Recently, the San Francisco city attorney filed a lawsuit against hotel aggregators BookOnline.com, GuestReservations.com, and online travel site Booking Holdings. This hotel aggregator lawsuit alleges deceptive business practices, accusing the three of scamming would-be travelers into thinking they are booking directly with hotels, and then subsequently overcharging room rates.
For hospitality marketers, and Central Coast hotels specifically, this is a story to keep an eye on.
The Background
San Fran city attorney David Chiu filed the lawsuit against these hotel aggregators on July 29th, saying that tourists were being “cleaned out” by the alleged scam. The suit alleges that consumers booked with the sites, only to later realize they did not book directly with that hotel. When customers then tried to cancel their reservation, the sites refuse to refund their money.
“These companies mislead consumers into thinking they’re booking directly with a hotel, charge exorbitant rates, and impose inflexible cancellation policies. With inflation straining household budgets, these excessive markups only add to the burden. These scams hurt travelers as well as our local hotels, workers and businesses. We are asking the Court to shut these scams down and help us get people their money back.”
The Alleged scam
The alleged deception impacted some San Francisco hotels who received complaints from customers who booked rooms through one of the named defendants. As these sites were reportedly mimicking the desired hotels’ actual online booking portal, customers allegedly believed they were booking through the hotels themselves. Reservations on the sites often require consumers to pay upfront in full, are nonrefundable, and cost up to 85% more compared to when booking direct, according to the city’s lawsuit.
The city also claims the sites may list local phone numbers for the areas the hotel is located in—and when called, the agent on the phone does not disclose they work for a third-party platform.
Worth noting: the current OTA lawsuit applies to the city of San Francisco only. No state-wide or national charges have been filed at this time. BookOnline.com has received over 1,800 complaints nationally, earning itself an “F” rating with the Better Business Bureau.
Impact on central coast hotels
In preparation for this blog post, Screechy Cat Media conducted searches on branded keywords for numerous hotels in the Santa Ynez Valley & Five Cities areas. Nearly all of these searches yielded paid advertising results for Central Coast hotels, many of which were at the top of sponsored listings.
To be clear, bidding on branded keywords is perfectly fine. It is allowed by Google, and a recommended tactic for businesses in highly-competitive verticals. The specific issue alleged by the city of San Francisco is one of deception and overcharging—not a keyword or bidding concern. Customers were being led to believe they were booking directly with the hotel, were not being charged the rate defined by the hotel, and were refusing refunds despite stated refund policies. All of these can easily lead to negative customer experiences, poor reviews, and a damaged reputation for your brand.
How your marketing plan can counter
Bidding on your own branded keywords in your paid search campaign is a start: brands usually need to bid much less on their own keywords than third-parties thanks to higher Quality Scores. Think of this as brand protection—you can’t stop OTAs from bidding, but you can do something about them outbidding you.
SEO and AIO help to ensure high rankings on organic search; although in most cases, your property already has the #1 organic spot. Google tends to show a good amount of sponsored listings for travel-related search queries, so your organic listing may not even be above the fold, but it is still important real estate to own.
Running retargeting campaigns for previous site visitors who do not complete a booking can help to ensure potential customers return to your site for their reservation instead of an aggregator. Building brand awareness can also help to guide potential travelers to your own site vs. an OTA, which is best accomplished through tactics like ConnectedTV, paid social, and programmatic display.
Give us 30 minutes, and we can show you how to best leverage your brand identity to earn more direct bookings through your website. Schedule your consultation here.
