Warning over dodgy hotel booking sites charging hundreds in fees

When Doncaster resident Louise Kloot Googled the Warrnambool motel she had used before on visits to her daughter, she was surprised to see a low rate for the school holidays on what appeared to be the motel’s website.

She quickly entered her credit card details and was about to click submit, when the retired accounting professor spotted the initial offer of $233 for two nights had shot up to $300. And alongside the new price she saw another additional cost – $149.95 in “taxes and fees” – a 50 per cent mark-up on top of the cost of the room.

Vicki Love paid more than $700 in additional fees for two nights at Mantra Southbank after booking with a third-party site.

“Americans might pay their taxes separately, but we don’t. So at that point, I just got out of the site,” she said.

Instead, she phoned the motel, Eight Spence, and booked the last available room for $300, saving on the additional charges, “and probably foreign exchange fees”. However, she still received an email from the website through which she initially tried to book, inviting her to complete her booking, providing a US phone number and a hyperlink which read: “Eight Spence | Guest Reservations”.

The website she found through Google wasn’t the motel’s, but US-based GuestReservations.com. It’s one of several international websites that allow users to book hotels, including in their home countries, that add easy-to-miss fees to the final transaction, resulting in much higher costs than booking directly. The sites often appear high as paid results in Google searches and include the hotel’s name in the link.

British travel writer Graham Boynton recently wrote about a similar experience after being charged almost double for a room in Manchester’s Moxy hotel via a similar website, ReservationsCenter.com. When Boynton spoke to the hotel, he found a reservation had been made on his behalf through Booking.com, which later confirmed it did share hotel inventory to third-party platforms but did not control those websites’ pricing structures.

Unlike Reservations Center, Guest Reservations has a relatively high rating (3.7 out of 5 – Reservations Centre has a perfect record of only one-star reviews) on consumer satisfaction site Trustpilot, although among recent one-star reviews, multiple Australian customers described similar experiences to Kloot’s. One user said they only noticed being charged $1000, not the $700 they thought they were paying, when they unsuccessfully tried to alter a booking for their 25th wedding anniversary, saying the additional $300 was explained by the company as a “service charge”.

“Needless to say I’m not celebrating my wedding anniversary because I can’t afford it after they wouldn’t refund my 1000 [sic] on my card,” they said.

Vicki Love, of Inverloch, had a similar experience when her family took her “footy-mad” grandson to see Collingwood play Geelong in Melbourne in July. Love booked an apartment on what she thought was the website of the Mantra Southbank hotel, settling for a room which appeared to cost $650 for four people over two nights, similar to what she had paid on previous visits. When she received a confirmation email headed “Guest Reservations”, she thought nothing of it.

“I just thought, oh I’m a guest and this is about my reservation,” she said.

It was a week later when she noticed not only had she been charged for two apartments (she admitted this could be a mistake made during the booking), but each now came to $1014.58, and there was an additional $702.18 charge for “Tax Recovery Charges & Service Fees”. The total cost was $2731.34.

After cancelled credit cards, unsuccessful attempts to change the booking through the hotel, who said she could only do so through the booking agent, and time spent on hold or talking to Guest Reservations’ US-based call centre, her family had to settle for what ended up being a “very expensive room”.

“What got to me through the whole holiday [was] that we could have stayed in the Langham or somewhere,” she said.

When we Googled Mantra Southbank, a sponsored Guest Reservations site with the hotel’s name at the start of its URL was the top result. A search for a room for two adults for a weekend stay produced an initial offer of $384 for a one-bedroom apartment.

On clicking straight through to complete the booking, a new final price of $565.46 was given, plus $203.13 in “taxes and fees”, coming to $768.59 in total, double the initial offer (booking websites like Booking.com typically advise users immediately of the total, not per-night cost). The cost of a similar room on Mantra’s official website was $577.60.

Other offers featured “Free full breakfast” yet carried additional charges of $35 to $64 for this “free” benefit.

Experts on online crime said these practices didn’t necessarily constitute a scam, but were a hard-to-regulate “grey area”. RMIT’s Professor Asha Rao said Guest Reservation’s fees “may be perfectly legal, but [were] definitely not ethical”.

In a disclaimer on its website, Guest Reservations says it is “not owned or sponsored by any particular hotel” and only used hotel trademarks or information “to the extent necessary to assist our customers to book rooms in the travel destination of their choice”.

In the US, where the Federal Trade Commission (FTC) has announced plans to ban “bogus fees” on consumer purchases including hotel rooms, the watchdog (which has not filed a complaint against Guest Reservations) settled with third-party booking platform ReservationCounter.com in 2017 over allegations it had posed as the hotel websites consumers wanted to book on.

A spokesperson for the Australian Competition and Consumer Competition (ACCC) said the body did not comment on specific allegations or potential investigations against individual companies, but that under Australian consumer law businesses must not make false or misleading representations about their prices, or their affiliation with a third party.

They added individuals who believe a business has contravened consumer law can lodge a report with the ACCC.

Rao advised booking directly with a hotel where possible, saying the responsibility still lay with the consumer to be wary of third-party booking websites, which she said bore a resemblance to the ones travellers frequently encounter when arranging a visa for the US, or India.

These sites, which often have official-seeming URLs and appear high in search results, also add hefty fees to the standard government charges for services travellers can perform themselves online.

Kloot fell foul to another similar scheme booking EasyJet flights for a 2020 journey from Paris to Budapest (which was prevented by the pandemic), paying a service charge twice the normal amount to a middle man. She said she wants other people to be aware of third-party booking websites, so their holiday costs don’t get blown out.

“Warrnambool is very popular during the school holidays. I was just glad I got a room,” she said.

Guest Reservations was contacted for comment but did not respond.