The long-standing friction between hoteliers and OTAs was
kicked up a notch last week as the trade associations representing each of
those groups engaged in a war of words and data over “rogue” OTA websites.
The hallmark of such sites, according to the American Hotel
& Lodging Association (AH&LA), is that they trick consumers into
believing that they are booking directly on a hotel’s website. The Travel
Technology Association (Travel Tech), the OTAs’ trade group, meanwhile,
defended the trustworthiness of the distribution channel it represents.
The AH&LA said that U.S. consumers book as many as 15
million hotel rooms each year, totaling more than $1.3 billion in revenue,
through “rogue” OTAs. And, citing a study compiled for it by GfK Custom
Research, the trade group said such bookings often resulted in corrupted,
inaccurate or nonexistent bookings.
The GfK survey, which polled a sample of some 1,000 U.S.
adults in July, found that about one in 17 people said they had booked through
an OTA that they had thought was a direct channel only to discover it was not.
Additionally, about a third of those surveyed who had booked through any OTA
reported experiencing “inconveniences” ranging from getting a room that was
different from what they had expected to not getting rewards points to not
being informed of added fees.
In all, about 3% of those surveyed said their OTA-booked
reservations had either been lost or canceled.
The sites the AH&LA termed “rogue” are in fact often
affiliates of OTA giants Expedia and Priceline Group. But the trade group said
that unlike the typical practices of their better-known parent companies, these
sites often intentionally mislead prospective guests into thinking they’re
booking direct by employing hotel logos, pictures and other visual cues.
Expedia is the most popular OTA among U.S. consumers, and it
alone has about 7,500 affiliates.
Americans will book about $53 billion in hotel reservations
online this year, according to Phocuswright. Combining that estimate with the
AH&LA’s numbers, it can be inferred that about 2.5% of those bookings may
have been clouded by guest confusion over whether the channel was an OTA or
direct hotel site.
“These findings clearly show that online hotel booking scams
have eroded consumer confidence among third-party vendors,” Katherine Lugar,
president and CEO of the AH&LA, said in last week’s statement. “Consumers
deserve transparency in knowing who they are booking with. That is why we have
been actively working with state and national government agencies, including
the FTC, as well as consumer advocacy groups, to ensure that consumers are
protected and can feel comfortable in the booking process. It’s always safest
to book directly with the hotel.”
A random Google search last week for hotels in New York, Los
Angeles and Kansas City generated listings predominantly from OTAs such as
Expedia and Priceline Group as well as from their better-known divisions such
as Hotels.com and Booking.com. However, they also produced results
from lesser-known booking entities Reservation-Desk.com and HotelsCombined.com.
Reservation-Desk.com is part of the TravelPass Group, while
HotelsCombined.com says it partners with both Expedia and Priceline’s
Travel Tech, citing an online poll of more than 2,000 U.S.
adults it conducted using SurveyMonkey last week, countered that almost 70% of
those sampled said they viewed booking through OTAs as “convenient and safe.”
Of those polled, 43% booked hotel rooms through OTAs, while 40% booked directly
through hotel websites.
“It is clear the American public not only relies on the
convenience of shopping across multiple travel brands in a single place, but
they continue to trust online travel companies with their vacation and business
travel itineraries,” Travel Tech President Steve Shur said in Monday’s
Tracking what percentage of OTA hotel-room bookings are
problematic and how that figure compares with the percentage of problem
bookings made on hotel-direct websites is difficult because there have been no
known impartial studies conducted on the subject.
Henry Harteveldt, travel industry analyst with Atmosphere
Research Group, estimated that a decade ago, as many as 10% of OTA hotel
bookings might have been inaccurate, but he said that percentage has likely
dropped substantially as OTA connectivity with hotels has improved.
What’s more, deciding what constitutes an inaccurate booking
is challenging, he said, because a hotel’s definition of a “superior” or
“deluxe” accommodation can differ, sometimes substantially, from that of the
guest, and there are no standard guidelines.
Regardless, hotel and OTA representatives continue to battle
for distribution share as hoteliers look to cut costs by bringing more online
bookings in-house, while OTAs look to maintain distribution share while
battling each other.
In a report last November, Phocuswright predicted that
between 2012 and 2016, OTAs will have gained two percentage points in their
share of hotel online bookings, bringing their collective share to 48%,
compared with 52% for hoteliers’ own sites.
In August, the AH&LA publicly opposed Expedia’s pending
$1.34 billion acquisition of smaller competitor Orbitz Worldwide, arguing that
the deal would reduce competition. Among the AH&LA’s arguments was that
both Expedia and Orbitz had affiliate relationships with “thousands of smaller
websites,” many of which mislead prospective guests into thinking they’re
booking directly through hoteliers.
Expedia completed its Orbitz acquisition last month after
the agreement was approved by the Justice Department. The AH&LA said it was
“disappointed” by the Justice Department’s decision.
Expedia, Orbitz and Priceline control more than 95% of U.S.
consumers’ travel bookings through OTAs.