CBC Investigates

No room at the inn: Small B.C. lodge claims Expedia listed 'rooms unavailable' for 2 years

The owners of Moon Water Lodge near Victoria say Expedia perpetually listed their inn as having "rooms unavailable" and directed potential guests to their rivals for two years—even though their 13-room lodge was usually half empty.

Travel booking giant blames 'glitch' for directing potential guests of Moon Water Lodge to dead-end site

Lori and Randy Strandlund, owners of the Moon Water Lodge, say their small hotel in Malahat, B.C., is losing business because online-booking giant Expedia is diverting potential customers away. (Mike McArthur/CBC News)

Search Moon Water Lodge online and up pops Expedia.ca as one of the top results, offering "prices and deals."

But then just try booking a room at the Vancouver Island hotel that boasts "one of the best views in Canada".

For the past two years, owners Lori and Randy Strandlund say potential customers clicking on that link were told "rooms are unavailable for your trip dates on Expedia," no matter what date was entered.

In fact, they say, their 13-room lodge 18 kilometres northwest of Victoria is usually half empty — and they worry Expedia has been sending business to rival hotels that pay booking fees to the online giant.

The Strandlunds aren't Expedia clients.

Despite their complaints, Expedia didn't take down the dead-end listing — until the CBC contacted the travel booking site.

But the Strandlunds say the damage has been done.

The 13-room Moon Water Lodge overlooks Saanich Inlet, northwest of Victoria. (Mike McArthur/CBC News)

"I find this a shocking and disgusting practice," says co-owner Lori Strandlund. "I feel like I've been robbed of thousands of dollars of business."

Her husband, Randy, is even more blunt in his criticism of Expedia.

"It's not about being competitive. It seems it's about cut-throat business practice."

The Strandlunds believe they're the latest victims of an online issue that landed Expedia in trouble in France and is the subject of a potential class action lawsuit in the U.S. — the travel site allegedly posting hotels that aren't its clients, listing them as "unavailable," then re-directing customers to member properties that pay Expedia a booking fee.

Expedia has denied wrongdoing in each case.

'A serious problem' 

The Strandlunds say they first approached Expedia in 2015 to discuss signing with the multi-billion dollar company, but chose to list instead with Booking.com, which charges a lower commission.

Then in 2016, a traveller dropped by Moon Water Lodge to ask why the hotel was booked "forever" on Expedia.

"That's when we realized there was a serious problem," says Lori Strandlund.

Lori Strandlund makes up a room with Cristie Watts, an employee at the hotel. (Mike McArthur/CBC )

They say they attempted to resolve the issue with Expedia in 2017 and again this year, trying to negotiate a contract and demanding compensation for alleged lost business.

The company agreed to vastly reduce its booking fees for six months if they signed on, but didn't respond to the Strandlund's request for $5,000 in travel credits.

The couple again decided not to sign with Expedia.

Expedia blames 'glitch'

In an email response to CBC News, Expedia blamed a "glitch" for the constant "rooms are unavailable" search results for Moon Water Lodge.

Mary Zajac, a spokesperson with Expedia Canada in Toronto, wrote that a "placeholder site" was created during "numerous conversations" with the Strandlunds about listing the property on Expedia Group websites over the past two years — and the placeholder site was never made available on Expedia.

"Instead, from our initial investigation, it appears that due to an issue with our processes, Google's web crawling tool found the placeholder site…in response to very specific search queries."

CBC News tried to bypass the erroneous online search results by calling the phone number listed until recently alongside the Moon Water Lodge address on the Expedia site.

Rather than connect with the inn, it rang through to an Expedia call centre — in Cairo, Egypt.

Global online travel company Expedia is headquartered in Bellevue, Washington. It says a 'glitch' caused Moon Water Lodge to show as 'no rooms available' for two years. (Elaine Thompson/AP)

The booking agent stated that since Moon Water Lodge was "updating their inventory," he "couldn't access their system right now" and offered to find "other similar hotels in the area."

Lori Strandlund says she posed as a customer herself and was told her own lodge was fully booked by an Expedia phone rep.

"So if we show as full, and a person takes a different hotel that's part of the Expedia group of companies, Expedia will get their paycheque."

Expedia Inc. reported $10 billion in revenue last year and 15 per cent growth in the first quarter of 2018. Its group of companies include Travelocity, Trivago and Hotels.com, and it controls an estimated 75 per cent of the U.S. online travel market.

Expedia sued in France and U.S.

Within days of the CBC's inquiries, the Expedia site no longer displayed the "rooms are unavailable" message next to the Moon Water name.

The move came after Zajac said Expedia would work to fix the online "glitch" so the Moon Water Lodge site "cannot be viewed under any circumstances" and has also "contacted Google to ensure that their search results are updated to not show this website in the future".

Zajac added "this is the first time we have seen this particular issue."

But the B.C. lodge is not the only small hotel to accuse the Bellevue, Washington-based online company of a similar problem.

In 2011, a Paris commercial court fined Expedia €365,000 ($560,000 Cdn) for "misleading business practices," after it displayed "no rooms available" at two French hotels.

The Buckeye Tree Lodge, a 12-room hotel near Sequoia National Park in northern California, launched a proposed class action lawsuit in U.S. courts against Expedia. (Buckeye Tree Lodge )

In the U.S., two small hotels — one in California and the other in Washington D.C.— recently launched a proposed class action lawsuit against the company.

'Bait-and-switch marketing'

They accuse Expedia of running a "classic bait-and-switch marketing scheme," "falsely advertising hotels as being 'sold out' so it can divert consumers to hotels that Expedia can book for its own profit" — the same issues alleged by the Strandlunds.

The Mansion on O in Washington, D.C., joined the potential class action winding its way through California courts. (Joy Rahat/Mansion on O )

In its filed response to the U.S. court challenge, Expedia once again blamed glitches.

"Technical issues that caused certain unaffiliated properties to appear [on its website] were corrected," it counters. "Plaintiffs' claims stem from coding problems that have been solved. There was never a deliberate or systemic scheme."

None of the parties' claims has been proven in court.

The Strandlunds say it's difficult for their small operation to fight a multi-billion dollar corporation.

"Every month we try to make a mortgage payment, we try to make sure our employees are paid on time," says Randy Strandlund. "It becomes very difficult and challenging and frustrating because it's not a real fair, competitive industry in that way."

Lori Strandlund says she hopes to launch a Canadian class action lawsuit against Expedia — if other small hotels in this country report similar problems.

About the Author

Eric Rankin

Investigative journalist

Eric Rankin is an award-winning CBC reporter. His honours include the 2018 Canadian Screen Award for Best Local Reportage, the 2017 and 2015 RTDNA awards for Best In-depth/Investigative Reporting, and the 2009 Jack Webster award for Best News Reporting.

With files from Manjula Dufresne

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