New Research Reveals Online Hotel Booking Scams Are on the Rise, Duping Consumers, Translating to Nearly $4 Billion Each Year
Hotel Association Launches ‘Search Smarter’ Campaign to Raise Awareness of Deceptive Online Marketing Practices, Focus on Transparency
Every 60 seconds, Americans make 500 hotel bookings online. And new research reveals that online scams and fraudulent sites are on the rise. 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 site – websites that use a variety of marketing tactics to mimic hotel websites but are 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, new evidence reveals consumers are not getting the deals they think they are from third-party booking sites. A poll commissioned by the American Hotel and Lodging Association (AHLA) details the extent to which online travel agencies can mislead consumers, 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.
To address these issues, AHLA today announced the launch of a new “Search Smarter” awareness campaign, aimed at helping travelers avoid lost reservations, additional fees, and potentially ruined vacations. “In today’s increasingly digital marketplace, consumers rely on the comfort and ease of online hotel bookings,” said Katherine Lugar, president and CEO of AHLA. “Unfortunately, research reveals that as online bookings have surged, so have online booking scams. Too many consumers have been duped by these bait and switch websites. This kind of deceptive behavior cannot and will not be tolerated.”
A closer look at online travel agencies and their marketing tactics reveals a deceptive pattern that can lead to false choices, false discounts, and a false sense of urgency throughout the booking process.
- There has been an astounding increase in the number of consumers who have fallen victim to booking scams by fraudulent websites – jumping from 6 percent to22 percent in just two years.
- The overwhelming majority of consumers (74 percent) are unaware that when they comparison shop among these “digital middle men,” – Trivago, Kayak, Expedia, Orbitz, Hotels.com, Travelocity, Booking.com, and others – they’re comparing the same two companies: Expedia and Priceline. Together, they control 95 percent of the online travel market.
- An overwhelming majority (79 percent) of consumers believe these “digital middle men” will yield better deals – a belief fueled by misleading marketing practices such as extreme discount pricing that is not based on an actual room rate set by the hotel.
- Nearly half of consumers (45 percent) are influenced by misleading messages disclosing a sense of urgency. For example, messages like: “Book now! Only two rooms left!” are not based on room inventory from the hotel, but a tactic used to entice consumers to book hastily.
“Our message is simple – look before you book, slow down, and search smarter,” said Lugar. “Given the tremendous financial burden booking scams place on consumers, and the confusion caused by misleading marketing practices, we recommend booking directly with hotels or with a trusted travel agent, as that’s where you’ll often get the best value and the best experience. It may take a few extra seconds, but it could save you countless hours of aggravation.”
To learn more about how to spot scams and ensure the best possible booking experience, visit: www.ahla.com/searchsmarter.