Do Online Travel websites save money or rip you off?
According to an article in the Asheville Citizen-Times in January 2018, bookings for short-term rentals in Tennessee are growing at a faster rate than for hotels. HomeAway and VRBO are among the online travel agencies offering short-term rentals, but Airbnb is by far the largest.
Short-term rentals, which you can occupy for days, weeks, or months, have several advantages over traditional hotels and motels. Having your own private kitchen comes in handy for late night snacks, enjoying meals on your own timetable, or trying your hand at replicating the local cuisine. Many units are kid- and pet-friendly.
Rentals typically come with cooking basics (pots and pans, coffee maker, microwave, refrigerator, oven, and stove. They have central heating and air conditioning, wireless internet access, cable/satellite television, laundry facilities and access to a swimming pool. All have safety features including fire extinguisher, smoke detector, and carbon monoxide detector.
You can often find a cabin equipped with a hot tub, barbecue, or fireplace. Booking is easy. You search online for the dates and amenities you want and contact the owner of the property. Alternatively, some people are turning to online travel agencies, or OTAs.
What is an Online Travel Agency?
An online travel agency is a website where you can book flights, accommodation, car rental, and even attractions. Enter your preferences, click ‘Search,’ and the site combs through the internet to deliver a range of options and prices. You choose the flight or hotel, or attraction you want at the best cost One of the main benefits of using an OTA is that, by bundling your flights, rooms, etc., you are supposed to be able to shave dollars off the total package. But do you?
The Truth About OTAs
National websites charge fees to the guest and the rental company for each reservation. This fee can be anywhere from 8 percent to more than 25 percent and adds no value to either the guest or the rental company. Travelers may end up paying about $200.00 MORE than what it would cost for them to go book direct through the individual hotel or vacation rental company and bypass these "popular" online travel websites.
The Better Business Bureau, TrustPilot, Pissed Consumer, and Consumer Affairs are all teeming with complaints from consumers who booked travel products on OTAs and lived to tell a sorry tale of rip-offs, unresolved host/guest disputes, filthy properties, and all-round poor service. We delved into the customer reviews for an assortment of OTAs on TrustPilot.com, a Danish website that publishes customer reviews for online websites.
An astounding number of customer reviews about OTAs are negative
Company X offers an Aladdin’s Cave of horror stories. Out of more than 3,000 published reviews, 80 percent were either ‘Bad’ or ‘Poor.’ Of these, around a quarter were attributable to cost issues. Between 10 and 13 percent of bad reviews were because of disputes between the guest and the host of the property. A similar percentage were attributable to the condition of the property. By far the biggest number of complaints, 50 percent, were because of lousy customer service on the part of the OTA. The company has earned itself a ‘Trust Score’ of a glowing 1.5; the maximum is 10. We’ve included a selection of horror stories.
In the same way that the odds in a casino favour the house, the financial benefits of booking travel with an OTA skew in favour of the company, not the customer. In fact, if you search Google for, “do online travel agencies save the customer money,” most of the replies will relate to how the agencies make money (Figure 1). What these articles don’t tell you is how online travel agencies make money by gouging the customer.
Most customer complaints were about costs being too high. In addition to the advertised cost per night, many agencies will add a cleaning fee, service fee, and occupancy taxes and ‘fees’. At the root of other bad/poor reviews were hidden charges or refunds that never materialized.
Complaints about money
- Until June 2018, Jane and her husband had used Company X for years without incident. They had always been happy with the accommodation and the hosts. On this occasion, the host tried to hike up the price to double what she had quoted. It was right before Christmas when it would have been next to impossible to find another place to stay, so the couple had no choice but to pay the inflated price. When Jane contacted the OTA to report the incident, the company was flippantly uninterested in following it up.
- Within four minutes of booking a room in Los Angeles, Madge learned about a family emergency that meant she had to cancel the reservation. Immediately, she contacted customer service, who told her that they would file a claim. Eventually, after repeated follow-up telephone calls from Madge, the company told her that she did not qualify for a refund.
- Amelia wanted to book accommodation in Tunisia, where she had visited in the past. These experiences led her to expect to pay around $262.00 to rent a flat for a month. Not only did the OTA try to charge her three times that amount, but they also wanted to levy a $26 cleaning charge. The same service would cost $4 to book directly with a local cleaner. The OTA makes a killing, the customer gets ripped off and the local businesses lose out as well.
- Companies have ingenious ways of extracting money from customers, but Ned was surprised when the co-founder of this organization solicited a political donation from him because they did not agree with a decision by the Supreme Court.
Around 12.5 percent of bad or poor reviews originate from problems between the guest and the host, i.e., the manager or owner of the property. In many cases, the OTA acts as a barrier to communication between the host and the guest. At the heart of these complaints were incommunicado hosts, renting properties that they did not own, or cancelling a booking at the last minute.
Disputes between guests and rental companies are not all one-sided; hosts aired their fair share of grievances about guests, too. These were largely because the guests trashed the properties and the OTA had no insurance or other means of indemnification.
