SOBS Act Back Again
Steve Shur on May 18, 2017
The Stop Online Booking Scams (SOBS) Act, a fabrication of the hotel lobby, is a public relations stunt meant to smear third party booking websites and scare consumers into thinking that booking anywhere other than directly on the hotel’s own website is risky. It’s just not true. The AH&LA is doing the bidding of the large hotel chains, who clearly would prefer that consumers just book direct. The reality is that the majority of leisure travelers, and many business travelers, are brand agnostic. They want to be able to shop across brands and choose the accommodation best suited to their priorities and preferences.
Online travel agencies facilitate the booking of nearly one billion room nights each year globally. Consumers continue to use these platforms because they appreciate the ability to shop across brands, find options they would not have found otherwise, and maximize the bang for their buck—all in an easy, convenient booking environment that reduces time and hassle.
The hotel lobby’s claims about the number of consumers being defrauded by online travel sites are completely unsubstantiated, and frankly, laughable. If consumer deception was happening at the rate they claim, it would rank at the top of all consumer deception in the U.S. And yet the only time you hear of it is from the hotel lobby. The veil is thin. There is no record of consumer compliant at the FTC or with consumer groups on this issue because it simply isn’t happening at any significant rate.
According to consumer complaint data released by the FTC in March 2017, the FTC received 3,050,374 complaints in 2016. “Travel”-related complaints ranked 17th among complaint categories with the overwhelming majority of those complaints related to Timeshare Sales, Timeshare Resales and Student Vacation Packages. The AH&LA claims that 15 million consumers were subjected to fraud by third party booking sites. Third party booking of hotel rooms is not even mentioned in the FTC’s report. The hotel industry’s claims are completely unfounded.
The bill itself is framed as a disclosure bill – requiring sites not “affiliated with” the hotel to prominently disclose that they are “not affiliated with the hotel”. Hotels contract with online travel agencies to market rooms to travelers. Legally, these agreements mean that third party booking sites are in fact “affiliated with” the hotels.
The SOBS Act is unnecessary. It would do-nothing for consumers, and have no impact on true fraudulent actors. But that’s not its purpose. The American Hotel & Lodging Association has made it clear that the focus of their agenda is to use government to stifle the competition, in this case, their own distribution partners, with whom they choose to do business.
At Travel Tech, we believe that consumers should have access to all the information they need to make informed travel choices. The SOBS Act provides no valuable information to consumers, but instead misleads the traveling public about their options and security online. Congress should stay out of what amounts to a marketing battle, and focus on legislation that improves competition and true transparency for consumers. The FTC and Congress certainly have a vested interest in consumer protection. In this case, consumers only need protection from the AH&LA’s scare tactics and misinformation campaigns.