Court finds Trivago misled customers on hotel pricing

Federal Court finds travel website Trivago misled consumers about cheap hotel deals.

Trivago misled consumers on rates

A Federal Court judge has ruled that travel website Trivago misled consumers about cheap hotel deals both on its website and television advertising.

The Federal Court ruled that from at least December 2016, Trivago misled consumers by representing that its website would quickly and easily help users identify the cheapest rates available for a given hotel.

In fact, Trivago used an algorithm that placed significant weight on which online hotel booking site paid Trivago the highest cost-per-click fee in determining its website rankings and often did not highlight the cheapest rates for consumers.

“Contrary to the impression created by the relevant conduct, the Trivago website did not provide an impartial, objective and transparent price comparison service,” Federal Court justice Mark Moshinsky said.

“The fact that Trivago was being paid by the online booking sites was not made clear,” he wrote in his judgement.

The court also found Trivago’s hotel room rate comparisons that used strike-through prices or text in different colours gave consumers a false impression of savings because they often compared an offer for a standard room with an offer for a luxury room at the same hotel.

The Australian Competition and Consumer Commission (ACCC) took Trivago to court in August last year over its business practices.

“Trivago’s hotel room rate rankings were based primarily on which online hotel booking sites were willing to pay Trivago the most,” ACCC chair Rod Sims said.

Trivago’s website aggregates deals offered by online hotel booking sites (such as Expedia, Hotels.com and Booking.com) and hotel proprietors’ own websites for available rooms at a hotel and highlights one offer out of all online hotel booking sites (referred to as the ‘top position offer’). However, Trivago’s own data showed that higher-priced room rates were selected as the top position offer over alternative lower-priced offers in 66.8 per cent of listings.

“By prominently displaying a hotel offer in ‘top position’ on its website, Trivago represented that the offer was either the cheapest available offer or had some other extra feature that made it the best offer when this was often not the case,” Mr Sims said.

“We brought this case because we consider that Trivago’s conduct was particularly egregious. Many consumers may have been tricked by these price displays into thinking they were getting great discounts. In fact, Trivago wasn’t comparing apples with apples when it came to room type for these room rate comparisons.”

The court also found that, until at least 2 July 2018, Trivago misled consumers to believe that the Trivago website provided an impartial, objective and transparent price comparison for hotel room rates.

A hearing on relief, including penalties, will be held at a later date.

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    Onemore
    22nd Jan 2020
    10:40am
    Another surcharge sneaking into some hotel websites is this beauty "Tax recovery and service fees" which appears at the bottom of the bill.
    Mariner
    22nd Jan 2020
    10:59am
    Normally stay at hotels for a week or more and negotiate my own rates. Some take cash without giving receipts (the smaller ones), the larger one take cash as well and still give me a discount with a receipt, they are saving the CC fees.
    Sen.Cit.90
    22nd Jan 2020
    2:20pm
    'Dick Smith' gives good advice on this video;

    https://player.vimeo.com/video/288285200

    This is worth watching
    Tood
    22nd Jan 2020
    5:02pm
    That TV ad with the 2 women at the hotel desk is no annoying and the prices that she shows on her mobile are a sham, in reality most of the booking sites show the same price, one might be different but not to the extent shown on her mobile.
    Best to book with the hotel direct which is not always easy to find/do.
    ozirules
    23rd Jan 2020
    12:54pm
    I agree, Tood and they are still showing it after being found to misrepresent the truth. Isnt this fraudulent. How come the ad hasn't been pulled.
    Greg
    23rd Jan 2020
    1:08pm
    ozirules - because they have stopped doing it as at July 2018.

    Nothing wrong with the add, it was the hotels which they put at the top that should've been there.
    Julian
    22nd Jan 2020
    10:44am
    Shop around and you'll see that this company does not offer the best hotel price, even if you look further down their search results.
    Greg
    22nd Jan 2020
    10:53am
    Wow, I'm so surprised.....not.
    JoJozep
    22nd Jan 2020
    11:10am
    What's new? A business that advertises constantly to the point it makes me puke especially on SBS "world of movies" (Read: SBS world of advertising) has to be making its money from somewhere. Since no other business makes money than by sucking gullible people in to pay or stay at particular hotels than the advertising business, they do get desperate and it's well known the advertising industry tries all sorts of tricks.

    The government only steps in if there are enough complaints or the smell of corruption becomes too great to handle. What the Federal Court knew about this false advertising since 2016 and only now is taking action? What's the Minister in charge of justice doing? What are the goons at SBS doing about this blatant misleading advertising (not to mention just about every other TV station)?

    How many thousands if not millions of customers been duped over the past 6 years?

