New law would force sites to disclose they aren’t hotels — but is it enough?


The hotel industry is throwing its weight behind a bill that would require online travel agencies acting on behalf of hotels to say they don’t do a direct booking. It’s an issue that has bothered hotels for years. But does it go far enough?

The Stop Online Booking Scams Act, introduced today, would require all third-party hotel booking websites to disclose that they are not affiliated with the hotel for which the traveler is ultimately making the reservation. It also instructs the Federal Trade Commission to study the issue of third-party bookings.

The bill’s sponsor, Rep. Lois Frankel (D-Fla.), says that the new requirement will help consumers tell the difference between name-brand hotel websites and fraudulent ones masquerading as name-brand sites. Hotels are eager to draw a line between online travel agencies and themselves and, potentially, to win back some market share from these retailers, which charge hotels hefty distribution fees.

Question is, does this legislation go far enough? For hotel guests, the most important disclosure is price. The hotel industry is awash in mandatory “resort” fees, lodging taxes and other surcharges, and hotel websites frequently don’t reveal these extra charges until the final booking screen. For consumers, the problem isn’t just knowing that they’re booking via a third party, but knowing up front how much they’re going to pay for their room.

If the hotel industry really wants to help its customers, it would support a full disclosure — not just the partial disclosure for which this bill advocates.

Here are the details:


(1) IN GENERAL — It shall be unlawful for a third party online hotel reservation seller to charge or attempt to charge any consumer’s credit card, debit card, bank account, or other financial account for any good or service sold in a transaction effected on the Internet, unless the third party online hotel reservation seller clearly and conspicuously discloses to the consumer all material terms of the transaction, including—

(A) before the conclusion of the transaction —

(i) a description of the good or service being offered; and
(ii) the cost of such good or service;


(B) in a manner that is continuously visible to the consumer throughout the transaction process, the fact that the third party online hotel reservation seller is a third party seller and is not affiliated with the person who owns the hotel or provides the hotel services or accommodations.

The bill would update the Restore Online Shopper’s Confidence Act, which prohibits any post-transaction third-party seller from charging any financial account in an Internet transaction unless it has disclosed clearly all material terms of the transaction and obtained the consumer’s express informed consent to the charge.

Why is this legislation necessary? There’s the truth and then there’s the truth.

The truth, as far as the lodging industry is concerned, is that thousands of customers are misled every year into making hotel reservations through fraudulent websites that give the appearance of being affiliated with a hotel, but legally have no relationship to them at all.

The “fraud” takes several forms, according to the hotel industry. You could be charged additional hidden fees when you arrive, lose expected loyalty points, or worse, you could learn that your reservation was never actually made.

The truth is a little more complicated. In 2015, the hotel industry estimates that close to 15 million reservations were made on “deceptive” sites, which cost the industry $1.3 billion per year. Hotels want to remove these competitors, and they believe prominent warnings will do the trick.

The bill contains two other noteworthy provisions. First, there’s a provision to give state Attorneys General more power to pursue rogue hotel sites, giving state law enforcement the ability to go after perpetrators in federal court with the same remedies available to the FTC. (Today, only federal authorities can fully penalize individuals who commit online hotel booking fraud.)

Giving state Attorneys General the ability to pursue damages and restitution for victims will leverage the power of all 50 states to hold fraudsters of all levels accountable and deter criminals, according to the hotel industry.

The Stop Online Booking Scams Act also directs the FTC to produce a report on the impact of these fraudulent sites on consumers, and encourages the agency to simplify their online complaint procedure for reporting hotel booking scams.

It’s a good start. But unless the sponsors can add language that requires all hotels to disclose the full price of a hotel in a price quote, it will only benefit the hotel industry, not the guests who they claim to be protecting with this proposed law.

The Stop Online Booking Scams Act is …

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  • Bill___A

    Good idea Let’s also add that resort fees and any other mandatory surcharges and fees (other than government mandated taxes) are banned as well as any “fuel” or “energy” surcharges. There can be only the rate or fare, optional extras (that are not necessary – electricity or water or bed in a hotels’ case not being “optional extras” nor can a seat on a plane. Might as well fix several irritations at once that are all related!

  • Kairho

    How does this proposal differ from Florida’s existing Sellers of Travel law?

