Expedia, Kayak, Booking.com and other online services like them have become hugely popular websites for finding a room while traveling. They handle the haggling for you, and they often find you a better deal than you could get yourself.
They’re also very convenient. You enter the city and the dates you need a room, they quote you multiple rates — along with details about the respective hotels’ location, amenities, etc. If you book a room with a certain hotel, they pay the service a small commission to Expedia (or whichever service you used).
The competitive pressure for paying guests lowers rates across the board. Everyone benefits.
Well, except for the hotels who now have to offer their customers a better deal, lest they choose the competition instead. For the hotel industry, such transparency and competition is a big problem that demands a government solution.
The American Hotel and Lodging Association (AHLA) is now arguing that it is “unsafe” to book a room via online travel sites, which would surely come as news to the millions who have used them. Amazingly, they have already succeeded in finding support in Congress after twisting the arm of Arizona Rep. Paul Gosar, R-Ariz., who has sent a letter to the Department of Justice demanding an “investigation” of Expedia and other similar websites.
Senate Judiciary Committee Chairman Sen. Chuck Grassley (R-Iowa), who oversees the powerful Federal Trade Commission (FTC), recently sent a letter urging “action.” Grassley appears to have bought into the claim made by the hotel lobbyists that Expedia and other third-party sites are somehow tricking consumers into believing they are actually booking their accommodations directly — i.e., that consumers are too stupid to know the difference between Expedia.com and Marriot.com.
Even if they do not know the difference, why does it matter? No allegation of fraud has been made. No one argues that Kayak has been misleading people about the rooms or the rates. If any such thing could be proven — or even plausibly asserted — you can bet the AHLA would be screaming bloody murder about it. But they aren’t — and their silence is deafening.
The only issue here is that hotels are forced to offer better deals, and they don’t like it.
AHLA has so far spent at least $250,000 to protect member hotels from the competitive pressures of the free market, to increase their profit margin not by offering better rooms or superior service, but by forcing people to pay more for what they currently get for less — to limit choice and transparency by suppressing online information about what’s available.
Smaller hotels that aren’t AHLA members are particularly vulnerable on this score. If not for online travel services, you might not even know there’s a room available across the street from the “big name” hotel that’s just as nice (maybe even nicer) for 30 percent less. Instead, you’d pay full price for the name-brand room, which seems to be exactly what AHLA is hoping will happen.
This is of a piece with the lawsuits against government harassment targeting Uber, which committed the unpardonable crime of providing a lower-cost alternative to traditional taxis. The same specious claims about “safety” were trotted out in that case. But the bottom line motivation is, and always seems to be, money and a desire to get it while evading competition in the marketplace. No actual consumers are complaining about Uber, and no actual consumers appear to be upset with online travel services.
Unless AHLA and its member hotels can provide evidence that consumers are being harmed in some way by third-party booking services, they don’t have a point. Instead of lobbying government to reduce competition, they should focus on doing a better job of providing services at a fair price.
Eric Peters is an automotive columnist and author who writes frequently about civil liberties and regulatory issues. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
