They showed her the net rate and now she wants it

Eleanore Brouhard knows a secret.

When she checked out of her hotel, it revealed the “net” rate it was charging her online travel agency — a number far lower than the one she was quoted. Now she wants the hotel to honor the lower price for her.

I get requests like hers with some regularity, and I normally tell them they’re out of luck. If you bought hotel rooms in large blocks, you might qualify for a low rate, but not as a single traveler. But lately, I’ve had second thoughts about that response, and I’m thinking of mediating one of these cases. Maybe you can help me figure this out.

Back to Brouhard’s case: She found a room at the Wyndham Dallas Suites – Park Central for the nights of Oct. 11 through 14 via a link on the AARP site. The transaction was handled through Expedia.

“When I checked out I was given an itemized receipt for $329, which was lower than Expedia had quoted,” she says.

When she asked about the lower rate, a representative assured her that was the correct price. It’s hard to imagine anyone arguing about a lower price on a room, so it must have been a brief conversation.

But it wasn’t quite right.

When my Visa bill arrived, I was charged a total of $416 for the three nights, a difference of $86.

I called Expedia and was told the hotel made a mistake giving me the receipt and that this was the “net rate,” which I never should have seen.

Well, I did see it and it says nothing about net rates. I asked for a refund and a supervisor offered me a $50 Expedia coupon, which I declined because I will not be doing further business with Expedia.

I would like a refund of the difference and also I feel that people should be warned that such a thing can happen. AARP offers this link as a means for senior citizens to get good travel rates and I feel that this did not happen here.

Hmm. Didn’t Brouhard agree to the $416 rate? Wasn’t that “good” enough for her at the time?

Fact is, many businesses have wholesale and retail rates, and it’s generally understood that the way they make money is by marking up the product. Expedia bought thousands of rooms from Wyndham, and then resold them to guests like Brouhard to make a profit.

Still, the hotel gave her a folio with a lower number, and when she asked about the rate, a representative told her it was correct. Shouldn’t a business be required to honor a price it quotes?

From my perspective, Brouhard’s motives matter. Had she found out about the Wyndham rate error on FlyerTalk or via one of the Boarding Area blogs, and booked a few rooms for her and her friends, knowing full well that this was a rate error, I would have sent her my polite form rejection letter. (Booking a “fat-finger” fare when you know better is stealing — no two ways about it.)

But Brouhard found the rate through AARP, and she probably assumed the association had negotiated an even more aggressive discount on her behalf when she saw the final hotel rate. And a hotel representative verified the rate, too, when she checked out.

I’m thinking about asking Wyndham and Expedia to consider honoring the lower price.

Should I mediate Eleanore Brouhard's case with Expedia?

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  • TonyA_says

    Cherity, how do you add a markup to a hotel rate? I thought travel agents only make a percentage or fixed commission from a given hotel rate. Can you simply add an extra amount the guest will pay at checkout? I am confused.

  • bodega3

    Tony, you can have a contracted rate with any hotel. Our agency has contracted net rates with scores of hotels. If we sell them, we charge the client in house, so we are the vendor. We also have contracts with some hotels for special discounts and commissions. Those we pass the credit card to the hotel and the hotel pays us.

  • http://flyicarusfly.com/ Fly, Icarus, Fly

    Yes, but what leads you to believe that the Expedia rate wasn’t the “best / cheapest rate” available to her? (ie. the net price is off the table, because that rate isn’t available to the general public)

  • TonyA_says

    None are published rates, correct? Essentially your contracted rate is similar to Expedia’s MERCHANT NET RATE CONTRACT which means you collect from your customer.
    What I have yet to see is a situation where I get a NET rate, I add a mark-up, and the hotel collects the total at checkout and pays me my markup like he does my commission. Some airlines do it for their bulk fares.

  • http://flyicarusfly.com/ Fly, Icarus, Fly

    But are you expecting too much from AARP? They use their clout as a big organization to negotiate bulk discounts. I don’t think they bill themselves as being able to get the best possible price at every property. As in this case, the hotel had an internal promotion – how can AARP (or anyone, for that matter) keep track of all those in real time? If anyone knows of such a place, please clue me in! As far as my experience goes, you just have to do the legwork yourself, no?

