Trivago should send a warning to consumers

Travellers are being warned to think twice before using online comparison websites, writes

Sophie Elsworth

CONSUMERS using online comparison tools to find the best deals should be “sceptical of these sites” after Trivago was caught misleading customers.

The Australian Competition and Consumer Commission’s chair, Rod Sims, said the fallout from the Federal Court action last month that found hotel-booking website Trivago had breached Australian Consumer Law was significant for holiday-makers.

“They (comparison sites) are there to make money – they’re not there to help you,” he said.

“By all means use these sites to gain a bit of knowledge but I would call up to whoever it is you want to book with and see what price you can get.

“I would think most of the time you could get a better price by ringing up than you will through these sites.”

The ACCC action against Trivago found the site’s online and TV advertising used algorithms that incorrectly ranked the low-priced deals.

Instead, Trivago boosted the sites that paid it more to the top of the searches, and it now faces hefty fines running into millions of dollars.

Trivago was first dobbed in by hoteliers who noticed discrepancies, including strike-through prices on its sites advertising discount deals.

It was proved to be false advertising – comparing the price of a luxury room versus a standard room to appear as if the customer was getting a saving when in fact they were not.

Queensland Consumers Association spokesman Ian Jarratt urged consumers to be cautious before signing up to any deals via comparison sites. “With commercial sites it is too easy to think ‘she’ll be right’ and ‘they are all the same’,” he said.

“However, there can be substantial problems for consumers when using them, and they do differ greatly in what they offer, coverage and operations.”

The action by the ACCC found that, in 2018, Trivago misled consumers into thinking the site was an impartial and transparent tool that compared hotel room rates.

Trivago ran problematic ads from 2013 to 2018 and aired the ads more than 400,000 times.

Mr Sims said anyone making hotel bookings could use comparison sites “to help find a hotel”. “But once you have got a hotel you would like to stay in, ring them up,” he said.

Mr Sims said it would be difficult to reimburse customers who had lost money spent on dud deals identified in the Federal Court action.

The main income stream for Trivago is the cost-per-click that it receives from advertisers each time a consumer clicks on one of its deals.

Crown Money Management chief executive officer Scott Parry said,when seeking good deals, “nothing beats picking up the phone”.