Are online travel sites providing biased information?

A cyber war has erupted in recent weeks between major online travel agencies such as Expedia (EXPE) and Priceline.com (PCLN) and hotel chains over how some discounts are being offered to consumers.

Earlier this year, Marriott (MAR), Wyndham (WYN) and Hilton Worldwide (HLT) stepped up their efforts to lure consumers away from the online travel agencies, or OTAs, by directly offering discounts on room bookings. The discounts leave the OTAs out of the picture — and out any fees or commissions on the bookings.

Expedia and Priceline, the two largest OTAs, are fighting back against these direct-to-consumer offers by making the hotels harder to find on their sites, according to industry experts.

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Bellevue, Washington-based Expedia strips out descriptive details of some hotels — such as pictures — and buries listings deeper in its search results, an e-commerce practice known as “dimming,” according to lodging sources. Priceline’s Booking.com site has lowered the rankings of some hotels even though it keeps the pictures online, according to OTA Insight, a travel technology company.

The stakes are high for hotel companies, which can lose bookings when the travel sites alter their search results. According to the industry data firm STR, hotel chains in the U.S. collected $142.6 billion in room revenue last year, compared with $132.8 billion in 2014.

It’s believed the OTAs collect more than $1 billion in revenue annually on the hotels’ behalf — money that doesn’t make it into hotel coffers when guests pay for their stays in advance. When a consumer pays after his or her stay is complete, the hotels return some of the money collected back to the travel agencies.

Consumers, for their part, are caught in the middle of a fight many have no idea even exists.

“It’s a shame because the consumer uses these [OTA] platforms because they trust the brand to give them a wide variety of choices to choose from and because of the dimming that’s taken away,” said Gino Engles, co-founder of OTA Insight.

Around 3,500 of the 260,000 hotels currently displayed on Expedia are “dimmed,” an increase of more than 30 percent compared with two weeks ago, OTA Insight estimates. About 40 percent of the “dimmed” hotels belong to the top 5 global chains, the site says.

The American Hotel & Lodging Association, an industry trade group, has cried foul, arguing the OTAs are misleading consumers, and it has asked the Federal Trade Commission to look into their practices, according to Katie Longo, a spokeswoman for the trade group. An FTC spokesperson didn’t respond to a request for comment.

“Biased or misleading search results from these sites or via web searches can be highly problematic, particularly on those booking websites that purport to be ‘helping’ consumers comparison-shop based off of less than objective information,” Longo writes in an email.

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A spokeswoman for Expedia declined to comment for this story. The company told the Washington Post in a recent article that a “small percentage” of properties are dimmed, without providing specific numbers, and it tries to “fix” dimmed listings when they are brought to its attention.

Expedia this year introduced its Accelerator program in which hotels can pay for better placement on its site. According to Expedia, the service has proven to be popular, especially with operators of independent hotels which can gain an edge against the chains.

“We’re seeing great uptake — we have got thousands of hotels that are actively using the tool, and we expect that it’s going to go up significantly from there,” Mark Okerstorm, Expedia’s chief financial officer, said during the company’s recent earnings conference call. “There’s still a lot of training to do and a lot of behavior for hoteliers to learn.”

The issue on Booking.com isn’t as clear cut, according to Engels, who noted that hotel chains have complained about seeing listings for some of their properties pushed lower on the site’s listings. A spokeswoman for Priceline.com referred questions about the issue to her counterpart at Booking.com, who didn’t respond to a voice mail and email messages. Wyndham, Marriott and Hilton also didn’t respond to requests for comment.

When hotel chains began their “book direct” campaigns earlier this year to encourage consumers to bypass the OTAs, hundreds of properties were dimmed, according to Cindy Estis Green, who owns Kalibri Labs, a data analytics company that works with lodging companies. “They claim that if you partner well with Expedia that you will get a higher listing and better merchandising,” she said.

source: http://www.cbsnews.com/news/are-expedia-priceline-online-travel-sites-providing-biased-hotel-travel-information/

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