Online Travel Scams

As booking travel through online travel agents becomes more common, there will always be unscrupulous ones, and flat out online travel scams. It’s well known that private villa accommodation is a target for online scams but as I recently discovered, online travel agents can be just as bad.

Generally I book my flights direct with an airline so there’s no travel agent amendment or cancellation fees, however travel is competitive and price is often a determining factor for many travellers, especially when you can find a flight for $300 cheaper than an airline, which is why online travel agents still exist.

In the process of searching for cheap airfares (including availability) for reader’s I was flabbergasted at how the booking process of travel, is like the Tijuana of the internet.

You never know where a click will take you, what you’ll end up with, or who you’re actually buying from. This despite big names like Expedia, Kayak and so called ‘disruptor’ apps (I effing hate buzz words), like Hopper or Next vacay, claiming to have changed the face of travel, yet they’ve actually done little to improve the overall booking process, apart from adding an additional link in the chain.

Whilst flight search engines have made it easier to find airfares from multiple airlines, but if anyone has ever compared any search results in Duck Duck Go then looked up the same thing in Google, you’ll know that no two searches offer the same results.

As an airline ticket issuer, I saw the seedy underbelly of travel (which you can listen to in this podcast episode), but it involved money laundering, loan sharks, drug dealers, bribery and trafficking to start) but I was equally appalled to see that despite huge advancements in technology, little has changed in booking travel as seedy scrupulous travel agents can still push their travel scams, just now online.

In my research for this, I clicked through the entire booking process, including reading the full terms and conditions for dozens of online travel agents (including flight search websites) and here’s what I found:

Big names have multiple sites
Many big name travel brands, own Online Travel Agent (OTA) websites, often hidden behind other business names. e.g. Fly with Betty and BYOJet are both divisions of Flight Centre Group. Ironically, the travel insurance pushed by these websites, was double the cost, offered by flight centre on their own website.

.COM.AU Doesn’t Mean It’s Australian
Websites that have a .com.au domain isn’t a guarantee that you’re booking with an Australian company. Take edreams.com.au which is owned by a Spanish company and therefore falls under Spanish law. The Australian division is one guy, who set up a business name as an affiliate, in order to obtain an ABN so they could get the .com.au domain registration. I had to dig deep to find that information.

Many OTA’s are Based Overseas
I found many OTA’s were based overseas (which isn’t so unusual in the internet age) but this leads to complications for consumers. The search engine displayed prices in Australian dollars, but when you actually paid for the flight, you were charged in US dollars or in one case, Qatari Rials, this could affect the amount you were charged by your bank and some banks also charge a foreign currency conversion fee.

If you have any complaints or an overseas website fails to deliver, there is little recourse of action in Australia (or your home country). Which is why IATA Registration (International Air Transport Association) is an important reference tool of authenticity if using travel sites.

Small Independent Travel Agents Also Own OTA’s
Half a dozen OTA’s I looked into, with fancy names like FortuneWorld, BargainFlights and Fly.Net.AU are actually run by small independent travel agencies in Sydney. In theory this should make them more trustworthy, however some were not registered with AFTA (Australian Federation of Travel Agents) nor IATA (International Air Transport Association), despite showing the logos of these on their website. Whilst neither is compulsory, it’s a sign of trustworthiness.

Refunds? No way.
Many of these OTA’s (especially ones owned by small independent travel agencies) stated in their terms and conditions, a general policy of’no refunds for any unused travel’ or ‘no refunds even on refundable tickets’. They had varying degrees of cancellation and amendment fees above and beyond what the airline charged ranging anywhere form $60 up to $600 and some of these fees were charged in foreign currencies if the OTA was based overseas. The worst offender stated ‘minimum cancellation fees’, and that credit card fee’s applied, but did not state what they were.

Fees and add-ons
We’ve all seen statements like – ‘do you want this? Are you sure? 98% of traveller’s purchased this‘ on sites like booking.com. In Australia there’s consumer laws regarding deceitful conduct such as ‘a website can’t automatically tick YES for insurance (or any product), when making online purchases, the customer must choose. Jetstar got into big trouble for this and was fined. However I found many instances of OTA’s doing dodgy stuff with fees. In one instance, if you accidentally ticked yes for an optional extra, you could not remove it unless you started the entire booking process over again. In many instances the ‘book’ button was green, but this also automatically charged you an additional fee (often hundreds more) for a so called ‘flexible ticket’, even though airlines will still charge you to change your ticket. You’ll notice below the price is designed to be deceiving as well. At a glance you see just the 82.01 which appears cheaper, vs the 92.99.

