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More service, less marketing: the truth behind a hotel best price guarantee

Getting the best price for your selected hotel is the aim of everyone who goes online to book accommodation. Who wants to pay more for the same hotel room? Nobody! But wait a minute…

You’ve probably already seen on several hotel booking websites the big list of advantages they offer to their customers. If you go through that list chances are you will find in bold, with a green tick beside it, the good old “best price guarantee”. So why I am spending my time shopping around and comparing prices, when every hotel booking website promises the best price? Can I blindly trust it, or is that just another marketing trick?

Well, I would say that it’s more like insurance: not a bad thing to have but you’d better read the fine print if you really want to get something out of it. But don’t worry, you don’t need to waste your time doing that… I did the reading for you and I’m going to give you some tips in this post about how to use it, when to use it, and also give you a smarter way to make sure you get the best price for your hotel.

To start off: all hotel booking websites besides one (this secret tip comes later in the post) expect you to do the searching yourself. So you actively need to go around the web even after you booked your hotel room and compare prices… But, even if you have enough time to do that (who has?), you should pay close attention to the conditions in which the best price guarantee applies. Whenever you find a cheaper rate, check first if these conditions are met before requesting a refund:

  • make sure the room is from the same category (if you booked deluxe and find a cheaper rate for a standard room, they won’t refund you)
  • check if the room you originally booked is fully refundable (if not, you will most of the time get no refund, no matter what)
  • take a look to see whether the breakfast is included. If you booked a rate with breakfast and find a cheaper one without, no refund here either
  • make sure the new rate is not part of a package
  • most importantly, check for how long after the original booking the best price guarantee is valid.

 

The last point is really important. Most hotel booking websites give you a deadline to find a better price for your booked room. After that, the best price guarantee is void. Here’s a short summary of the deadline of some big providers:

  • HRS: 24 hours after booking
  • Booking.com: they just say “immediately after booking”, so anything over 48 hours should be hard to get
  • Hotel.de: no clue… they have a big “Best price guarantee” on their website but no info about how to claim, terms & conditions and so on. That’s a bit of an empty promise.
  • Ebookers: 48 hours after booking and 72 hours before check-in.
  • Expedia: this is a good one; their best price guarantee goes until 48 hours before check-in
  • Hotel.com: the same deadline as Expedia.

 

It looks like hard work! Comparing rates, room types, amenities, cancellation policy, deadlines and so on is anything but trivial. So, here’s my tip for you… invest your time and energy doing something else and leave this complex comparison work for the machines. Yes, machines: they can do that for you.

At tripRebel we’ve developed an algorithm that understands all aspects of the hotel rate you booked and will check automatically for better rates for your hotel room… and we don’t do that only once, but every day from the day you book until you the day you check-in. We also compare the other big websites, so you don’t need to bother doing that either. Whenever a better rate is found (which happens in about 1/3 of bookings), you get an automatic refund to your credit card, no conditions, no forms, nothing! Money in the bank, period. That’s our special service for you, a kind of automatic best price guarantee.

So our motto of the day is more service, less marketing. If you agree, please share this post and happy saving…

Behind the lens: Emuishere Peliculas

plane

Say goodbye to Economy/Business/1st class… say hello to chaos

Customisation, the new buzzword when it comes to the creation of products and services, has reached the travel/flight industry. The outcome: a whole bunch of new service classes. Instead of choosing between the three classical ticket segments, economy, business or first class, consumers are confronted with an overwhelming variety of new offerings and service packages. So instead of booking a simple economy ticket you get to choose between Classic or Flexible (IBERIA), Mini, Classic or Premium Economy (Air France), Economy Saver, Economy Basic or Economy Flex (Lufthansa), JustFly, Fly Deal, FlyClassic or FlyFlex (Airberlin) … There seems to be no limit to the airlines’ imagination.

 

However, this increase in choice possibilities has brought about a lot of confusion and insecurity. When you purchased a regular economy class ticket you used to know more or less which services would be included. Of course you had to check the differences between the different airlines, but you had a rough idea of what you were paying for and which benefits you could expect to be included. Splitting up the traditional service classes has meant the amount of services comprised by the different service levels is far more inconsistent among the different airlines. Just because two airlines choose to name one of their economy tariffs “Basic” it doesn’t mean that both offerings entail the same benefits. And since each new sub-class comes with its own price, the complexity of price structures has also exploded. The result: more service classes, more choice, more prices – more confusion, less comparability and less transparency.

 

But apparently this is not the end of the story. Imagine you decide to go for the lowest service class because at first sight it is the most economic choice. A good deal? Only if you have the most basic needs and requirements. Better make sure every single service you will need during your flight is already included in your chosen package. Because if it’s not, most airlines will surprise you with a fee for every minimal add-on benefit you might ask for. Need to check in a bag? Ah, sorry, not included in the Air France Mini Economy class. Want to rebook your flight? Then hope you haven’t gone for Lufthansa’s Economy Saver class. Got sick and can’t start your trip? Too bad, IBERIA won’t reimburse you if you’ve booked the Classic Economy tariff.

