Third party hotel booking scam

Let this posting be a warning about third-party hotel booking sites. Let me say that not all of them are bad and they can provide a service in some situation in terms of helping find and select a room.

However, when you know what specific hotel you want, but don't know the hotel web site, it can be easy for a third-party booking site to be listed first in the search and come off as the actual hotel. For example, consider this search for the Longhorn Hotel & Casino in Las Vegas through Google. Note that reservations.com pops up before the actual Longhorn.


Click on any image for larger version.

Clicking on Reservations.com, the customer is led to believe the room price is $38.



However, here is what you see when you click to reserve it. I can understand taxes, but what's this $19.99 service fee.



This $19.99 fee is non-refundable, as you'll see if you click the arrow by "Room cancellation policy, hotel information and fees."



What happens if you book directly at the Longhorn? Here is their screen. Same $38 room price, but no third-party service fee.



I could also rant about the $7.90 "amenity fee," but I've been ranting about hidden resort fees and how they should be illegal for years and won't go into that here.

I'd also like to add that it has happened to me a few times that third-party booking sites simply never passed on the reservation to the hotel and the hotel subsequently booked up.

I fell for this myself a few months back. Fortunately, I was able to get a full refund from the company, no questions asked.

I use third party booking sites all the time. I will look at 10 to 20 different sites trying to find the lowest rate. With hotels many times you can find a consolidator that has a block of rooms reserved selling for less than the hotel.

I have also found lower rates very often when using a site based in another country. Book through U.K., Germany, Spain, etc.

Quote: DRich

I have also found lower rates very often when using a site based in another country. Book through U.K., Germany, Spain, etc.

Care to name one?

I was intrigued by the word "scam" in the title. But what's the scam?

Paid ads usually do show up first in searches. You can't tell the difference between a third party site and a hotel's actual site?

Quote: AlanMendelson

I was intrigued by the word "scam" in the title. But what's the scam?

Paid ads usually do show up first in searches. You can't tell the difference between a third party site and a hotel's actual site?

That reservations.com site is almost certainly breaking google adwords terms and the terms of their relationship to the hotel, by bidding on the keywords "Longhorn Hotel". It's quite a common (sneaky) trick to get their ad shown even above ads from the hotel. It's only lightly policed by google adwords. It's a scam to the extent it's 'Passing off' to the casual observer.

Quote: OnceDear

That reservations.com site is almost certainly breaking google adwords terms and the terms of their relationship to the hotel, by bidding on the keywords "Longhorn Hotel". It's quite a common (sneaky) trick to get their ad shown even above ads from the hotel. It's only lightly policed by google adwords. It's a scam to the extent it's 'Passing off' to the casual observer.

It's Google's business model to put paid ads first. That's how it makes money.

There's no scam here.

Quote: Wizard

Let this posting be a warning about third-party hotel booking sites. Let me say that not all of them are bad and they can provide a service in some situation in terms of helping find and select a room.

However, when you know what specific hotel you want, but don't know the hotel web site, it can be easy for a third-party booking site to be listed first in the search and come off as the actual hotel. For example, consider this search for the Longhorn Hotel & Casino in Las Vegas through Google. Note that reservations.com pops up before the actual Longhorn.

***NOTE: Not the entire post has been quoted, primarily so I'm not reposting the same pictures again, but some words were also clipped.***

I agree with Wizard on this one, though some TPW's can be useful. If you own a hotel or work in the industry, they've kind of become a necessary evil because they have their own rewards programs, (sometimes) so they generate loyalty with certain guests as a result. For example, some people would just automatically go to Hotels.com when they want to book a room.

The booking sites will also occasionally have, "Package deals," by which you can book a room, flight and rent a car all in one place. More often than not, (based on when I have looked) the guest would actually save money by doing all three of these things separately COMBINED with looking for the best deal at each of the three entities. However, it is often cheaper to do this than take the, "Rack," rate of the hotel, the standard fare for the flight and whatever term the industry uses as the basic price for renting a car.

Anyway, this is the first I think I've seen of a, "Service Fee," which seems to be for no purpose other than booking the room. Most TPW's (when I worked hotels) were compensated in one of two ways:

1. They would give us (the hotel) a, "One Shot," credit card and we would be showing a rate in our system less than what they charged the customer. Naturally, we were not to tell the guest what the hotel was getting paid. However, what we would get paid was generally just our rack rate less 15-20% depending on whether or not we wanted to pay a little bit of a higher percentage for better placement on the area searches.

2. In some cases, the hotel just charges the guest directly and receives a monthly invoice from the TPW for how much they are owed. Honestly, this method is more of a hassle (for the hotel) than it is really worth, because then you have to take the time to cross-reference all of the guests they are billing you for and make sure that all of those guests actually stayed there. Usually all guests who booked will be on this invoice, even if they would later go on to cancel the reservation. Obviously, you do not want to be paying commissions on a guest who did not actually end up staying there.

