The Internet Traveler
November 27, 2005
EARLY this month, some astute travelers noticed that Expedia was selling hotel rooms at two Hiltons in Japan for the fire-sale price of less than $4 per night.
What began as a simple error in the conversion of yen into U.S. dollars quickly snowballed into a public relations nightmare for Expedia.
"There was a technical problem," said Linda Bain, vice president of communication for Hilton International. "We just started a new agreement [with Expedia to sell these properties] and these hotels had just gone live."
Word of the error on the rooms in Tokyo and Osaka spread like wildfire through Internet travel boards such as FlyerTalk.com. Its first post about the deal came at 6 a.m. Nov. 5 and travelers promptly began reserving rooms at the hotels (rooms that I found selling online at http://www.hilton.com for about $160 a night last week).
By the time Expedia corrected the error 24 hours later, the damage was done. Neither Expedia nor Hilton would comment on the number of rooms that were booked at the low prices.
In fact, Expedia isn't saying much beyond a public statement acknowledging the error. Requests for interviews with Expedia executives were declined.
The fact that an error can be publicized and acted upon so quickly is very telling.
"It's really not about FlyerTalk per se," said Randy Petersen, founder and president of FlyerTalk. "It is about the impact of the Internet as a communication tool.
"Many industries, including travel, have been pummeled by this social media in terms of the extent that information about a value offer and even mistakes can spread," he said.
Once the full extent of its recent error was understood, Expedia chose to honor only some of the reservations: those made for November and those made when booked as part of a package purchased on Expedia.
This decision did not please members of FlyerTalk who had made a reservation that did not fit Expedia's criteria. Talk of legal action and lost customer loyalty has burned up the board ever since. In the 10 days after the first post, posts on the topic had more than 175,000 page views, Petersen reports.
Travelers say much of their frustration stems from what they called Expedia's inconsistent responses by customer service representatives. Some travelers on FlyerTalk report that they have had their reservations confirmed and reconfirmed, even though they fell outside of the parameters spelled out publicly by Expedia. A $250 voucher for future travel packages to Japan that Expedia used as a peace offering was difficult for customers actually to use, according to some on FlyerTalk.
"The real problem was the lack of communication internally at Expedia," said Jared Blank, of Online Travel Review (www.onlinetravelreview.com). "They are well within their right to choose not to honor the reservations, and if they had done that, it would be the end of it."
Maybe. For its part, Expedia said in its public statement that it was trying to "resolve this episode in a fair and equitable way" and deal with an error that "was obvious to consumers."
It's unclear why Expedia didn't simply take the hit, acknowledge its error and move on. One expert thinks Expedia will regret its approach.
"Most people don't know where the point of differentiation is between Expedia, Travelocity and Orbitz," said Robbie Vorhaus, a brand and communications strategist and contributor to CNN. "You have to be able to show people over time what you're about."
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