  • http://www.facebook.com/franklin.shaffer.3 Franklin Shaffer

    I am an AARP member for the past 15-yrs. Several years ago, I needed to purchase homeowners insurance for a manufactured home (only a few companies offer it). I saw an ad in the AARP mag offering the insurance at “a member discounted price”. I called the number and got a quote, which I thought was high. (it was a special number for AARP members only). I then decided to call the company direct and got a quote for a lot less!!?? The difference in quotes was what AARP was making as an “endorsement” fee, or their mark-up. Not, as you say, really helping their members save.

  • http://flyicarusfly.com/ Fly, Icarus, Fly

    But not all feelings are valid…

  • TonyA_says

    Because she paid more than 400 bucks which is about 15% off BAR.
    That is the standard AARP discount.
    I need to make one thing clear – most hotels practice RATE PARITY.
    Simply stated, each room type will be offered to the general public for the same price. But opaque deals, club prices, and free nights might not be included in rate parity . So theoretically she will get the same rate regardless of channel. However, the trick around rate parity is to get something free from the hotel so they wont violate rate parity.That is why I have been eyeing the Stay 2 and get 20; or Stay 3 and get 30 deals. Those deals ard most probably not covered by rate parity.

  • TonyA_says

    She is. Didn’t she think [incorrectly] AARP surprised her with a lower rate when she checked out? But really, how difficult is it for AARP to note that Wyndhams have Stay 3 Save 30% or similar deals and tell members to check first since this is higher than the standard 15% AARP hotel discount?

  • bodega3

    Technically our discounted rates are published/rack then reduced in price to us when we call.

  • TonyA_says

    As i said, her feelings are misdirected. She really has no contest against Expedia because it did not do anything wrong. But now that she knows that hotels gives Expedia a huge discount, she should be looking at AARP to negotiate bigger discounts for its large member base.

  • TonyA_says

    One explanation is she thinks AARP is big enough to negotiate the same rate that Expedia gets
    Wrong assumption though. Seems like AARP was more interested in its own cut from Expedia as Expedia did not offer her substantially cheaper rates.

  • bodega3

    Tony, you know that vendors give discounts on some rates, not all rates and they vary from vendor to vendor. AARP may have had a special with the vendor on that particular rate and it isn’t their job to show all rates that don’t benefit them.

  • agentsteve

    Mediate? Absolutely not! It doesn’t matter one iota, that she saw the net cost, as it’s totally irrelevant to her contract. It’s almost unfathomable, to believe that people feel that they have the right, to transact everything at cost. Or is this to be a new “entitement”?

  • Pkipnis

    If you accidently see the net price after agreeing to a price, then tough luck. In my business I get jerks demanding the internet price after they’ve agreed to my price and accepted delivery. Same deal. You agreed to a price and that’s that.

  • TonyA_says

    The point I am trying to make is AARP travel center is ESSENTIALLY EXPEDIA!
    Anyone over 50 should not fool themselves believing that an OTA will be their best option.
    Here is an example http://aarp.pissedconsumer.com/the-aarp-travel-center-cheated-seniors-20100815194090.html

  • Sally Watkins, CTC

    She was the beneficiary of a mistake-and the hotel and Expedia should honor the mistaken pice and absorb the $86. Every seller has net and gross prices. If a grocery store somehow charges a customer its net price on an item, the manager doesn’t come to customer’s house the next day asking for the difference. Her beef isn’t with AARP. It’s with Expedia and Wyndham to work out who absorbs the $86 that’s removed from her card.

  • TonyA_says

    Now that I know that AARP Travel Center is actually Expedia [they are one and the same] and she put her faith on AARP Travel Center, then I changed my mind and am also siding with the OP just like Sally.

    Just like the OP said – she thought that AARP found her a better rate while she was staying at the hotel. It’s not her fault she could not distinguish between AARP and Expedia because in her case they were the same.

    But unlike Sally, I am blaming AARP and Expedia and leaving Wyndham out of it. I assume the hotel is getting very little from Expedia in the first place.

  • David UK 99

    She has no contract with the hotel – only with Expedia. How much Expedia pays as a wholesaler is irrelevant.

    .

  • http://www.facebook.com/linda.bator Linda Bator

    Why not? Perhaps both Expedia AND AARP get 10% each! The point is – she was quoted and paid a fare. End of story.

