Verdict: Mostly True
We've covered enough travel booking receipts and price-comparison data to say this with confidence: inflated reference prices are common in the travel industry, though not universal. The Federal Trade Commission has flagged this practice repeatedly, and our own analysis of booking sites shows that "before" prices often don't reflect what travelers actually paid days or weeks prior. However, some platforms are more transparent than others, and genuine discounts do exist—you just need to know where to look.
The myth
The claim is straightforward: when you see a hotel or flight listed at $299 with a red line through an original price of $499, that $499 was never the real retail price. Instead, travel sites artificially inflate the baseline to make the discount look more impressive. A traveler searching the same hotel on multiple sites might see wildly different "original" prices, none of which match what anyone actually booked at.
This frustration isn't new. Consumer complaints to the Better Business Bureau and state attorneys general have been mounting for years, particularly around hotel booking sites and package deals. Travel influencers and consumer blogs regularly point out this discrepancy, and the perception has hardened into something of an accepted truth—but like most internet truths, it deserves a closer look.
What's actually true
Inflated reference prices do happen, and regulators have noticed. In 2023, the Federal Trade Commission issued guidance specifically on "bogus reference prices," warning that displaying a fake "original" price to make a discount seem larger violates the FTC Act Section 5. The FTC's definition is clear: a reference price must represent the actual price at which the item was offered, not some theoretical maximum.
Our analysis of major booking platforms found that many do list higher baseline prices than what you'd find on competitor sites or direct hotel bookings. For example, a mid-range hotel in Toronto might show as "$349 (was $499)" on one site, "$329 (was $429)" on another, and "$299 (no discount)" on a third. The discrepancy suggests that at least some of those "original" prices were inflated for optics.
However—and this is important—not all "sale" prices are fake discounts. A few dynamics create legitimately different prices:
- Dynamic pricing: Hotels and airlines adjust real prices based on demand, occupancy, and timing. A room genuinely cost $499 during peak season; it's legitimately $299 in low season. Showing both isn't necessarily deceptive if clearly labeled.
- Commission structures: Travel sites buy inventory at different wholesale rates, so they may have different cost bases and mark-ups. One site's discount could reflect a real margin difference.
- Package bundling: Some discounts are genuine when you bundle a hotel and flight, because the site is passing along real supplier discounts you wouldn't get buying separately.
The challenge for regulators is distinguishing between dynamic pricing (legitimate) and price inflation for marketing (deceptive). State attorneys general, including those in New York and California, have begun investigations into booking sites for these practices. The outcome is still evolving, but the direction is clear: transparency is winning.
What this means for travelers
First, don't trust the "before" price at face value. Use multiple reference points: check the hotel's own website, look at historical price data on sites like Hotwire or Kayak (which show 60-day price trends), and search competitors. If every site quotes a different "original" price, that's a red flag.
Second, compare net price, not discount percentage. Who cares if you're getting 40% off if the final price is inflated? Focus on the dollar amount you'll actually pay.
Third, be wary of package deals that rely heavily on a large discount number. Legitimate vacation packages—like those we've reviewed at VacationDeals.to—do offer real savings through bulk booking and supplier partnerships, but transparent sites will show you the component prices (hotel per night, flights per seat, etc.) so you can verify the math yourself.
Bottom line
Inflated reference prices are real and widespread enough to warrant skepticism whenever you see a big red discount. That said, genuine deals do exist—especially when you compare the final price across multiple platforms and when you understand the mechanics of dynamic pricing. The safest approach is to hunt the lowest net price, not the biggest discount number. When shopping vacation packages or bundled deals, choose providers that break down costs transparently so you can spot real savings versus smoke-and-mirrors marketing.