Online travel websites initially put brick and mortar travel agencies out of business booking airfare because there was very little commission to work with, and that was matched perfectly with a self-service model that required very little human contact.
Consumers did lose the advice that came with a good travel agent, who could suggest which carrier best met a customer’s needs or counsel which connections were too short or hubs to avoid for weather.
Premium cabin international airfare still pays good commissions, and it’s also why the product can be discounted — such as by American Express’s international airline program or bundled as part of a package.
Booking hotels generally has higher margins than airfare, and doesn’t require the same model of light touch customer service, so it’s surprising that online travel agency sites don’t do a better job of helping customers make the right choices for their needs and providing better one-on-one service when things go wrong. Put another way, considering they have one job it always amazes me how bad Expedia is.
As soon as I saw the story of the man who was charged $4600 for a one night stay at a Holiday Inn my immediate reaction was… Expedia.
The Holiday Inn Express Hotel & Suites in Willmar, Minnesota was showing up at Expedia’s Canada website (expedia.ca) for a rate of CAD$207.95, and a business traveler booked it. It was for a stay the following night and he didn’t scrutinize the fine print or final cost breakdown, he was good with a US$155 a night rate plus tax.
Only Expedia charged him CAD$6181 (US$4600) for the night, tacking on $2340 in taxes and fees and a $2105 ‘property fee’. Afraid to actually spend the night at that rate, he booked himself into the nearby Best Western for $115 — and he started trying to get the $4600 charge reversed, which is when he got Expediad.
“Obviously I thought it was a mistake, and right away I called Expedia,” Smerchanski said.
“I ended up talking with them, trying to make my way up to someone who could tell me exactly what was wrong. I was kind of assured right away that this was obviously a mistake and they were going to have it cleared up.”
But instead of giving him a refund immediately, Smerchanski says Expedia has given him the runaround for days.
“It just didn’t seem like they thought anything was wrong,” he said.
“I go like, ‘Hey hold on a second here. Don’t you think something is off? This is a $6,200-a-night room in Willmar, Minn. This is out of this world.”
Smerchanski said he’s spent more than eight hours on the phone with at least half a dozen agents. Each time, he said, he was given a new case number.
“No one can give me a clear answer,” he said.
“I basically just kept getting the same runaround, that they weren’t able to authorize a credit for that amount. I kept saying, ‘Why am I talking to them? Get me up to so
Expedia Dancers Don’t Provide Customer Service. Flickr: Juggernautco
It’s only after media started covering the story that Expedia issued a refund and admits, “In this particular instance, we do feel we could have resolved this issue in a quicker manner.”
It’s not the first time, apparently, that Expedia has done this with bookings at the Willmar, Minnesota Holiday Inn Express.
I often wonder if the two worst things about hotels aren’t resort fees and Expedia?
(HT: Ken A.)
It’s a little umclear who was charging the taxes, fees, and property taxes–Expedia, IHG, or the local hotel itself? If this has happened before why has it not been corrected to avoid future errors?
crooks… they are all crooks… Just like “Basic Economy” for airlines, resort frees are nothing but a way for hotels to hide what they are really charging you.
Call the credit card company, Expedia will jump on things in a hurry then. Repeat after me: Chargeback!
@Robert – I have no knowledge in this area, but will the CC company reverse charges over a “fine print issue”? I think the press was a better way to go (shaming) in this case, though I’m normally with you.
Commission caps on airline tickets are what killed most travel agencies. I was a travel agent at the time. Imagine how realtors would react to a $2,000 cap on commissions.
…where is the story? What happened, and why? There was 6,000 in fees? what were those fees? why did this happen? this seems like an incomplete story.
Hidden hotel fees at online travel agencies is one of travel’s great annoyances. In recent years, I’ve been impressed by booking.com’s system because taxes and fees are included when you do a search for accommodations. So it was easy to quickly comparison shop. But now, for some reason, some fees aren’t included. Like I’ve done several searches for European hotels in the past month where I think I know the price only to be hit with a significant additional fee when I click to reserve. These are mostly smaller properties, that are adding things like cleaning fees. This policy of allowing proprietors to hide fees from the search function — and therefore look more attractive than their competitors — obviously sucks and is evil.
BTW, and I think I speak for most of your readers, the world will be a better place if you don’t recycle that photo of the Expedia dancers again. One hundred times is enough.
@ Robert — I agree with you. When I’m overbilled by a travel provider (it happens about once a month to me), I’ll make one phone call or email to the business to try to fix it. If the provider doesn’t respond, I contact my credit card. It usually works (sometimes the credit card company writes it off, sometimes they contact the provider and get the charge reversed). It’s a more efficient use of my time.
BTW, this is a good reason not to pay cash for online accommodations. I recently booked a small property on booking.com that didn’t take prepayment and required on-site payment in cash. When I got there, the proprietor insisted on charging me more than was specified in my booking. I wasn’t in a position to walk out. Now I have to go back to booking.com and get them to pay me back for the over-charge. That’s a much harder challenge than getting Citi or Chase to reverse an over-charge to my credit card.
What a piece of revisionist history!
Most travel agents were truly awful, and just pushed whatever airline was running a promotion that would take them to Hawaii for free to unsuspecting customers even though other solutions would be better for the customer. I have encountered various situations where they outright lied to consumers (“no, there’s nothing cheaper”, or, after lots of fake pecking on the terminal “I tried hard but United’s flight is sold out”). After all, they were low-paid salespeople of the airline, not consultants paid by the customer. A very rare few were excellent, but those were far and few in between.
And companies are free to do what they want. Yes, the fine print said that he has to pay it, he agreed to it, so Expedia doesn’t have to refund a penny in the absence of consumer protection.
Because, deregulation. The cure-all snake oil that wealthy politicians successfully peddled to the ignorant voters to increase corporate profitability.
This had to be a fluke, or else we would hear more of these stories.
Regardless, the credit card companies cannot be a party to a fraudulent transaction without risking a letter from Morgan&Morgan, class action style. The Visa/MC/Discover/AMEX logo as a payment method gives their customers some degree of assurance that they aren’t dealing with a fly by night outfit from Craigslist, complete with a method of recourse if it is.
For these situations, Amex and Discover may be the best advocate for the consumer. Visa, I don’t think so.
I agree with bryan t. Where is the rest of the story? Why was the charge so high. And I agree with Robert, who says have the credit card charge reversed. 30 minutes with Expedia would have been my max. The credit card companies in the U.S. are required to reverse disputed charges until the dispute is resolved if you ask within the deadline. My credit card is excellent at that. I seldom need to even get involved to settle a credit card dispute, other than the orginal request to reverse the charge.