  • http://www.facebook.com/linda.bator Linda Bator

    Why not? Perhaps both Expedia AND AARP get 10% each! The point is – she was quoted and paid a fare. End of story.

  • http://www.facebook.com/linda.bator Linda Bator

    Thank you.

  • TonyA_says

    Why end of story is hotel gave her a different receipt?
    It is really convenient to brush her off, right. But that is not how consumer advocacy works. Besides she thought AARP (travel center) was on HER SIDE.

  • http://www.facebook.com/linda.bator Linda Bator

    But she had PREPAID the agreed rate – NO ONE asked for more money after the fact – she just wanted the net rate after checkout.

  • http://www.facebook.com/linda.bator Linda Bator

    BULL! The cruise line NEVER gives the client the net rate – they give them the SAME RATES the travel agent gets (and in a lot of cases, agents get LOWER rates). They pay the travel agent a commission based on that rate, or pocket it if booked in-house. I have clients book a rate over the weekend and turn over to me to handle details all the time – and in most cases, I can get them a lower fare, or amenities.

  • http://www.facebook.com/linda.bator Linda Bator

    See above – NO direct bookings do NOT get net rates – and yes, we can charge a SERVICE fee, but cannot claim it is higher than what they get from the cruise lines. And now cruise lines are cracking down on rebating, so there is a far more level playing field. :)

  • http://www.facebook.com/linda.bator Linda Bator

    You can merely charge a service fee (you would run as an MCO)

  • TonyA_says

    Mike, BTW this is CENTRAL to the issue.
    How can anyone trust Expedia to run a non-profit’s Travel Center?
    Maybe they are for profit.

  • pcpeeps

    First, never trust AARP. 2nd she agreed to the price. Its like saying she wants to buy a new car at the ACTUAL dealer cost because she saw the invoice. The deal was made, move on.

  • TonyA_says

    Dear Chris Elliott,
    In my opinion, you should mediate this with AARP.
    It seems to me they are NOT DOING a good job for seniors.
    Passing on their responsibility to Expedia and getting a cut (kickback) from it is DISINGENUOUS for an institution that is supposed to come to the aid of older Americans.

  • JenniferFinger

    Well, if she shouldn’t have seen the net price, it sounds like that’s Expedia’s fault or the hotel’s fault-but not hers. So the price she should have seen was the price she was actually charged. I think it’s hard to get customers to pay higher rates for things that they were originally charged a lower price for and then told that the lower price was a “mistake” and now they have to pay more, because the lack of transparency, correctness, or whatever gives them the wrong rate rightfully pisses them off. I don’t disagree with the concept of tiered rates, but I do think that the customer has to be told the right rate from the beginning of the transaction if you want to hold them to that rate.

  • AgentSteve

    What is she the beneficiary of and what is the mistake? She has no beef with anyone and no vendor should absorb the $86. If you ran a business and a customer found out how much you paid for a product or service, are they “entitled” to your cost? You can search the internet for “dealer cost”; but that doesn’t mean that’s what the dealer will negotiate to. If I sold my travel products at the price that the vendor charges me, I not only would be working for nothing; I’d be working at a negative loss.

  • y_p_w

    Nothing reported indicates that it was prepaid.

    When I’ve checked out of a hotel where I prepaid, the original price I paid was nowhere to be seen on the invoice. All I saw were incidentals like meals and parking. In my experience, the AAA and AARP rates can typically be cancelled, although this may have been different.

    However, I have had issues where the freebies were odd. I booked one room via PL because it said that parking would be free. I printed it out (printed to PDF and saved it). I called the hotel and they couldn’t see free parking. I went ahead anyways and I checked my PL reservation again. The bit that said free parking was no longer indicated. I tried anyways at the desk. The clerk went back, said she was going to talk to her manager, and I got free parking. I don’t know how they worked out this with PL, but at least I didn’t have to argue with anyone.

  • TonyA_says

    That was my first reaction. The supplier’s cost was none of her business and she agreed with the $416 already. This would be the case if she simply went on Expedia’s site and bought from there …

    But as I re-read the article again and again and went to the AARP site, I realized that someone could easily be deceived into thinking that they are buying from a hotel with a great AARP senior rate but in reality they are brought to Expedia and given “Expedia’s” rate. In other words, AARP has simply handed over their members to Expedia.

