Hotels and online travel sites clash over booking scams

A battle is heating up between online travel sites and U.S. hotels over the best way to book your hotel room.

Like most things in business, the feud comes down to money.

The American Hotel and Lodging Assn., the trade group for hotels in the U.S., is pushing for legislation to crack down on fraudulent online booking sites that trick travelers into paying for hotel rooms but have no relation to the hotels. The group says the scams cost travelers up to $1.3 billion a year.

A coalition of online travel sites isn't buying it. The sites say the hotel industry is exaggerating the online scam problem to push travelers to book directly on hotel sites so that hotels can avoid paying sales commissions to the online booking sites.

“It's just a veiled attempt at trying to scare consumers to book directly with the hotel chains themselves,” said Philip Minardi, a spokesman for the coalition of online sites, including Expedia, Priceline and Airbnb.

The stakes are high in this feud. Travelers make an estimated 480 online hotel bookings per minute in the U.S. Hotels pay third-party booking sites commissions of up to 25% of the room price. Hotels also want travelers to book directly from them so they can pitch future deals and packages and develop guest loyalty.

Hotel industry officials reject suggestions that they are using the scams to scare travelers away from outside booking sites.

“The fact is online scams are hurting consumers and jeopardizing their confidence in the online booking process, while also harming the reputation of hotels,” said Katherine Lugar, president and chief executive of the hotel trade group.

To read more about travel, tourism and the airline industry, follow me on Twitter at @hugomartin.

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