Online scams are costing consumers $1.3 billion in bad bookings.
- Research shows an increasing number of consumers are misled into making hotel reservations through fraudulent websites and call centers.1
- As consumers increasingly move to mobile bookings, smaller screens also make it harder to differentiate between the scam site and the legitimate hotel’s website.
- 15 million hotel bookings occur each year and $1.3 billion go to bad bookings, including lost reservations, additional room charges, cancellation and booking fees, wrong accommodations and a lot of hassle.
Congress, the FTC, consumer groups, and others are taking action to stop online booking scams.
- Bipartisan leadership in the House and Senate has introduced legislation to help protect consumers.
- U.S. Representatives Lois Frankel and Ileana Ros-Lehtinen of Florida introduced legislation in the House of Representatives and U.S. Senators Steve Daines of Montana and Bill Nelson of Florida introduced legislation in the Senate.
- Members of Congress, from Senate Judiciary Committee Chairman Chuck Grassley, to Senator Marco Rubio to Representative Bill Shuster, have also requested government agencies to examine booking scams. And most recently, Senators Amy Klobuchar (D-MN) and Deb Fischer (R-NB) directly requested that the FTC investigate these deceptive practices.
- Congressional action is the beginning of greater consumer confidence, transparency and enforcement of the law.
- The Federal Trade Commission (FTC), the Better Business Bureau (BBB), AAA, and various other consumer advocacy groups have issued strong warnings about online booking scams.
AHLA worked with members of congress in the House and Senate to advance the Stop Online Booking Scams Act. This critical bill protects consumers and requires an FTC investigation. The bill also:
- Makes it easier for consumers to tell the difference between the actual hotel and fraudulent websites. Third-party hotel booking websites must clearly disclose that they are unaffiliated with the desired hotel.
- Empowers state Attorneys General to go after perpetrators in federal court – creating a precedent that will give scammers second thoughts about going after consumers booking rooms online.
- Companion legislation from the Senate also protects against “meeting pirates,” which are third-party companies that misrepresent themselves as the official lodging provider for a given convention or trade show.
The easiest and surest way to avoid scams is to book directly with the hotel.
- A recent consumer poll commissioned by AHLA revealed that a majority of those who have booked a hotel online say that they prefer dealing directly with the hotel (56 percent).
- The survey also found that nearly one-third of consumers who have booked online using an online travel company booking website say they worried about it, have personally experienced the following inconveniences when booking online:
- 32 percent got a room that was different than what was expected;
- 17 percent were charged unexpected or hidden fees;
- 15 percent did not get their rewards points;
- 14 percent were charged an extra booking fee;
- 14 percent could not get a refund for a cancellation;
- Nine percent had reservations lost or cancelled; and
- Three percent had their identity or private information stolen.
- Hotels and guests are urged to contact their state’s attorney general to make them aware of any scams occurring in their state – and to file a complaint with the FTC.
Technology and the ever-evolving online digital marketplace, from desktops to mobile phones to internet-enabled devices, have transformed the way guests book their hotel rooms and created new customer-oriented business models. Online hotel reservations are now occurring at 500 bookings per minute. However, there is an increasing number of rogue vendors using fraudulent websites and false advertising and other scams to trick consumers into thinking they are booking directly with the hotel – costing billions of dollars in bad bookings every year.
1 GfK Custom Research. (2015). Hotel Online Booking Sites. Retrieved from https://www.ahla.com/press-release/new-study-reveals-some-15-million-online-bookings-are-scams-rogue-websites