US-owned online travel website Expedia has allegedly “declared war on travel booking fees”. The $US6 billion giant last week announced an expensive campaign to “throw down the gauntlet with local competitors who continue to charge their customers booking fees”.
Expedia even went to the trouble of getting Sweeney Research to poll Australians on the topic. Unsurprisingly, almost 75% agreed that they didn’t want to be charged fees. Clearly, Expedia didn’t devise the questions especially well if a quarter of respondents were apparently happy to pay higher fees.
Fortunately for Australian travellers, they have a good friend in Expedia — with the company’s Seattle-basepresident, Scott Durchslag, telling Lisa Allen of the Financial Review that he was “shocked that Australians aren’t up in arms about this”. Durchslag then kindly pointed out that Expedia’s major competitor, Webjet, “are charging up to $50 — $20 of that is a seat guarantee fee. What the hell is a seat guarantee fee? If I were any Australian consumer, that would just make me mad.”
Durchslag then made the comparison between travel fees and bank fees, noting the “movement towards no fees”. Durchslag neglected to mention the differences between bank fees and travel fees. For one, companies such as Webjet exist through charging fees, Webjet isn’t a charity run for the benefit of Australians looking for a Thailand beach holiday. Further, Webjet’s fees are very clearly stated tat the time of purchase — if a customer isn’t happy with them, they can book through a travel agent, or the airline or hotel directly.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Presumably, companies such as Webjet or Wotif are able to charge fees because (a) their products are cheaper than people could get elsewhere; or (b) it is more convenient using an aggregator site even if the booking fee applies. By contrast, banks charge penalty fees to customers without properly disclosing them, and while making billions on an interest rate margin.
What is more relevant than a relatively minor booking fee is the ability for customers to take legal action in the event that something goes wrong. It is in this regard where customers would be well advised to steer clear of Expedia, even if they can save a few dollars on a booking fee. As Crikey readers would recall, Expedia spent upwards of $5000 defending a legal action brought by this writer in 2010.
Expedia, the self-professed champion of Australian consumers, chose not to pay a claim of a few hundred dollars after committing a booking error — instead, the US-giant spent thousands of dollars on legal fees to argue that as an American company, it should be beyond the reach of Australian claimants. This was despite Expedia having an Australian domain name that was owned by an Australian company.
Expedia’s high-priced legal team was successful in having the claims rejected on that technicality before the tribunal were even able to hear about their errors. The upshot of all this is that any Australian who makes a booking with Expedia has virtually no legal recourse should Expedia completely bungle their experience.
So next time you’re making a travel booking — don’t just consider the $5 booking fee, it might ending up costing you a whole lot more.