Thousands of Americans are preparing for the unofficial start to summer, and with it, the busy summer travel season. AAA estimates that 41.5 million people will travel over Memorial Day weekend alone, an increase of nearly 5 percent over last year and the most in more than a decade. If your summer travel plans include an overnight stay, there’s a good chance you booked a hotel room online. In fact, hotel bookings make up 15 percent of all U.S. ecommerce, with 500 online bookings happening every minute.
Unfortunately, all too often unsuspecting consumers who are booking travel online fall prey to shady deals, scams, and misleading marketing tactics—resulting in extra fees, lost reservations and ruined vacations. We recently polled consumers and found that 23 percent of travelers report being misled by third-party traveler re-sellers on the phone or online. That translates into 28.5 million hotel stays and $5.2 billion in fraudulent and misleading hotel booking transactions last year alone.
Among those who say they were misled, 46 percent say they were charged extra fees on their credit card; 44 percent made a special room request that was not relayed to the hotel; and 34 percent had their reservation lost and had to book another room, losing the cost of their original reservation.
This is not a new problem as AHLA first began educating consumers about online booking scams three years ago. But it has become a pervasive one, and the Federal Trade Commission has even taken notice. Last December, the Commission settled a federal lawsuit with Reservation Counter, LLC, a third-party hotel booking reseller and two related companies accused of using call centers and websites to mislead consumers into believing they were booking, and speaking, directly with a hotel.
The proposed order settling the FTC’s complaint will bar the defendants from such deceptive conduct in the future. It also specifies changes so that consumers have the information they need to make informed hotel room reservation decisions and that they know who they are doing business with.
While we applaud the FTC’s efforts, we also believe the government can and should do more to protect consumers. Consumers seem to agree, with 72 percent agreeing that the government should make it a higher priority to enforce consumer protection laws against third-party hotel resellers.
That’s why AHLA is taking its message to Capitol Hill this week, talking to lawmakers and staff about this problem and urging Congress to pass the Stop Online Booking Scams Act, or SOBSA, a bill that would protect consumers by increasing the transparency and security of the online booking process. More than 30 bipartisan co-sponsors agree that we must do more to protect consumers from online booking scams. We’re asking more lawmakers to step forward to co-sponsor and vote in favor of this common-sense legislation. It’s not enough to simply crack down on bad actors after the fact, and after vacations have already been ruined. We must make it harder for them to mislead or defraud consumers in the first place. This legislation is an important step forward to ensure consumers know who they are doing business with online.
In the meantime, AHLA will continue to educate consumers about hotel booking scams and how to protect themselves. After all, guests are the lifeblood of our business, and we want them to have the best experience possible, from booking to checkout. But Congress has the power to do even more. By passing SOBSA, they can bring more transparency and protection to the online booking process, benefiting millions of consumers across America.
Katherine Lugar, President & CEO, American Hotel & Lodging Association.