However if you click on the green ‘book’ button, you’re paying $489.02 more than you need to!

Then came the fees. One sample flight from Sydney to Los Angeles started at $940 and became $1870 once all the fee’s were added on. These weren’t airline fees, these were travel agent fees including:

• Service fee
• Baggage fee (even though the airfare included baggage)
• Delay compensation fee
• Trip cancellation fee
• Trip protection fee
• Trip Insurance (so somehow the other’s weren’t classed as travel insurance, even though travel insurance cover’s most of these fees).
• Flight delay fee
• Lost luggage fee
• Flexible ticket fee (even though the airline will charge you a date change fee and in some cases the ticket was non-changeable)
• Meal request (even though airlines do not charge for meal requests)
• Seat select fee (which one OTA charged $209 for!
• Customer service fee
• Priority customer service fee
• Reservation via SMS
• Reservation via Post
• Agency fee (surprisingly that one was Free).
• The credit card fees ranged from 0% up to 3.8% and varied between sites. Some charge a flat fee of $11 regardless of the card, but a % of the total cost was common, surprisingly she didn’t charge any credit card fees

I know that list of fee’s is long but it’s no exaggeration. Not all OTA’s had fees this ridiculous and most of those are optional, but in some terms and conditions it also stated, ‘once you purchase your ticket from us, any changes or amendments must be processed directly through the airline’. So they’ll take your money, but that’s it, you’re on your own for anything else, even if they charge a fee to use their service.

Now in theory, one would presume that going direct to an airline would circumvent all these unscrupulous websites. However, practically every search engine site I checked including Sky Scanner, Kayak, I want that flight, Jet Radar, even Google Flights (though they do have an option in some cases to go direct to an airline) would send you to an OTA.

As for flight search engines and apps, they make money out of displaying the results either through click-through’s like google ads or in negotiated contracts with OTA’s and airlines to display their results first, for a fee.

Skyscanner was independently owned, but has since been bought by mega Chinese travel site trip.com (or C-trip.com in China). I’ve seen many people in chat forums argue which flight meta search engine (Skyscanner, Google Flights, Jetradar, Cheap flights etc) is best however you have to remember they are all ‘for profit’.

Their algorithms are based on trying to tempt you to ‘click’ and ‘make a purchase’. Though in some cases, a click is enough to earn revenue from advertising.

On my website, I use Jetradar to show flight search results because it’s clean (less advertising), and also shows budget airlines (which earn zero commission to anyone including me), plus their filters are user friendly, however I also use ‘I want that flight’.

Even a direct comparison between these two search engines, can reveal different prices for the same online travel agent. This is algorithms at work, or in some cases can be ‘cookies’ showing recent information. My Holidays (OTA) is notorious for showing different prices but when you click through, the price is no longer available.

Usually a quick glance at the results of flight prices, in most cases, is a difference ranging from $2-50 between online travel agencies in search results. Look closer at these prices because the difference between using a locally based online travel agent with a good reputation vs an overseas based travel agent with tactics designed to deceive and charge you more, can often only be a few dollars, up front, yet you’ll have peace of mind and less hassle down the line.

It should be noted my own mother recently felt pressured into buying a ticket through an online travel agent. She literally googled ‘cheap flight ticket to Hong Kong’ clicked on the first link and handed over credit card details before I even was aware she was planning a trip, all because the website had a pop-up that said ‘last seat available, 63 other people are looking at this right now’.

Thankfully my mother ended up with an Australian online travel agency and had no issues, but any company can pay google to appear at the top of search results. So always check the terms and conditions and location of the company you’re using.

Then there’s Hopper which claims to ‘accurately predict with 95% accuracy when prices will go up or down‘. Sure they use data, but it’s the airlines that set the prices and you can be guaranteed they are not sharing that information with Hopper, first. Predicting price drops is the same as knowing that airline sales are often cyclical (which I’ve mentioned multiple times in articles and podcasts), so you only need to monitor an airlines sales newsletters for a few months to see patterns, such as:

Jetstar has their Fly Free to Japan sale twice a year, generally March and October
Qantas has an Asia sale in November offering Hong Kong for around $500-$550 and Manila for around $730-$760.

It’s not secret information. The biggest change to travel I’ve seen from Hopper, is they display green, orange or red dots instead of prices on a calendar. Hardly ground breaking. Yes I researched all the company info and when the CEO says in a video, ‘we’re a fantastic company because we have a beautiful and cool office’ that to me says it all.