 

And since the fees each airline charges for different service features vary again, cost comparison gets even more difficult. Getting a deal that really suits your needs becomes almost impossible. Either you go for the cheapest option – and prepare to pay for every unpredictable incident that might occur – or you chose the “safe way”, opt for a more complete service class – and end up paying for services you don’t need.

 

According to the airline companies, consumers get to pick the services they value the most and pass on those they don’t care about. As a result they get the service that best adapts to their needs. But as Mitch Lipka points out in his article (http://huff.to/1aITekF): in order to get a fair deal, consumers have to do the maths, and compare fees that might be charged extra with a higher service class – both within the same airline and between competitors. Luckily, there are some smart websites such as kayak.com, travelnerd.com and smartertravel.com, that help you calculate the fees you could be charged and whether it might be smarter to go for a higher service class.

 

The original idea of customisation is to involve consumers in the process of creating a product or a service. In the case of air travel this would mean giving them a say in designing and planning the details of their journey. But how are consumers supposed to take this active role if they are charged for every adaption they need? Most airlines have unbundled their offering and present as their lowest service class a completely stripped-down service, reduced to the absolute minimum. Every extra requirement, every add-on service is a possible fee: baggage, seating, comfort, entertainment – only the sky is the limit. Lufthansa is planning to introduce a fee for seat reservation for their Economy class (http://bit.ly/1fBTtk3); in the US some airlines even charge their passengers for using the compartments for their hand luggage (http://bit.ly/16dtj7l), and the initiative about raising a fee for overweight passengers has been widely discussed.

 

Charging fees for additional services is nothing new – it’s always been like that. Enjoying supplementary benefits or a more sophisticated treatment has its price; that’s not the problem. But the fragmentation of a once clearly-defined and precisely priced service package is merely a further step in the never-ending quest: how to squeeze the maximum amount of money out of passengers without offering any additional value. So if you plan to book a flight you’d better take your time and have your calculator within reach! Otherwise your chances of obtaining a satisfactory deal are rather cloudy.

Photo by: David Graham

Myth debunked – booking early does not necessarily save you money on hotels.

Today I did a test: I searched “how to save on hotels” on Google and read almost all the relevant blog posts. I would say 90% of them recommended the reader to book early to save on hotels. In this post I will explain to you why this is only halfway true, and how you can make sure that the booking-early strategy always works in your favour.

 

It is widely known that hotel prices change frequently based on the rules of supply and demand. What is not so widely known is how and when hotels use these rules to set and change their room prices. Here is a simplistic view of how it works:

 

Hotels have what is called a rack rate. The rack rate is the full, published room rate and does not contain any discounts… it’s the “regular” rate, if you will. From this rate, hotels will apply any sort of discounts they feel like; for example, for nights with low demand, last-minute offers, frequent customers, long stays and so on. Hotels also charge above their rack rates, for example when a big event is taking place in town.

 

As you can see, everything starts from the rack rate. The decision about when to apply rate changes is always dependent on how far ahead a hotel can gauge the demand for a certain night in the future.

 

In a few cases hotels know, even before the first booking is made, if a certain night will be in high or low demand (event in town, public holiday, school holiday and so on.). However, in most cases they need to wait much longer until a reasonable amount of booking activity takes place to predict demand and therefore change prices… and here is the catch!

 

If you book too early, chances are that you are paying near to the rack rate. From this point in time there is a 50/50 chance of prices going up… if hotels themselves can’t predict yet, neither can you. So you are at a crossroads: wait and risk booking at a higher rate later, or book now and risk paying more than everybody else.

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So what should you do? First of all, figuring out as an outsider if it is too early or not to book is nothing more than guesswork. The only strategy that can consistently fight this problem is booking a fully refundable rate early enough and constantly checking for price reductions before check-in. If a better rate becomes available, you cancel the old and book the new.

 

Sounds like hard work? The good news is that this constant checking can now be done automatically for you. After you book your hotel at trip|REBEL, our algorithm will search for price reductions on your booked hotel room every single day. As soon as your hotel price drops, we automatically change your booking and you get a 100% refund of the difference to your credit card.

 

So without having to move a finger you can make sure that in every case the early bird catches the worm.

 

 

The good, the bad and the ugly – dirty price tricks by airlines

When you book your flights online you should be very careful selecting the airline you deal with, in order to make sure you are getting the price information you need (and are entitled to according to EU legislation) to make your purchase decision. To put it very clearly, in our perspective there are three types of sites you come across on the Internet:

1) The good: are playing fair

2) The bad: are kind of bending the rules

3) The ugly: are being really dodgy

 

EU legislation clearly specifies that for all flights departing from EU airports, the final price to be paid should be indicated at all times:

 

FINAL PRICE = air fare + taxes + charges, surcharges and fees which are unavoidable and foreseeable.

