Most travelers aren’t trying to hide their expenses from campaign workers, or anyone else. But if they are, the saga of U.S. Rep. Duncan D. Hunter (R-Calif.) and his wife, Margaret, has made one thing clear: Booking flights and hotels through Expedia does not guarantee that your destination will stay secret.
Last week, the Hunters were indicted on federal charges that they spent $250,000 in campaign funds on personal expenses — and, in the process, allegedly came up with some pretty imaginative explanations and methods of obfuscation. They listed household toiletries as gift-basket items and tried to disguise a purchase of Hawaiian shorts made at a Maui pro shop as “golf balls for wounded warriors,” the indictment said.
When it came to some of the travel expenses, Margaret Hunter attempted to conceal the misuse of campaign funds by “reserving hotels and paying other personal vacation expenses through Expedia, with the expectation that campaign records would not reveal the names or locations of their destinations,” the indictment said.
In this effort, she allegedly spent $918.60 to fly her sister and two other family members to a funeral in Tucson, but told the campaign treasurer it was a flight to Baltimore for the “NRCC winter meeting.” She also allegedly spent $402.90 for two rooms at the Westin Los Angeles Airport during a family member’s dance competition and $265.94 for a hotel room at the Holiday Inn Express in Picayune, Miss., during a family vacation.
That made us wonder, just how do bookings made through online travel agencies appear on credit-card bills? Expedia declined to comment for this story, so we turned to other experts for guidance. The answer: It varies.
“The brand on the credit-card statement can be an online travel agency or the particular airline or hotel,” Devon Nagle, head of communications at Priceline.com, which is part of Booking Holdings, the world’s largest online travel agency, said via email. The deciding factor is which of the entities is the “merchant of record,” or the party collecting the payment.
And what determines the merchant of record? It depends on whether the online travel agency is operating under the agency business model or the merchant business model, explained Dennis Schaal, executive editor of Skift, a website that covers the business of travel through news and research.
An online travel agency is utilizing the agency model when it lists a hotel and the guests pay when they arrive at the property; in this case, the hotel is the merchant of record. An online travel agency is using the merchant model when it requires consumers to pay at the time of booking, whether it is for a flight, hotel stay or a vacation package. In that case, the online travel agency is the merchant of record.
Expedia operates under both models, according to its annual report filed with the U.S. Securities and Exchange Commission — though it tends to use the merchant model more often for hotel bookings and the agency model more often for flight reservations.
“Under the merchant model, we facilitate the booking of hotel rooms, airline seats, car rentals and destination services from our travel suppliers and we are the merchant of record for such bookings,” the report says. “The majority of our merchant transactions relate to hotel bookings. Under the agency model, we facilitate travel bookings and act as the agent in the transaction, passing reservations booked by the traveler to the relevant travel provider.”
That means that if you purchase a hotel stay through Expedia, then Expedia will probably show up on your credit-card statement as the merchant of record. If you purchase a plane ticket, on the other hand, the airline is likely to show up. (Airlines are almost always the merchant of record, the travel experts we consulted said.)
But there’s an important caveat regarding hotel stays: In some cases, Expedia allows travelers to choose whether to pay Expedia at the time of booking or pay the hotel at the time of the stay. Travelers who select the latter option will see the hotel listed on their credit-card statement.
So, getting back to the alleged purchases by Margaret Hunter mentioned in the indictment, a flight to Tucson such as that one probably would have shown up on a credit-card bill under the name of the airline, perhaps even with the itinerary. In the case of the hotels in California and Mississippi, it would have depended on whether a customer paid in advance or at the property.
The bottom line is that travelers who think booking through Expedia or any other online travel agency is a way to keep their destinations secret should think again, especially when it comes to airplane trips.
And remember, credit-card statements aren’t the only record of travel transactions. Among the evidence listed in the Hunters’ indictment: An email from Expedia to Margaret Hunter, confirming the reservation of a room at the Holiday Inn Express in Picayune, Miss.
Correction: An earlier version of this story referred to Priceline.com as the world’s largest online travel agency. Booking Holdings, the group that owns Priceline.com, is the world’s largest online travel agency.
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