Pressure Forces Company to Ax Program Targeting Hotels Not Opting-In to Pay-to-Play System
Washington, D.C. – September 22, 2016 – Expedia, the largest online travel agency (OTA) – controlling 75 percent of the online travel marketplace, has admitted to “dimming” hotel listings on expedia.com and affiliate sites and has agreed to end the deceptive practice.
The tactic—meant to disadvantage some hotels that have not opted in to some of the OTAs “sales programs” involving a pay-for-play scenario—has severely limited consumer choice by creating a lack of transparency in the online booking process, by displaying only certain search results or removing photos and other important information from some listings to make those lodging facilities look less attractive. There have been no clear disclosures that inform consumers of the search bias. Therefore, consumers have been under the illusion that their search results are organic – when in fact they are far from it.
“With some 500 online hotel bookings being transacted every minute, it’s more important than ever to ensure that our guests know what to look for to ensure they get what they want and need out of their reservation and their travel experience,” said Katherine Lugar, president and CEO of the American Hotel & Lodging Association (AH&LA). “Though online travel agencies are an important partner to our industry, the rise of some deceptive marketing practices to manipulate search results is disturbing, particularly because many consumers are none the wiser.”
After merging with Orbitz earlier this year, Expedia now controls 75 percent of the online travel marketplace, and together with Priceline, the second largest online travel agency, they control 95 percent.
“With increased consolidation in the online travel marketplace, consumer transparency is more important than ever. With these tricky tactics, consumers should be cautious when searching online. These practices jeopardize consumer trust in the online booking system. In contrast, the hotel industry prides itself on offering consumers ample choice, both in their booking experience and how they book that hotel stay,” said Lugar. “No matter where guests stay, it’s always safest and best to book directly with the hotel.”
With amplified concerns that consolidation could be leading to these kind of activities, these issues are being raised on Capitol Hill and in government agencies. Indeed, U.S. Senator Amy Klobuchar (D- MN) encouraged the Federal Trade Commission and the Justice Department earlier this year to look into these marketing tactics to see if they are deceptive to consumers. AH&LA cautions consumers to be skeptical of rankings offered through online travel company websites that don’t offer proper disclosures about criteria used.
Serving the hospitality industry for more than a century, the American Hotel & Lodging Association (AH&LA) is the sole national association representing all segments of the 2 million-employee U.S. lodging industry, including hotel owners, REITs, chains, franchisees, management companies, independent properties, bed and breakfasts, state hotel associations, and industry suppliers. Headquartered in Washington, D.C., AH&LA provides focused advocacy, communications support, and educational resources for an industry of more than 54,000 properties generating $176 billion in annual sales from 5 million guestrooms.