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NEWS, TIPS & BARGAINS | THE INTERNET TRAVELER

In a Web search, some hotels pop to the top -- here's why

March 14, 2004|James Gilden | Special to The Times

When you use an Internet site to find a hotel, the last thing you may be interested in is which one comes up first -- and why.

What you see when you search for hotels is determined by complex sets of algorithms that can factor in a type of "paid placement." And that means the results may not be as impartial as you think.

I searched for a hotel in New York City for Memorial Day weekend using the same criteria on seven hotel websites. The first-choice hotel was different on every one. In fact, only one hotel showed up twice on any of the top 3 lists; the rest were different.

I was puzzled. Why, for example, did the New York Hilton at $212 a night appear first on the search results at Expedia when the newly renovated (and, for my money, better) Sheraton New York Hotel and Towers a block away at $45 less per night was buried deep in the search results?

Given the popularity of booking on the Internet, it's an important question.

Expedia, Travelocity and, to a degree, Orbitz, among others, practice a sort of "paid placement." That is, preferred placement is given to hotels that give websites a bigger commission on bookings.

"It's no secret that Travelocity has a number of merchant relationships and we display hotels that are in that merchant program before we display hotels that are not in our merchant programs," said Josh Feuerstein, vice president of hotels at Travelocity.

Orbitz says it does not give preference to its better margin hotels because its Orbitz Saver Rates include hotels with better margins as well as some from Travelweb that are not as profitable for Orbitz. Still, Orbitz Saver hotels are given better placement than hotels being sold at "retail."

"In the search results, it is Orbitz Saver first, retail second," said Kurt Weinsheimer, vice president of hotels at Orbitz.

To be fair, it's simple to refine a search based on price, hotel name or star rating. But that first search result is important because it can, like any advertising, influence your decision.

"What is happening here is consumers are being steered based on the profit motive of the websites rather than the best deals for the consumer," said Gary Ruskin, executive director of Commercial Alert, an anti-commercialism group that Ruskin founded with consumer advocate Ralph Nader. "And there is little, if any, disclosure."

In 2001 Ruskin's group took on the big search engines, including Google and Yahoo, about paid placement. In a complaint to the Federal Trade Commission, Commercial Alert said that, without disclosure, consumers were being misled.

The FTC agreed and in 2002 mandated disclosure of paid placement. Paid placement comes in many forms. "There is a family of phenomena that are paid placement, and this is one of them," Ruskin said.

The FTC has not received any formal complaints about travel websites' use of paid placement, and there is nothing illegal about how results are sorted. But Beverly Thomas, an FTC staff attorney who helped draft the 2002 letter to the search engines, agrees with Ruskin.

"People have a right to know when [they] are being solicited," Thomas said. "They need to be disclosing any connection that is influencing their choices."

At least one website agrees.

"We can do a better job of explaining Expedia Picks," which are specially negotiated rates, said Andrea Riggs, an Expedia spokeswoman. "There's no reason not to do it. We just haven't done it yet."

James Gilden can be contacted at www.theinternettraveler.com.

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