    Exactly three years ago, we booked an overnight stay in Sale, Victoria through Trivago. The next morning when paying the bill I noted the full normal charge was applied. I refused to pay the full bill and quoted the Trivago price (Only about $20 cheaper). They said they never heard of Trivago and had nothing to do with them. I trusted the hotel and paid the full amount. I reckoned afterwards, Trivago didn't know every hotel price in the world and looked up addresses in every town on the internet, whether they had arrangements or not. It left us with a bad taste of ever visiting Sale again so it's the regional town that misses out, not Trivago. All the advertising agencies, TV station owners, local, state and federal departments see the tourist/traveler as a golden goose, ready to be ripped off on entering the front door of a not so friendly hotel.

    Hasn't this been going on since the year 0 AD., when a little baby was born in a manger?
    Greg
    22nd Jan 2020
    1:28pm
    They are not just taking action now, the investigation started years ago, obviously you haven't heard about it before.
    Fair Dinkum
    22nd Jan 2020
    11:32am
    I looked at the rate for a motel room at campbelltown on the web did not book online but instead rang the motel and made the booking. to my disgust when I arrived at motel and went to pay the cost was about $10 more I queered this and was told that ther price on the web was online price .I said to the receptionist you make more money by me paying you on arrival than you do by paying the web people.who have to have the site listed with them.
    Rules are rules said and she could do nothing about it .Certainly won't be staying at this motel or any other of it chains.
    Onemore
    22nd Jan 2020
    11:38am
    Further to my post about the hotels new con, it went like this.
    Needing a hotel at short notice I googled the name of my favourite hotel near Souther Cross station in Melbourne, then bang up it came with the name of the hotel hi-lited in big letters, so I made the booking at the normal price that I usually pay, simple enough, not on your nelly.
    In came the reservation confirmation with the new charge tacked onto the bottom of the confirmation. So me being me and sick to death of being ripped off I did some homework and found the website that did the booking on behalf of said hotel, now remembering that all indications were that I was dealing with the hotel direct. So onto skype called their 1800 number in the states and had a chat with a consultant (it was a girl but being politically correct I cannot say that less me being labelled sexist) anyway I put forward my excuse for the booking made in error and would they cancel my booking, although it says non-refundable they agreed to cancel as long as I made another booking through them, yes sure I said minus the Tax and recovery charges to which they agreed. The management at the said hotel didn't want to know anything about it, not our problem they said.
    Last week I was on a flight to Manila with a prominent Australian carrier which also takes hotel bookings, and not sure whether the flight was going ahead I decided to do a last minute booking with them, just in case it didn't go ahead, now remembering the good deals are non-refundable no matter what the reason. So I made the booking with points and pay and bang in came the confirmation with "Tax recovery and service fees" tacked onto the bottom of the booking, although a different hotel booking site.
    I personally didn't mind the Trivago add and can understand why the young lass had so many marriage proposals
    So how do you keep the bastards honest. It is different world out there now, and what comes to mind something a friend once told me about girls in certain countries "They know you have money and it is their job in life to get it off you" Seems that applies to everything these days.
    Just saying.
    Horace Cope
    22nd Jan 2020
    11:50am
    If you Google Expedia, you may be amazed to find out how many of the the travel websites are owned or controlled by them including Trivago. These companies are all overseas and the profits are not taxed in Australia. The current government won a battle over GST which was also not being paid but is now collected so at least some of the money taken from Australian businesses is returned to the ATO.

    Years ago we booked through one of these companies and found that the accommodation where we stayed was the same price year round as we were quoted but the owner received less than he normally would because of the commission paid out. Since that time we deal directly with the owners/managers of the accommodation we use in the hope that all of our costs are received by the provider.