It should be noted that Hopper is not a travel agent, nor a search engine but a broker. They will happily take your money for flights, (on behalf of the airline, thereby taking a commission in the process) but because they are not a travel agent, they will take no part in amendments or changes to your booking, whatsoever. Despite their marketing tagline they also state in their terms, ‘we do not guarantee any price will go down, we only make predictions’. In other words, they’re making a guess, but implying they know something, which like many OTA’s is misleading.

Despite the internet, OTA websites exist because for airlines to remain profitable, they need to have every flight operating at maximum capacity. By offering commission, they’re offering incentives to be sold. I talk more about commission here.

So OTA websites appear cheaper because they reduce their commission which means they appear higher up in search results, but in many cases, they actually charge you more down the line, in exorbitant and unnecessary fees.

Before you fall into the trap of using a specific site or app to book your flights know this:

The airlines set the ticket price (not travel websites), because they own (or pay) to lease the aircraft, they pay the maintenance, the crew, the ground staff, the landing fees, the cleaning contractors, the fuel, the customer support, the marketing, so it’s the airlines that decide the ticket prices, based on their cost of operation.

Airlines (and hotels) distribute seat inventory (or rooms) via a global system called a GDS (this isn’t new or groundbreaking stuff but helps to build a bigger picture). Every online travel agent has access to the same inventory of seats on a plane. However in some cases, website information is cached by your browser so it can be slightly out of sync. This is how sale fares can appear to be available, but are actually booked out by the time you click through.

No website or app ‘knows’ what prices will be. As I mentioned, airline sales are often cyclical, so you can just as easily sign up to airline newsletters and be ‘in the know’. Also remember there’s only so many seats on a plane. Once they’re sold, that’s it. There’s no more. Cheap seats go first. Sales happen when there are seats to fill, usually to fill seats in advance, though occasionally last minute.

Any website that charges you a fee for ‘their exclusive deals’ is the ultimate scam, you’re paying for them to spam you! Sites like Next Vacay is charging you a fee, for exactly the same information you will find elsewhere, for free. The promises of cheap flights (including their examples which don’t specify a departure point or a currency) are based on budget airlines, without meals, bags, or any extras. The outright misleading claim of ‘Free upgrade to business class’ when you visit their website, is pure data mining. They want your email address and all they will send you is an email about business class flights. That is all.

Just like those facebook offers of free first class flights, holidays etc are mostly data mining to sell your details to spammers or worse. Always check the URL, every competition should have a licence number and if it seems too good to be true, it is.

No matter how much data an app or site has access to, long term there’s many outside factors beyond airline pricing data that affect ticket prices, so no app or site can ‘predict when prices will go up or down’. Reading a variety of news sources will tell you what the oil price is (which affects fuel surcharges), or currency fluctuations (which affects airport taxes) or trade agreements (new airline routings), or any changes in the Boeing or Airbus share price can be an indicator of new aircraft designs which can help decrease ticket price, but these changes take years before we see any real difference. Meanwhile airlines go bust often with little warning which can also affect short term ticket prices.

I was working at STA Travel on September 11, the same day Ansett went bust, I’ve seen cyclones ravage resorts, which pushed travellers to other destinations (which increased prices) the Iraq war dramatically increased oil prices in the short term. Whilst travel always bounces back, there’s many factors influencing prices.

Every website that sells travel is making money off you. A cheap offering, isn’t always a cheap offering if there’s sneaky fees, or it’s impossible to make changes. Booking direct with an airline won’t necessarily guarantee cheap flights because profit margins in travel are slim. The airline needs to maintain as much profit in order to combat future potential losses from the aforementioned changes in oil prices or currency fluctuations.

If a business is registered, part of IATA and the Australian Federation of Travel Agents then it’s probably legitimate but always read the terms and conditions and if you feel something isn’t right, don’t proceed and choose an alternative website.

Basically just make sure you don’t fall for easy traps, designed to deceive during the booking process.

Jade Jackson

One last thing, travel insurance is a whole other post, but know that you can legally purchase travel insurance from any company you choose and it’s recommended that you find a policy that covers your needs. Every policy is different. You do not have to purchase insurance from the same company that sells you an airline ticket, and expensive insurance doesn’t mean good, either.

I’m in the process of building a page with a list of OTA’s, their fees, and any scams I came across on their site, a link to their terms and conditions etc but as you could imagine, it’s quite a project.
Bookmark this page and I’ll include a link once it’s done.

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Thanks for reading!
Happy travels
cheers,
Jade Jackson – Listen to my podcast Jade Talks Travel
Travel Writer | Podcaster | Photographer

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