Online booking scams coordinated through fraudulent websites and call centers, AHLA says, are also on the rise, with mobile sales channels particularly vulnerable.

“In 2015, just 6% of travelers reported booking on what they believed was a hotel’s official website, only to find they had booked on a fraudulent site not affiliated with the hotel. “Just two years later, the number of travelers who have experienced this has nearly quadrupled to 22%.

That amounts to 55 million hotel bookings of this type each year, translating to some $3.9 billion in bad bookings.

“As consumers increasingly move to mobile booking, smaller screens also make it harder for consumers to differentiate between the scam site and the legitimate hotel’s website.”

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