The art of the deal
Best isn’t always better
In one of the strongest rebukes of the sector in this region, the Australian Competition and Consumer Commission (ACCC) recently won a federal court case against online accommodation comparison website, Trivago. A judge ruled the site had misled customers about hotel room rates. A penalty may potentially be worth millions of dollars.
The ruling rejects what German-based Trivago held was its competitive advantage: it was an aggregator to help travellers get the best deal. You typed in your preferred city, or specific hotel, and it scoured the web to find the best advertised rate for you to lock in.
Simple. But not all that accurate.
Using Trivago’s own data, the court heard that, in two-thirds of hotel price listings, higher priced hotel offers were selected as Trivago’s ‘‘top position offer’’, rather than lower-priced alternatives.
The Australian judge said of its business model: ‘‘Contrary to the impression created by the relevant conduct, the Trivago website did not provide an impartial, objective and transparent price comparison service.’’
It’s a digital-age version of the tour guide who keeps taking you to the best ‘‘artisan suppliers’’ of the souk, that are really his mates giving him a little slice of the revenues.
Although the court ruling was in Australia, the ACCC’s New Zealand counterpart, the Commerce Commission, has been tracking the case and is confident the ruling will change advertising behaviour on this side of the Tasman as well.
A Commission spokeswoman said: ‘‘We will continue to liaise with the ACCC on Trivago, with the objective that any changes made by Trivago to their practices as a result of the case are also made in New Zealand.’’
The Commerce Commission has received 19 complaints against Trivago since mid-2015, but does not currently have an investigation open against Trivago, and the company no longer screens the ads that led to the ACCC’s case.
So what should you do when trawling through webpages trying to get a good deal? Even without ‘‘super-aggregators’’ like Trivago, there are simple ways to feel like you’ve snagged a deal.
A simple one is to independently compare online travel agents when searching for flights, accommodation or tours. You’ll have a few more browser tabs open, but a simple comparison will give you an idea of market rates and what’s fair.
You have to ask yourself if it’s worth your time to spend hours comparing multiple properties in order to save a few bucks.
If the answer is ‘‘yes’’, remind yourself that because hotels and online travel companies can pay these websites to bump them up the rankings, the best deals may not be the ‘‘top-ranked’’ result, particularly if the results are in an order titled ‘‘recommended’’, ‘‘best value’’ or ‘‘our top picks’’, which can be read as ‘‘who paid us the most cash’’.
This is now the default setting for how your search results are ranked and displayed. However, all of them still allow you change how results are ranked – obviously, you should first opt to rank results by ‘‘lowest-priced’ or ‘‘miles from city centre’’, or another, more measurable, ranking, rather than ‘‘our top picks’’.
Another, more traditional option is to – wait for it – call the property or travel company to get an onthe-spot deal. Even if they only match the price, you might get added bonuses such as free breakfast, parking or late check-out.
Even more of a throwback (in some peoples’ eyes), you can still pop into your local travel agents to present a range of travel options to suit your needs and budget. Travel agents do work on commission from the hotels and tours they sell you, so you may also be steered towards an option that will pocket them a nice fee, but the ability to match their collective wisdom with your specific wish list, must-haves and biggest bugbears can give you the peace of mind that you’ve bagged a deal and have somebody who has your back when things go wrong.
And, if you do see deceptive deals, do shout. A Commission spokeswoman said: ‘‘It is particularly useful if complaints are supported by screen shots, as price comparison sites change constantly.’’
The Trivago case is a digital-age version of the tour guide who keeps taking you to the best ‘‘artisan suppliers’’ of the souk, that are really his mates giving him a little slice of the revenues.