Beware third-party booking sites

Travel experts warn of hidden fees, failed communication and other risks

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By MEHARWAAN MANAK

Travelling can be stressful at the best of times, but more so for those who get exploited by third party booking sites.

When Ryan Kalkat was 18, he and his family planned to go to India to see his critically ill grandmother.

“For the four of us to get there was nearing like six to $7,000 that our family just didn’t have,” Kalkat recalled in an interview with the Voice.

His parents decided to sell their house in order to buy their tickets, which were booked through the popular travel site, Expedia.

“When we got to the counter, we were told that Expedia never actually sent over our reservation and that we had to contact Expedia …  we tried calling, but we missed that flight,” said Kalkat.

With all that money gone to waste and no way to get it back, the Kalkats were not able to see their grandmother until her funeral the following week.

“Expedia has never covered anything back. They said that they did send it, but the airline said they didn’t … So we’re kind of stuck in the middle,” he said.

Five years after the family tragedy, Kalkat is now in flight school training, aspiring to attain his private and commercial pilot licences.

Travel industry experts say his story illustrates just one of the problems consumers face when dealing with third-party booking through companies like Expedia, Booking.com, FlightHub and Kayak. 

According to experts, the popularity of travel continues to grow, especially now in the post-COVID world. 

Third-party booking services are at an all-time high, but consumers must be aware of the potential risks and take steps to protect themselves from an array of risks. These include fraud and other forms of exploitation such as hidden fees, limited options, and a lack of transparency when it comes to their personal information.

Data collected by the online site Travelperk showed that the online travel industry generated revenue worth $667.55 billion in 2023. 

With a projected growth at a compound annual growth rate (CAGR) of 12.99 per cent between 2023 and 2030 and is expected to hit $1,569.25 billion.

Consumers complain about hidden fees, poor customer service

Third-party booking services are advertised as convenient and sustainable. 

But experts and travellers interviewed by the Voice said customer service is not a priority for airlines and other service providers when bookings are not made directly through them.

Cindy Ricketts, an airline customer service agent and trainer, has been working in the industry for over 25 years and describes her experiences with third- party bookings as “a lot of miscommunications.”

“A lot of things are not transferable to us,” Ricketts said, citing extra fees for baggage, fare bundles and seat assignments.

“This is how third parties make money.”

Consumers will pay upfront with the online booking service expecting for their check in service to go efficiently when in reality, Ricketts said “because funds were not transferred … we can’t honour anything because there’s no proof on our side.”

How do these miscommunications happen?

Sean Samii, a travel agency owner for more than 20 years, said “if you buy a ticket from a travel agent, that ticket stock that airline sold belongs to that travel agency because it’s reported through International Air Transport Association (IATA) and Bank Settlement Plan (BSP) Canada.”

“BSP is the middleman between the travel agency and the airline. Once you buy a ticket, it goes through the BSP and then to the airline,” said Samii.

This system handles all the transferring of the funds to the airline.

Another risk of booking through a third-party platform is the lack of direct communication with the service provider.

“It’s better to buy from a travel agent than a third party because there are a lot of times that you know you don’t receive notifications,” Samii said.

When booking directly with an airline, hotel, or car rental company, consumers can communicate their specific needs and preferences directly to the provider and notifications will be sent out.

“We get trained, or we get updated on products on a daily basis or monthly basis. We go to trainings, we go to seminars, we go to trade shows,” Samii added.

Third party sites don’t always give airlines passenger details

The issue when booking through a third-party platform is that communication is often mediated by the platform itself, which may lead to miscommunication or misunderstandings between the consumer and the service provider.

Alice He, a Vancouver Airport coordinator of three years, compared the concept to subletting.

“Airlines contract out third parties and their agreements with a set number of tickets from an airline or reservations they can make with an airline,” He told the Voice.

From He’s experience, “a lot of times a lot of guests show us their itinerary and it shows payment for seat selection, but it’s not communicated with the airline therefore we don’t have any money.”

This is the easiest way for third parties to collect hidden fees and charges — at the consumers expense.

Airlines used to pay commissions. Now they don’t. 

If third parties or travel agents are buying from a consolidator, they can mark it up to 22 per cent of the fare. However, this markup is usually done by not transferring funds to the service provider directly.

“If you’re a good travel agent, you won’t bend the rules like that. You won’t do it. It’s not legal …  It’s problematic for the airline. It’s problematic for the guest,” Samii said. However, “there are crooks everywhere.”

Another risk associated with third-party bookings is the potential for limited flexibility in terms of changing or cancelling bookings. 

American Airlines is one of the many airlines that has cracked down on their eligible travel policies stating that rewards, airline miles, elite benefits, and customer service will only be provided to those who book directly through them starting May 1, 2024.

Rooven Maharaj, an airline agent, said “once those bookings are made through third party, you can only do so much.”

While service providers are subject to industry regulations and standards, third-party platforms may have their own terms and conditions that govern the booking process and the resolution of disputes.

“Unfortunately, you would not be able to change that ticket because it was issued by a third party.” Maharaj said. “So, all the changes are to go through them.”

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