WHEN TPW BOOKING CAN BE USEFUL:

If you're really willing to put the time into it, TPW booking can be useful if you're willing to scour all of the TPW sites looking for the best price for a specific property. This becomes even more true with independent hotels or hotels that are not part of major franchises.

The reason for that is because the independent hotels or small franchises often have to communicate with each TPW directly (either changing rates online or by phone) in order to change the rates for specific days. If the hotel forgets to do that at one or more sites, then you might be able to find their standard, "Nothing is going on this weekend/weekday," rate and get their regular rate on what would otherwise be a, "Special event," weekend or weekday.

If you're booking a hotel at a major franchise, while I am sure there are exceptions, there will often be no real benefit in using a TPW for this purpose. Most major franchises enforce a concept known as, "Rate parody," which means that, after discounts, the hotel is not permitted to offer a lower price on a TPW than would be the cost to guest on a franchisor's own site. Also, any rate changes I did on our systems would reflect on TPW's basically instantly.

Another thing that you can sometimes do if you see a lower rate is to then call the hotel directly and tell them the rate you found on a TPW, at which point, the hotel will often match that rate on a direct booking. This can be beneficial because, by booking directly through the hotel, you will often get a more favorable cancellation policy. The hotel also likes this because they are cutting out the middle man and also probably making more on the room than if the guest had used the TPW. When I worked hotels, if you told me you found a particular price on Priceline and it was even a rate within reason, I would match it without even confirming....because even if the Priceline rate was $10 more than that, we'd still be making less money by having the guest book that rate through Priceline.

DOWNFALLS OF TPW BOOKING

1. The biggest downfall is that you will often end up paying more than if you had just booked directly through the hotel. While Wizard found an example of that via some ridiculous service fee, sometimes (in my experience) that was true just by way of the direct rate. Because of the percentage we (the hotel) was eating on the booking, we would often give a higher rate to the TPW's while having a lower rate on the franchise website and an even lower rate than that available if you just called us directly.

The reason why, quite simply, is because we had to pay the booking site a percentage, one way or another. Even if someone booked through, "Our," website, that was even an extra 5% that went to the franchisor on that booking.

2. The second biggest downfall is that the cancellation policies are often more strict than booking directly through the hotel. I couldn't tell you why, other than the site thinks they are entitled to stricter policies than the entity that's actually providing a guest with a room. (Stream of profanity omitted)

Anyway, whether or not they will let you cancel outside of the policy is fairly arbitrary, and if I had to guess, might depend on how often you use their site.

Another thing is that, if they won't let you cancel (meaning, they refuse to even call the hotel and ask), there's nothing the hotel itself can do for you...even though people often think it's somehow the hotel's fault. Anytime a TPW called me for a late cancellation, the answer was almost always, 'Yes,'--especially if we were going to sell out regardless--because TPW guests are more likely to be a PITA anyway. They're doing me a favor by cancelling if I am going to sell out anyway, because I'm also going to almost certainly sell the room for more than I was getting from them.

Of course, if we weren't going to sell out, "REQUEST DENIED!" I'll take the money, thank you. Those are the TPW's cancellation policies, I didn't write them. If the guest had just booked directly, then they may well still be within our cancellation policy, and even if not, we were pretty flexible about late cancellations as long as it wasn't absurdly late. (You couldn't call at midnight and ask to cancel your reservation for that day. Although, if you claimed to have car problems--or something like that---I might offer to cut the charge in half)

Finally, it's possible that you cancel within their window...but then you're counting on them to put it in correctly and ALSO to communicate that information to the hotel if it is one where the hotel has your credit card---as opposed to a one-shot card from the TPW. If the TPW doesn't communicate the cancellation to the hotel, and I have your credit card, you're getting charged. Not my fault. Take it up with them. So, if you do book TPW, I advise first cancelling with them and then confirming the cancellation by calling the hotel directly.

If that happens and the TPW calls me to reverse the charges, (even though THEY failed to communicate the cancellation to me) I'm going to very professionally and politely tell them what to do with themselves. The reason why is because, if the guest did indeed cancel and the TPW forgot to tell us, I know the TPW will eat refunding the guest. They basically have to.

Or, you could just book hotel direct and avoid all of this crap.

3. OTHER LITTLE THINGS:

A. You have to count on the TPW to communicate the booking to the hotel and the hotel to receive it. Some TPW's and independent hotels (or small franchises) still have the TPW fax the reservation to the hotel. I don't even need to explain why this could be problematic. If you are going to book TPW through a hotel such as an independent, then I recommend calling the hotel itself a couple hours later and confirming they received your reservation.

B. On some occasions, you will not qualify for offers/rewards through the hotel itself...and the hotel has/had that option. For example, if you were part of the franchisor's rewards program...then we had to eat an ADDITIONAL 2.5% of the rate that we had to pay to the franchisor itself. Except, you booked TPW, so screw that. We're just going to take your rewards number off of the booking and keep as much money as possible. If you call and complain, we MIGHT put it back, but as of the time I last worked there, we didn't have to.