    There is another thing that should be highlighted and that is that if accommodation is Googled, all of the top responses are the travel companies and if you try to access the websites you are referred back to the travel company site. You need to take the extra step of Googling the name of the accommodation provider and clicking on their website to deal directly with the owner. These companies are not providing a special deal but are, in most cases, taking money from an Australian company, remitting it overseas and not paying tax. This is a double loss as the accommodation providers have a reduced income and therefore pay less tax.
    Macheke
    22nd Jan 2020
    12:03pm
    Thanks for highlighting this and hopefully Trivago will be hit with a big fine and have to check all their records and refund any loss to consumers. Ba big job in itself and will scare a few companies with dodgy advertising.
    Arvo
    22nd Jan 2020
    12:25pm
    Never used Trivago but used its parent company Expedia for online bookings in Australia...not a single problem...
    Blossom
    22nd Jan 2020
    12:39pm
    Some of the other travel sites you have to pay in advance and can't get a refund.
    disillusioned
    22nd Jan 2020
    12:56pm
    I find contacting the hotel direct is the least expensive option, rather than using online booking websites! They don't have to pay for these booking services, and often offer a reduced price as well. Plus I can't stand the smugness of the Trivago ads!
    Mariner
    23rd Jan 2020
    3:40pm
    Exactly mate, that's what we do, they want a CC number but then take the cash and in the morning upon departure they tear the slip up if you've not into the mini bar. Way to do it, disillusioned!
    inextratime
    22nd Jan 2020
    1:09pm
    We have got so fed up with seeing that dumb ad at the check in desk, it was appearing on one tv channel every ad break and sometimes twice in the break, that we decided we would never use Trivago to book a hotel room. Just as well by the sounds of it.
    SuzeB
    22nd Jan 2020
    1:30pm
    I knew they and other booking companies were doing that, so a couple of months back I booked direct in Darling Harbour online. I physically clicked on that actual hotel site. I still got caught out. The advertised rate was $254. I confirmed the booking and was whisked off to something called GetARoom (from the actual hotel site). $254 turned into $354.18. They added $99.90, which was supposedly 'tax recovery charges and service fees' in the United States, the home of GetARoom. Worse, the room was awful - tiny and shabby.
    Greg
    22nd Jan 2020
    1:41pm
    Yes because some hotels don't have their own booking facility online.
    There's a motel in Wodonga Vic like that, their website says to book through Wotif.
    Tood
    22nd Jan 2020
    5:08pm
    Probably better to speak to the hotel instead of booking on line if possible
    Onemore
    23rd Jan 2020
    1:04pm
    SuzB, Did you read my post where I got stung for the same Tax Recovery Charge? Qantas hotels are run by Expedia and do the same rort.
    Greg
    22nd Jan 2020
    1:37pm
    I use them purely for research, you'll come up with most of the hotels, make a choice and then go through the hotel direct.
    Of course check the booking company who's price comes up best, like booking.com or whatever, as there mayby a better price there then on the hotels own site. This is more likely with the large establishments, they set aside a few rooms on each booking service at very special rates which they won't or can't do direct.
    Sen.Cit.90
    22nd Jan 2020
    2:16pm
    Log onto this address; Dick Smith explains it all.
    This is worth watching
    https://player.vimeo.com/video/288285200
    Dorliz
    22nd Jan 2020
    2:28pm
    We always phone the accommodation direct as we tried Trivargo once and they told us there were no rooms available in a town we were going through, when we got there every premises had vacancies - we figure it was because these places had not deal with Trivago, looks like we were right. Advice, look up hotels and motels in the towns you want to go through and make your own choice.
    TinTin
    22nd Jan 2020
    4:09pm
    I watch SBS movies quite a lot in the evenings, consequently, I'm sick of Travago ads to the point that I will never use them. Now we hear that their ads are untrue, hopefully, SBS will drop their ads completely...fingers crossed. I'm also sick to death of seeing that dumb ad for Crowies Paints, again I will never buy Crowies Paint because of their stupid ad and the saturation. Wake up advertisers, you are losing customers.
    Tood
    22nd Jan 2020
    5:12pm
    I totally agree about the ad being shown ad nauseum I turn the sound off. Sent Trivago an email, they were interested to hear but have done nothing to get rid of the ad. This ad is closely followed by the one for Carpet Court also played to death.
    They are so annoying and stupidly dont realise that just for that reason I would never use their services.
    Thoughtful
    22nd Jan 2020
    11:18pm
    Many years ago I noticed the standard of room I received was lower when booked through a "booking site". I stopped using them and was "conned" by another site offering extra discounts for the number of reviews.

    Once I had to organise accommodation for family at short notice. I rang an establishment direct to book one lot of accommodation. Another party booked the same establishment through a booking site which said "only 3 rooms available for your dates." You guessed it - the party I booked for had a far superior room for the same price!

    I have stayed at 2 privately run small establishments with excellent service which I booked through a booking site. ( This is easier when needing accommodation at short notice and for comparisons and this is what they work on. ) Both were on the booking site as "only one remaining room" yet this was not the case when I arrived. They explained to me about the whole process with booking sites and said that is why they only give a limited number to the site. As I was a trouble-free traveler, both said to ring and book direct next time, say that I had stayed before and was told by management to book that way and they would give me a discount of 20% on their advertised rate.
    Greg
    22nd Jan 2020
    11:39pm
    Most places only release a number of rooms on the booking sites, one reason being they can get overbooked with the way the systems work. If multiple people booked on different sites at the same time and all rooms are on the sites overbooking can happen easily.

    Regarding room quality - I've spent ten years on the road for work, 45 weeks per year, stayed in over 750 different establishments and many of them multiple times. During those years I used Wotif and Booking.com extensively as well as going direct through hotel sites and phoning them direct. I never came across a pattern of worse rooms when booking on with the booking agencies, in fact there were numerous times when you roll up to the place and they upgrade you to a better room because the booked room hadn't been allocated yet and the paid for room was now occupied.
    Hairy
    24th Jan 2020
    7:52am
    The way the airline booking sites are manipulated needs looking at as well.the more you try to compare the higher the price gets ,I have stopped using middle man sites I go straight to the home site of airline.
    Onemore
    24th Jan 2020
    10:17am
    Hairy, it has been suggested to me that I use "Duck Duck go" as your search engine where the sites you visit are encrypted or some other method to disguise what sites you have been, or a good VPN server, it has worked for me.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles