How Online Travel Agencies Influence Your Hotel Bookings

Photo by everydayplus / Shutterstock.com

At first, to Christine Compo-Martin, the Expedia.com search results looked like a mistake. As she queried the site for a hotel room in Philadelphia, she found properties without photos.

“Honestly, if there aren’t pictures, I don’t even begin to consider it,” said Compo-Martin, a retired teacher who lives in New Hope, Pennsylvania. “I want to know where I’m staying — not show up and discover it’s not fit for cockroaches.”

As it turns out, it wasn’t a site error. Expedia had intentionally deleted the images in an effort to persuade her to book a different hotel. The practice, euphemistically called “dimming,” involves deliberately minimizing a hotel’s appearance or ranking in an online agency’s results.

It’s the byproduct of a behind-the-scenes conflict between hotels, which want customers such as Compo-Martin to book directly with them, and online travel agencies, which don’t want to be undercut by the hotels. The bottom line for customers: When you book online, you may not see the cheapest hotels first. In extreme cases, you may not even be able to book the hotel you want on the agency’s site.

The dimming problem flickered to life this spring, after hotels won a series of court victories in Europe that effectively allowed them to offer lower rates on their own websites, according to Dori Stein, the chief executive of Fornova, a technology company that works with hotels. Previously, hotels had contracts with online agencies that gave the agencies’ sites their best rates.

“Online travel agencies retaliated by dimming,” Stein said.

Where it all started

The practice quickly spread to affect properties in the United States, where the requirement to offer a better rate was dropped after the court rulings in Europe. Expedia, Stein said, is the most prominent dimmer in the travel business, while Booking.com has lowered the rankings of some hotels but hasn’t removed their pictures. Booking did not respond to repeated requests for a comment. Expedia acknowledged that it is lowering the rankings of some hotels but said it was for the benefit of the customer.

“We want to make sure the hotels with the best rates and inventory are put first,” said Melissa Maher, a senior vice president at Expedia. “We’re doing it because we’re consumer-focused.”

Maher said dimming is not as straightforward as it sounds. Expedia’s search algorithm weighs several factors, including the room rate; customer ratings; how often the hotel turns away reservation-holding guests and sends them to another hotel; and the commission paid to the agency.

She wouldn’t say precisely how many hotels are being dimmed, describing it only as a “small percentage” of properties. But, she added, if a hotel finds that its photos have been stripped away or that it has moved lower in the search results, Expedia tries to work with the company to fix things.

“We want to give the hotel the opportunity to change,” she said.

Why customers are skeptical

That’s not necessarily how customers such as Compo-Martin see it. Dimmed hotels make an online travel agency’s search results look incomplete at best, buggy at worst. To her, they run contrary to the implied promise of an online agency, which is to show a comprehensive list of the most desirable hotels.

“I use sites like Expedia because I want all of the information up front at once,” she said. “I’m sure I’m not the only one who looks at that and thinks, ‘What are they hiding?’ ”

It’s hard to know. As a practical matter, the top results on your favorite travel site may have longer descriptions with additional photos, but the properties shown may be more expensive. Lower-ranked hotels might be less expensive, but they might not have photos and their descriptions may be edited to a few sentences. In rare instances, dimmed hotels may not be bookable through the site.

No one except the travel agency doing the dimming knows why a hotel is chosen for the treatment. “From one day to the next, a hotel chain can go from 150 dimmed hotels to 80,” said Gino Engels, chief commercial officer for OTA Insight, a London hospitality technology company. “One hotel chain may drop in the rankings, another may rise.”

As of July 21, OTA Insight said that slightly more than 1 percent of Expedia’s 260,000 hotel properties were dimmed.

The dimming problem gained momentum this summer just as the travel season was getting started. It’s a predictable ritual, with the dimmed hotel receiving a form email from Expedia on the day it falls out of favor with the online agency, warning the hotel that it isn’t offering its best rates through Expedia, Engels said.

The politics behind dimming

“They’re trying to hurt the hotel, but they don’t want to hurt it too much. If they do that, it will start to affect Expedia’s bookings. It’s just a bit of a political game,” he said.

Others said that tinkering with search results is wrong and betrays a trust consumers have placed in online agencies.

“Dimming is unethical,” said David Rosner, the co-chief executive of SmarTours, a New York tour operator. That’s because the online agency is trying to trick its own customer into buying a more expensive hotel room. “This practice is similar to deceptive advertising in the sense that only those who read the fine print truly understand what they are buying.”

Dimming also exploits a public perception that the search results on online agencies are as unbiased as an internet search engine. While many travelers believe an online agency will display the cheapest rates first in a relatively impartial way, the hard reality is that almost every part of the fare display is optimized for profit.

“These sites generate revenue through hotel partnerships, commissionable rates and advertisements, all of which can affect search results for travelers,” said Jason Shames, the chief executive of Skipper, an online agency that specializes in group travel. It’s an open secret that online agencies trade higher search placement to hotels willing to pay higher commissions.

Now more than ever, you have to do your due diligence when you’re searching for the best hotels, industry-watchers say. They recommend starting with a site that searches multiple online agencies, such as Kayak.com or the hotel search on Google.com. (In Google’s search box, type “hotels in [city].”) Check an online agency such as Expedia or Booking to see if it can do better, and, if you find a hotel you like, click on the property’s website to make sure there isn’t a better rate.

For many travelers, that’s a lot of work — maybe too much work. Which is why, for now, dimming may succeed. Consider what happened to Compo-Martin. She ignored the hotels without photos and booked a different property in Philadelphia, the Rittenhouse, on Expedia. “I found a great deal,” she said.

Christopher Elliott’s latest book is “How to Be the World’s Smartest Traveler” (National Geographic). You can get real-time answers to any consumer question on his forum, elliott.org/forum, or by emailing him at [email protected].

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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