C. If you have a room complaint, but it's a reservation where the TPW itself charged you, then you're pretty screwed. If you call the hotel or franchisor, then they will refer you back to the TPW to lodge your complaint with them. The TPW will then call me to negotiate a refund or partial refund for the guest, at which point, I will politely and professionally request that they s**k it. Screw them. Screw the guest for booking with them. Screw everyone. If they think the guest is entitled to a partial refund, then let them give the guest their cut of the rate.

Or, you could just book hotel direct and avoid all of this crap.

Seriously. If you had any complaint whatsoever about your room, even if it was ridiculous, I'd usually offer to take 25% off of your bill just to get rid of you. I also would prefer you not lodge your complaint with the franchisor for a variety of reasons.

D. Authorizations galore! Even though the TPW has already charged you, if it's a one-shot credit card situation, then I have no way to charge incidentals to that credit card. As a result, I will have to get a secondary credit card from you (the guest) which I will then preauthorize for the room rate + $100 in case you break anything or the housekeeper goes to clean your room (on the scheduled checkout date and after checkout time) and your stuff is still in there.

Whereas, had you booked direct, we'd already have your credit card...and while our policy said we COULD authorize an additional $100 for incidentals, I usually didn't.

E. Room choice. If you booked TPW, then you are absolutely NOT getting a free upgrade to anything better than what you booked. Further, if I had a room with a minor problem (or one that had been renovated less recently) of that room type, that's pretty automatically the one you're getting.

Also, just about any booking site (even direct) will say that your room type is not 100% guaranteed. If you book TPW, then your room type is 0% guaranteed. Suppose I have a non-smoking room with two queen beds, but then a company comes in and needs that room for some workers...and they want the room for two weeks...well, I hope you like your room with one queen bed and a pull out sleeper sofa, because that's what you're getting. Of course, had you booked direct, I'd never think of it.

So, book hotel direct whenever possible and avoid this crap! If you find a better rate online, the manager will usually match it.

Quote:

I'd also like to add that it has happened to me a few times that third-party booking sites simply never passed on the reservation to the hotel and the hotel subsequently booked up.

Probably, but not 100% automatic. If they're still going by fax, then it's possible that the hotel misplaced the fax. Also, the hotel might have cancelled your TPW reservation and simply claimed to have not received it in the first place because they were able to get a more favorable rate (for the hotel) from someone booking direct.

I'm sorry, but that's just how it works. If you book TPW, you're the first to get your room type changed if I need your room type for someone else. If we're overbooked (or we can get a long-term stay), then you're the first to have your reservation cancelled--by the hotel. Naturally, they'll deny ever getting it.

I never cancelled a TPW reservation, but I have kicked them out of their intended room type. Honestly, the guest fails to actually book the room type they wanted half the time anyway.

And, for the longest time, Expedia's system would electronically put the booking in OUR system, but their system didn't know how to differentiate between smoking and non-smoking because we coded the room types differently than they did. True story. I swear on my life. I'd NEVER move someone from non-smoking to smoking without them asking, but the way the reservation was sent, Expedia was telling us they wanted a smoking room.

AND THEN, Expedia got tired of calling us every time to make sure the smoking/non-smoking was correct, so THEY ASKED US if WE would change the way we code the rooms in our system. What unmitigated gall! I told them to blow me, of course.

Quote: Wizard

Care to name one?

I will often use a service like Trivago that compares the prices from hundreds of different sources. Many times the cheapest will be a foreign company.

Thanks for the insight, Mission! That was a lot of info. It feels like it could turn into an article.

I usually only use TPWs to get an idea of how much rooms/flights/cars cost. And I agree with you -- 99.54% of the time, the price is no better than booking directly with readily available discounts (AAA, AARP, Resident, etc.). And often, booking direct will get me other perks. One chain that I frequent gives free Wifi for booking direct, while TPW bookers have to pay extra.

I did have a question about matching TPW prices. Would you honor pricing from 'opaque' sites like Hotwire? While they don't provide any hotel names before you buy, they often provide enough info to pinpoint which hotel it is. And often their prices are better than the best advertised price on the hotel's website, occasionally much better. So, if i called you and said I see a price of $X on Hotwire, but your best published discounted rate was, say $1.5X, would you give me the room for $X or tell me that that's not your property I'm looking at and to go pound sand?

I'd also be curious to know if bookings through 'opaque' TPW's were treated any differently than other TPW's from the hotels perspective

Quote: Mission146

E. Room choice. If you booked TPW, then you are absolutely NOT getting a free upgrade to anything better than what you booked. Further, if I had a room with a minor problem (or one that had been renovated less recently) of that room type, that's pretty automatically the one you're getting.

Ha! Among friends and family, we have a joke about this -- we call it the "Hotwire Room." As in, "Yeah, they stuck us in the Hotwire Room," which meant that it was right next to the elevator, or at the very end of the corridor facing the interstate, or oddly shaped/smaller, etc.