Longtime readers of this site know that I’m a fan of the opaque booking sites (Priceline and Hotwire in particular) for finding great lodging deals when I’m traveling on my own dime (and not using points). And while there’s always an element of risk in booking a property without knowing the name and location, I’ve learned to embrace the “comfort” of knowing the star-rating and the approximate area of town where I’ll actually be spending the night. However, in my most recent use of the site, Hotwire really misrepresented the rooms it was selling.

I used Hotwire to book a nearly last-minute single night’s stay in Madrid on our recent 11-day trip through Spain. It was the final night before our flight back, and, to be honest, we really weren’t too picky about location or amenities. It was going to be a crash pad, plain and simple. So I checked Hotwire and found a 4-star hotel in the center of the old city for $69. Under 50 euros for a 4-star? Sold.

Hotwire provides the star-level, a partial list of available amenities, and a map indicating the area where the hotel might be. And the winner was:

Whenever I book a room this way, I immediately go to two sites. First, I find the hotel’s own website — in this case, the Apartamentos Turisticos Principe 11 — and I check the TripAdvisor reviews. Both screamed: “This is not a 4-star accomodation.” Heck, the Apartamentos’ own site proclaims their 2-star status.

A classic problem of the star-based rating system is that it doesn’t mean the same thing from one site to the next, or from one country to the next. Some countries have government regulators who determine a property’s number of stars, but also their classification (hotel vs. pension vs. vacation rental vs. hostel, etc. etc.). The problem in this case is that the 4-star classification has no relation to Hotwire’s own internal description of what a 4-star property is supposed to be. They offer examples of brands that could be, or at least represent the quality level of, 4-star hotels (Hyatt, InterContinental, Omni) and a description of the amenities you should expect at each star level. Here’s a screenshot of the latter:

No way was this a four-star. Not even close. It had a decent bathroom, it was quite spacious, and while its decor was minimalist, it still eked out some charm, with high ceilings, thick wooden shutters, and a tiny balcony that faced onto a busy but attractive side street. But it lacked just about every other characteristic of a four-star hotel. No onsite restaurant or bar. No fitness center. No upscale furnishings or bedding. If we were staying longer, sheets would be changed weekly. Etc.

And yet… we liked it.

For starters, it was a deal. $69?! For central Madrid? I’ve stayed in far worse hotels at higher prices (roadside motel in Grand Island, Nebraska, I’m looking at you!). No, it wasn’t the Ritz, but it was clean, and it had a nice vibe. The staff working the tiny front desk were friendly and helpful. The location was fantastic. The kitchenette was fully-stocked, if we had wanted to make a meal. The marble floors were clean. And the view onto the street was charming. It felt like we were crashing at a friend’s apartment, rather than staying in a hotel. And, again, it was only ~50 euros a night.

So, while this wasn’t luxury, and while we still enjoyed it (especially for the money), it still bothers me that Hotwire is selling these apartments as a four-star hotel. This was a big misrepresentation.

A few photos from the room, after the jump.

Both agencies are promising that the fees will be on hiatus until May 31, 2009. But bringing the charge back may be tough: Back in 2007, Priceline and Hotwire dropped their booking fees “temporarily,” and they still haven’t brought the fees back.

That leaves Orbitz as the lone holdout among the biggest U.S. travel agencies. So when will Orbitz, the biggest holdout, throw in the towel on fees?

Consumers should welcome the rollback of these add-on booking charges. But this episode shows how brutal the online travel marketplace is right now. If online travel agencies want to collect a surcharge, they’re going to have to get creative, and earn it. Simply offering price comparisons and a few online alerts — which are free elsewhere — won’t cut it. And Travelocity, Expedia, Priceline, and Hotwire have admitted that.

Sure, Orbitz may counterargue that they provide value-added with their price guarantee, but since that service is of relatively limited value, I wouldn’t pay a premium for it (though maybe it’s worth the $6.99+ gamble for someone else…)

Travelocity is even poking a stick in Orbitz’ eye by copying their “Price Assurance” model and bringing it to vacation packages under the name “PriceGuardian.” If someone else books the same package as you, and the price has dropped, you get a check for the difference. Yeah, good luck with that.

What we may see is a shift to voluntary fees for add-on services, much like the airlines are going a-la-carte themselves. Want a price-drop guarantee? Pay a few bucks up front. Want text message alerts? A few more bucks. That I could see happening. But the standard one-size-fits-all fee is history at the mainstream agencies.