Parker Waichman LLP is actively investigating class action lawsuits on behalf of consumers who were denied lawful refunds when booking hotel rooms through third-party booking sites like Reservationdesk.com and Reservationcounter.com. The firm’s attorneys are also available to answer questions related to other issues involving these websites, including booking scams where the site books nonexistent rooms.
Booking a Hotel
Consumers can face a bewildering array of choices when they want to book a hotel room.
Many travelers turn to third-party hotel reservation websites such as Reservationdesk.com and Reservationcounter.com to gather information about room price and availability and to book hotel rooms. The hotel’s own website may even direct consumers to third-party reservation sites. But many consumers are not aware that, if they must cancel their reservations, the third-party website may refuse to refund their money, even in circumstances in which the hotel itself would refund the money because the cancellation falls within the hotel’s cancellation policy. Most hotels permit cancellations without a fee up to a certain time before the reservation. Travelers, however, have found that the third-party book sites are not abiding by cancellation policies.
Third-party hotel reservation websites often charge a service charge in addition to the cost of the reservation. Some of the sites legally refund the room reservation costs but keep the service charge when the consumer cancels a booking. Consumers need to educate themselves about the differences among travel sites. Some, like Expedia, function like a travel agency, while other sites, like Kayak, are primarily research sites, and they direct the traveler to the airline or hotel site to make the booking.
Bayer’s Hotels Battle Third-Party Reservation Sites
The hotel industry is engaged in a battle with online travel agencies, which charge commissions when they book rooms on behalf of hotel companies. These policies can vary from one third-party site to another. Booking.com, for example, uses a “pay-when-you-stay” model. To woo customers to make direct book bookings, hotels are offering better prices and perks to travelers who join their loyalty programs and book reservations directly through the hotel, MarketWatch reports. Loyalty programs offer perks and rewards, including upgrades or free services, like free breakfasts, free internet, or premium cable in the room. Gautum Lulla, president of Travel Tripper, a hotel booking technology provider, says there’s a greater chance a traveler’s special requests will be honored when the booking is done directly with the hotel.
Through loyalty programs, travelers may earn free nights at the hotel chain after a certain number of paid nights. These programs may work well for travelers who stay frequently with the same hotel chain. In many instances, the traveler’s preferred hotel chain does not have a hotel convenient to the traveler’s destination. Hotel chains that cater to business travelers may not have hotels in vacation areas. Travelers turn to hotel-booking sites, despite the potential economic disadvantage.
Mark Blutstein, a research analyst with the travel research firm Phocuswright, notes the choice between booking directly with an airline or hotel and going through a third-party seems to divide largely along generational lines. Older travelers and people who have earned loyalty or reward points are more likely to book a hotel room directly. Younger travelers, with smaller budgets and greater concern about price, tend to favor sites where they can compare rates. “They’re looking for the best deal they can get,” Blutstein said.
According to MarketWatch, third-party sites are good tools for price comparisons. A traveler may quickly find out which hotel chains are available at a particular destination and compare room rates.
Bjorn Hanson, a professor with the New York University Preston Robert Tisch Center for Hospitality and Tourism, explains that, when a consumer books a hotel reservation directly with the hotel, the consumer is usually offered a choice of three room rates. There is a public rate with no discounts, a discounted rate for members of the loyalty program, and a discounted non-refundable rate. One of the three rates will likely be lower than the rate through an online travel agency, Hanson says, because the third-party booking sites charge the hotel a commission for the bookings they secure. The average commission is 15 percent, according to Hanson. Expedia would not disclose its commission. A spokeswoman for Priceline Group said that Booking.com does not charge a commission to hotels, but did not comment on other booking sites owned by the company.
Because the commissions charged by the booking sites cut into the hotel’s profit, hotels often do not offer their lowest rates on the third-party sites. Dara Khosrowshahi, chief executive of Expedia, said, “There’s some price cutting we’re seeing in the marketplace to drive direct bookings.” Consumers who have already paid a commission and a rate above the best direct-booking rate may take another financial hit if they cancel their reservation.
The hotel may be more flexible about its rules when dealing with the consumer directly.
Direct booking may prove useful in an emergency, for example, when the traveler misses a flight or needs to cancel a reservation, according to the website Travel Codex, which covers travel loyalty programs. “Whenever there’s a delay or cancellation, it makes it a lot easier to re-book the ticket,” Travel Codex founder, Scott Mackenzie, said.
Even travelers who are inclined to choose a particular hotel chain or airline may benefit from researching on the travel sites, especially in instances in which a preferred chain or carrier is not available for their destination.
To remain competitive with the direct booking rates, some third-party sites are developing their own rewards programs. Hotels.com, for example, offers members a free night for every 10 night they book through the site. Orbitz has a rewards program through which consumers can earn points toward discounts on hotels by booking through the site, eating at participating restaurants, or using the affiliated Visa card. Booking a combination package that includes hotel, airfare, and car rental is another way for consumers to find savings at third-party sites. But the consumer must be careful to understand the fees and cancellation policies involved in the booking.
Legislation to Regulate Third-Party Booking Sites
Members of the Florida Congressional delegation are working to pass a bill to fight online booking scams. Florida has some of the country’s most popular travel destinations and elected officials are concerned with scams—like fraudulent bookings—that harm tourists. In May 2017, U.S. Representatives Lois Frankel and Ileana Ros-Lehtinen of Florida and Senator Bill Nelson reintroduced legislation that did not gain passage in 2016. The “Stop Online Booking Scams Act,” would require full disclosure of policies for third-party hotel reservation websites. Violators could face fines of up to $11,000. According to the American Hotel & Lodging Association (AHLA), which is backing the bill, reports that millions Americans lost nearly $1.3 billion to third-party booking scams and misrepresentation of fees and policies.
Filing a Class Action Lawsuit over Hotel Reservation Websites
Parker Waichman LLP is a national law firm with decades of experience representing clients in numerous class action lawsuits. The firm offers free legal consultations to consumers who were denied a refund from these third-party booking websites.
If you or someone you know is interested in filing a class action lawsuit over third-party hotel reservation websites refusing to properly issue refunds, contact Parker Waichman today. Our experienced attorneys offer free, no-obligation case evaluations. For more information, fill out our online form or call 1-800-YOURLAWYER (1-800-968-7529).
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