  • David___1

    Did anyone else notice the irony here? The acronym for the act is “SOBS”.

  • Grant Ritchie

    Ha… love it! You should be writing headlines for us, Larry. We could’ve had some fun with that one. :-)

  • Daddydo

    So, how will this bill affect legit tour companies like Apple, Pleasant, Gogo to name a few? Now the travel agent is booking online with these companies, another level of the online booking process. None of the above are scams, just day to day business. Now you are on a 21 day 14 hotel tour of Europe booked online through Globus, Trafalgar, etc. This bill does not nearly address enough of today’s potential problems. It is a start; a itsz bitsy start.

  • Joe_D_Messina

    Is it just me, or does it seem like the article is talking about two totally different things? It starts out talking about third party booking sites having to make this disclosure–that certainly sounds like a good idea and the legitimate third party sites would undoubtedly comply. But then in the very next paragraph there’s the quote about how it’s supposedly going to help people tell real websites from scam sites. Like the scam websites are going to follow this law? That quote is absurd.

  • KanExplore

    Informative discussion. While I’ve never fallen victim to a hotel booking site scam, it does seem like this addresses a legitimate problem. And yes, go further to ban those scam “resort” fees, unless the consumer can opt out of them.

  • Blamona

    From a hotel perspective, the reason for mandatory fees outside of booking companies (for example, Expedia) is Expedia gets a percentage of entire amount including extra fees if resorts have them. So resorts separate it from booking companies so they don’t get a percentage of everything! (Another ex, Airbnb gets a percentage from booking including the tax!). Personally, booking companies should disclose that that’s all they are. They don’t own the property, hold your money, and create an extra middleman if problem arises. I think if this happened resorts could lower rates more. Booking companies have nothing to loose and charge a lot for what amounts to advertising and hold monies. I don’t blame resorts to feel that way.

  • Extramail

    Parking fees need to be added to the list of fees that you get surprised with at check out. Just left the Marriott marquis in Atlanta and spent an extra $35 a night to park there when all I did was drive to the convention so I didn’t have to hassle with flying. Not once did I have to waste anyone’s time getting my car out, just parked it when I got there and picked it up when I left. I couldn’t understand the guy where to self park and I’m sure there would have been an outrageous charge for that. You can’t win whether you drive or fly to do business!

  • Carchar

    You were thinking of Larry David. :D

  • John McDonald

    yet another ill thought out idea. Many travel agents(real ones, not computers) make bookings through middlemen. It’s often cheaper for the client that way. So this stupid acts will insist that real travel agents go direct to the hotel ?
    A middleman(wholesaler) might book 1000’s of night at a certain hotel per year & get better net prices than an agent just wanting a few nights. An agent would then have to negotiate individually with that hotel, instead of going through a wholesaler. It’s how much of the world works, why is travel any different ?
    In some instances you can cut out the middleman, but it may make things Talking from McDonalds & up. Who want to buy something at McDonalds for 99 cents & then be told it $1.12 with taxes. What a joke.
    Get with the programme USA. You’re living in the 19th century & when are you going metric like the rest of the world ?

  • cscasi

    I don’t know because I know nothing about the Florida’s existing “Sellers of Travel” law. Can you explain it to us who know nothing about it?

  • Kairho

    I’m about to get on a plane to Chile so will simply refer you to a good recap at:

    In there it explains that the law covers disclosure (quote follows):

    “Is any public notice and disclosure required by this law?

    “Registered sellers of travel must include the following phrase in their contracts:

    “‘…(NAME OF FIRM)… is registered with the State of Florida as a Seller of Travel Registration NO. .’

    “Each advertisement of a Seller of Travel MUST include the phrase:

    “‘Fla. Seller of Travel Reg. No. .’

    “In addition, all registered sellers of travel shall prominently display in the seller of travel’s place of business, including branch offices, the certificate issued by the Florida Department of Agriculture and Consumer Services.”

  • Éamon deValera

    I really don’t see a need for this law. It matters not at all to me if I book with a hotel, or some guy in an alley with a laptop as long as I get what is advertised and I pay the advertised price.

    I note that Rep. Frankel has received more than $70,000 in contributions from persons employed by or related to hotel owners including Blackstone Group.

    Is this needed or is it a quid pro quo?