The Practical Nomad

The Practical Nomad's top tips for travelers
by Edward Hasbrouck

from The Practical Nomad: How to Travel Around the World
and The Practical Nomad Guide to the Online Travel Marketplace

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2.5. Are online travel agencies biased?

Most travel agencies (other than discounters and agencies that charge service fees) are biased toward airlines and other suppliers of travel products, and against consumers. There's an additional question, however, of whether agencies, or their Web sites, are biased toward particular travel services vendors. If a travel Web site lists one airline first, is that because that airline is the best choice for you, or because it's the best choice for the agency?

In most cases, any bias in online displays of airline prices and options is accidental. But that is changing -- for the worse. Just as a skilled salesperson in any shop will suggest that you buy the product on which they make the most money, so travel agencies have every reason to program their computers to suggest the choices on which they make the largest commissions.

To date, most online travel agencies have relied on simpleminded interfaces that merely display whatever options a CRS suggests, in the order they are listed in the CRS. As online travel agencies become more focused on profitability, and have time to develop more of their own software, they can be expected to add modules between the CRS's and their Web sites to rearrange or filter the choices you are shown to steer you to those on which the agency will make more money. That could mean favoring airlines that give the agency a higher commission in exchange for steering business to them. Or it could mean simply selling prioritization in displays, just as Internet search engines do.

In the past, CRS's were accused of biasing their displays to favor the airlines that owned them. This gave the few airlines that own the major CRS's oligopolistic power to impede new airlines' efforts to make themselves known to consumers. In response to antitrust complaints, the Federal government
adopted regulations for airline-owned CRS's in the USA that prohibit them from deliberately biasing their flight or fare displays to favor specific airlines.

Bizarrely, the CRS regulations don't restrict what information CRS's provide directly to the public, only what they provide to travel agencies. One Justice Department enforcement lawyer conceded to me, when pressed, that the only way a consumer could be assured of getting an unbiased display from the CRS was, literally, to go to a travel agent's office and look over the agent's shoulder at their CRS display. That's not feasible, of course, and even experienced travelers wouldn't understand the formats used in CRS displays anyway.

It's completely legal for travel agencies, including CRS-owned travel agencies (such as Travelocity.com and Trip.com) to bias their displays to favor choices that are more profitable for the agency over those that are cheaper or better for travelers, or to sell positioning to airlines that want to pay to get their fares or flights listed first. It's actually surprising that they haven't done so sooner; I can only take that as a sign of their focus on market share rather than profits. I'm sure it will be happening by the time you read this.

You could only trust an online travel agency to give you an unbiased display if they made a contractual promise, in their terms and conditions, to display flights and fares in the exact order in which they are ranked by the CRS. No online travel agency does this, and none is likely to unless consumers demand it. Orbitz.com claims that it is "contractually" committed to an unbiased display. But they're talking about Orbitz.com's promises to participating airlines not to favor one or the other promises allegedly contained in contracts which have not been made public and not about anything in Orbitz.com's contract with consumers.



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