Negative reviews from host/guest
- This tale finishes in the “poor customer service by the OTA” category, but it starts out as a host/guest dispute, so it’s documented here. Suzy L and her partner arrived in Athens only to learn that the property owner had cancelled all bookings the day before. Four hours of telephone calls later, Company X informed her that she was entitled to a refund of seven euros. Stranded in a strange city with nowhere to go, Suzy and her friend ended up sleeping in the airport after they were flashed while wandering the streets of Athens seeking refuge on what should have been an exciting European holiday.
- If you’re planning to book a short-term rental using an OTA, you would do well to take heed of Casey’s lament that he wished he had stumbled across Company X’s reviews before booking his trip to France to “get away from the hotel scene.” He finally received a full refund for cancelling the booking, but not before weeks of unpleasant exchanges and dragging his credit card company into the fray. The reason Casey cancelled? The host was rude and unaccommodating about a slight change Casey asked for. Experts recommend checking out at least 50 reviews for rentals in a popular vacation spot and a minimum of 25 for a more remote location.
- Guests are by no means the only party to complain in a guest/host dispute. In July 2018, AL rented out her home to a party for seven days. The guests ran a meth lab the whole time and didn’t even sleep there, choosing instead to book accommodation nearby. The host put in a claim for a $500 Bond, the OTA staff were rude when they were finally able to contact him. Advised by the OTA to “take it up with the guest,” the host was hundreds of dollars out of pocket and thoroughly p****ed off with the company.
Condition of the property
Another 12.5 percent of bad reviews related to the condition of the property. From the guest’s point of view, properties were either filthy (with or without vermin) or not as described on the website.
Reviews about property condition
- Tim experienced “smelly beds and awful service.” Company X rejected his claim for a reduction in rent.
- You can forgive a rental company that exaggerates its property descriptions slightly, but it’s a completely different kettle of fish to book in only to discover that you will be sharing your unit with other guests! This is extreme. The hosts had put mattresses on the floor to extract more money from unsuspecting tourists and had paired up mixed couples who didn’t even know each other in the same room. Company X was no help at all. You can’t rate the service; there wasn’t any.
As for the state of the place, “When I arrived, the room was disgusting (I found a nail in one of the drawers of the bedside table, the desk was so dirty it was sticky, the wardrobe was so dirty I had to clean it for several days before I could unpack, the floor was full of stains...). The rest of the apartment was in a poor condition, the bathroom was disgusting as well, and the way to the balcony was dangerous (you have to go through a small window, the stairs are broken so you have to put your foot on a plastic stool on which lays a wooden board with nails on it). Also, I didn't know they would be other guests in a shared room, …”
Poor customer service by the OTA
By far the most common reason for a bad customer review is poor service on the part of the OTA. A good half of reviewers cited this as the reason for their dissatisfaction. Some of the complaints can be very serious. One party’s booking coincided fires at Yosemite. Despite being unable to guarantee safe accommodation, the host retained the booking fee, and Company X did not provide a response. Its policy is to provide a refund if a booking is cancelled due to fires.
Consider yourself warned that unlike a hotel that programs a separate key for each customer, anyone can have a key to your short-term rental. This could mean the host, cleaning and maintenance staff, or prior guests. Theresa found this to her cost when she left her laptop behind at a place she had rented in LA. When she contacted the host the next day, he assured her he had searched ‘high and low’ but the laptop wasn’t there.
Reviews about poor customer service by the OTA
- The following review is not for those of a nervous disposition. LFW described her party’s “Memorable Stay in Cottage,” as a, “horror movie waiting to happen.” Not only were the keys missing from the lock box on arrival, but:
- The interior of the property smelled like propane.
- Outside were hot electrical wires in a designated “no burn zone.”
- There was little or no drinking water; there was a note warning LFW and her party warning them not to “use much water.”
- An axe stood near the front door.
- There were signs of ritualistic worship in the woods behind the house.
- Every one of the adults in the party reported a feeling that someone was watching them.
Having gained no sympathy or anything she could describe as “customer service” from the OTA, LFW and her party practically “ran to the car to leave this place.”
- Tim from AZ is counting his blessings he doesn’t live near the corporate office of this OTA or he would not be held responsible for his actions. All he wanted was to take his 18-year-old daughter to Maui for her birthday. Four days before their departure, Tim received an email telling him that not only had they closed his account, but they had cancelled the excursions as well.
Ours is not the only such report to document nightmares with online travel agencies. AsherFergusson.com conducted a 2016 analysis of 839 reports based on third party websites and reported the most likely causes of problems. More than half of reviewers, 57 percent, had a problem with customer service. These broke down as follows:
- 0% - Miscellaneous complaints
- 5% - Host cancels stay
- 4% - Scams
- 4% - Unsafe conditions
- 2% - Property not as described
- 8% - Fake listing/reviews
- 1% - Discrimination
Among the 36 percent of miscellaneous customer service problems are no support in emergencies; the host is unreachable or rude; customers are unfairly denied refunds or offered only partial refunds; policies unfairly favour the host; the OTA deactivates the guest’s account; the team is disorganized and/or chaotic, often providing incorrect answers to questions or hangs up on the customer; or the company promises but does not deliver.
Summary and conclusion
The point of this exercise was not to put you off staying in short-term rentals in East Tennessee. They are growing rapidly in popularity and have all the advantages described above. Hopefully, you’ll have learned that booking, and communicating, directly with the rental company instead of an OTA is by far the better choice. You’ll save money, be safer, and have a more enjoyable stay.