Avoid the Online Booking Scam That Has Already Cost Consumers $3.9 Billion

The facade of the luxury hotel Le Plaza Athenee. Patrick Kovarik/AFP/Getty Images

The American Hotel and Lodging Association is warning consumers about the mass explosion of hotel booking scams that are costing the hotel industry billions of dollars and duping millions of travelers. All are basically a take on the old bait and switch. Here’s the how it usually plays out:

You book your hotel reservation online, using Google or any appropriate search engine.

You click on a link that looks legitimate and you’re taken to what appears to be the hotel’s website—the hotel’s logo, the copyrighted images, and a URL that includes the hotel’s name.

Seems O.K.—so you either call the 1-800 number or book from what you think is the hotel’s website. These scammers are brilliant—they can make hotel websites look exactly like the real ones. But sadly, when you get to the hotel, there’s no reservation.

The biggest issue in this, of course, is that because the consumer has been charged in advance, it’s nearly impossible to reclaim the lost money. But this flat-out deception can result in a number of other issues. A weary traveler might end up without a place to stay for the night if the hotel is booked out, or having paid for their room twice, still left without certain requirements like handicap access, the right number of beds, or a dog-friendly room. AHLA estimates these scams are costing consumers roughly $3.9 billion per year.

So how can travelers protect themselves? Observer spoke to Arik Kislin, co-owner of the Gansevoort Hotel Group, a luxury hotel chain with hotels in Manhattan and the Dominican Republic, how people can protect themselves for these scams.

The immediate consequences are obvious, but what are some other issues that might arise due to these scams?
When you book a room that turns out to be a scam, you’re exposing your information to fraudsters online. Once you’ve booked through a fraudulent site, your credit card and other private information has been shared, which is the biggest problem of all.

Are there red flags to look for?
If a price is too good to be true, I’d be suspicious. Most prices for hotels on booking sites are comparable, if an unknown site has a significantly cheaper price it’s definitely a red flag. Make sure you do your research before booking it.

How many people have been affected and how many are predicted to be scammed this way?
According to the American Hotel & Lodging Association, “55 Million online hotel booking scams occur every year.”

Are there other scams travelers should watch out for?
Besides for booking scams, a lot of countries have tourist traps you always need to look out for. In various countries many locals will tell tourist that high trafficked destinations are closed that day. They will convince you to hire them as a guide to take you to other destinations. Make sure you do research before visiting your destination so you don’t fall into one of these traps.

How can travelers protect themselves?
I always recommend booking your hotel through a trusted site like Kayak or Orbitz. Consistently using these sites allows you to build up points that you can use towards future flights. If you’re a member of a hotel group by holding a credit card like the Marriot AMEX, Hilton Citi (soon to be AMEX), etc., book through their hotel rewards sites so you can get points and eventually build up to a free room. Also, always book with a credit card. Most credit cards come with protection against cyber thieves, so if you’re booking does end up being a scam, you can always cancel the charge.

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