First of all, what about showing the final price all the time? We came across websites showing big, bold prices in the middle of the page, like 139,99€ for the outbound flight, and 177,98€ for the inbound flight. But hiding in the right-hand corner is a 5€ “management fee” they just figured out they needed. Come on! Why on earth don’t they just add 2,50€ to the price of each flight?We’re quite sure their IT guys can do the job.

 

Now let’s take a closer look at the third element, “charges, surcharges and fees which are unavoidable and foreseeable”. Well, if I am booking a return flight from London to Lanzarote for a two-week stay, everyone agrees that a single 50 x 40 x 20cm cabin bag won’t do the job… nevertheless it is quite common to pay an extra 40€ for a 20kg checked bag.

 

Furthermore, EU legislation states that optional price supplements should be communicated in a clear, transparent and unambiguous way at the start of the booking process. Here again it’s incredibly common to find out how much you need to pay for those 20kg, or for your credit card payment, only two or three clicks deeper into the booking process. Lawyers might disagree, but that looks kind of dodgy to us.

 

To make your life easier, we’ve created the following “price trap” table with some of the biggest airlines in Europe. It is made based on our own judgment and research, but with a clear set of criteria… no bending the rules here:

 

Optimized-table

 

Now it is up to you. You can complain (UK / DE / AT), boycott, spend your time thoroughly comparing fees, or pay more without noticing. Please fasten your seatbelts.

 

Rebels with a Cause blog

We are rebels with a cause…

We keep reading everywhere how much consumers profit from the Internet revolution. It provides an unprecedented amount of information, empowering consumers to make informed purchase decisions by deeply enhancing choice and strengthening price transparency. Today, just one single click can lead to an effortless real-time price comparison between various products from hundreds of different providers… something unprecedented back in the 90s.

 

Well, that’s true, but it is only PART OF THE STORY! We’re here to tell you the other part…

 

There’s a battle going on deep inside the world’s biggest marketplace. As you can imagine, not everyone is comfortable with so much transparency and feels somehow nostalgic about the good old days when information (read: power) was in the hands of a few. Not being able to roll back the development achieved by the Internet, they follow the motto: “If you can’t change the system, you should trick the system”. And that’s exactly what they are doing.

 

Here is a recipe:

  • take your main product.
  • peel off all the added features your product used to have included in its price.
  • put them in a bowl and stir it for a while. Now take every added feature out and attach a small price tag to it.
  • if you like extra spicy, follow the same procedure with things like shipping, payment forms, payment terms, packaging, etc…
  • now go back to your stripped-down main product. Bake an algorithm that randomly changes prices every day of the year, based on Saturn’s relative position to the Earth’s magnetic North Pole.
  • if you run out of excuses for changing prices every day, here’s an alternative ingredient: release “new products” on a weekly basis which are basically the same but are called differently and therefore priced differently.
  • voilà! Serve boiling hot.

 

Sad but true: comparing offers for high-volume products on the Internet looks more like “mission impossible”. And stay tuned, because sooner or later this trend will affect niche products too.

 

Exaggeration? Well, do a test and see for yourself: try to find the current absolute best deal in the market for extra light running shoes, four-star hotels in Paris, 16MB Internet connections, economy class flights from Hamburg to Munich… kiss your kids goodnight and lock yourself in the office for the next… well… four days!

 

Yes, we know the argument: “We are just customising our products to the individual tastes and needs of our consumers.” OK sir, here’s a Medal of Honour for that. Bullshit! Or even better: “We are just leveraging the consumer’s willingness to pay.” This one comes close to plain robbery. We’re not stupid; we can differentiate between customer-centric approaches and salami tactics.

 

Don’t get us wrong! We’re not saying that all products on earth should be sold as cheaply as possible… no, that’s way off the mark. The point is that consumers should be given a fair chance to properly evaluate a product’s benefits and its respective price… without tricks and surprises. We believe that’s a cause worth fighting for.

 

Here’s our small contribution to this cause: a blog and an algorithm.

 

The blog:

  • preaches the importance of keeping the Internet a transparent marketplace (for the sake of consumers and business folk alike)
  • praises best-practices from honest companies and start-ups out there
  • throws some tomatoes at companies trying to cheat you
  • hopefully finds some people who agree with us and want to join the rebellion.

 

The algorithm:

  • gives consumers extra tools to fight the notoriously obscure pricing tactics of the travel industry
  • starts with hotels

 

Full disclosure: Yes, we are the guys behind trip|REBEL. Yes, we earn commission from hotel bookings made on our website.

 

Follow us, write us, scream at us, kiss us but don’t ignore us… and most importantly; keep rebelling!