    BECAUSE SHE BOUGHT FROM THE AARP WEBSITE, she thought AARP got her a better rate while she was staying in the hotel.

  • Cherity

    Sorry for the late reply, but I have issues viewing the comments from certain web browsers. For starters, I don’t use GDS. So, it depends on the method of booking when marking up a rate. My sales are 90% wholesale, and I have the options to both mark up and add a service fee. However, I don’t do both in the same transaction. I hardly ever book directly on the hotel’s website, but we do have negotiated rates with many hotels. How I earn commission can be by either: (a) fixed percentage of the sale; or (b) a percetage based on what I sell, meaning that I have the potential to earn more for selling up. As far as cruises, we can add a service fee. You are correct, the net rate is not published because again, if booking directly with the supplier they get the gross rate. I’ll keep this short and stick with the issue at hand (too much information to get into), but published rates and net rates are not the same. Net rate comes into play when a travel agency closes the sale.

  • TonyA_says

    Thanks for your explanation. For your hotel customers, do they pay you and you pay the hotel -OR- do they pay the hotel when they checkout.

  • Cherity

    That depends. Some rates (obviously the cheapest) are prepaid rates, so we would take the payment. Then, there are specials where you can get a discounted rate and pay at checkout. In that case, the hotel would pay us our commission and keep the “net” rate for the room. It’s just like going to Priceline’s website and booking a hotel. Some rates will show that the lowest rate is a prepaid rate and needs to be paid in full now, while others may say pay at checkout.

  • Lucy M.

    That was probably the cheapest rate she could have purchased the room at. Just because there was a lower net rate for Expedia or other agencies doesn’t mean anyone offered it at cost.

  • Lucy M.

    Completely agree! Probably the cheapest rate available. Everyone should have been happy. Hotel, Expedia and the OP.

  • Marcin Jeske

    The key is to decide when the beginning of the transaction was, at what point the customer agreed on a price, and who actually sold the customer the room.

    In my opinion, the beginning of the transaction was when she made the reservation on Expedia. She agreed to the price at that point, by making the reservation. Further, Expedia, not the hotel, was the party selling the room.

    She was originally (and finally) quoted and charged the (higher) Expedia price. This idea that in between agreeing to a price and using the hotel, someone (AARP or Expedia) had spontaneously negotiated a better rate is a bit strange… the only thing close to that I have seen is when a hotel automatically provides a discount due to an unexpected issue at the hotel (power loss, no hot water).

    In short, I think there is nothing to mediate. She agreed to a price (probably a decent one) and got that price. Although I too have had the hotel accidentally reveal the wholesale prices of rooms I booked on Expedia, I never was bothered by it… if Expedia was not already offering me the best deal (both on price and convenience) I could find, I would have gone elsewhere.

    This does remind me though of a common hotel practice, where they quote you the room rate pre-tax, so that the 10 (or whatever) percent taxes added later are a surprise. I always make sure to ask what the final amount will be with tax. Same goes for the evil Resort Fees that are mostly confined to Las Vegas, as well as other unexpected “gotcha” fees like energy surcharges, wifi fees, parking fees outside of downtown areas, safe fees, extra person charges, etc. In all cases, I am a fan of full-disclosure ahead of time.

  • JenniferFinger

    As I said, I don’t have a problem with tiered rates. What I do have a problem with is Expedia saying, “Oh, sorry, you weren’t supposed to see that rate.” If she wasn’t supposed to see it, it shouldn’t have shown up anywhere she could see it, regardless of what the actual bill was that she was required to pay. So that makes it Expedia’s mistake.

    Strictly speaking, yes, they aren’t required to do anything for her, and strictly speaking, no, she doesn’t deserve a lower rate just because she saw it. But someone, not her, made it possible for her to see a lower rate and misled her to believe that she might actually be entitled to it. So, even if this is not a case for mediation, it is a case where Expedia and the hotel need to check their systems to ensure that customers who are not entitled to lower rates or “net rates” can’t see them. Maybe one of them should agree to pay up by way of admitting its procedural mistake-even if she doesn’t deserve it.

  • Cherity

    I thought I explained this already? No, she did not see a “lower” rate. What she saw was the amount owed to the hotel by Expedia. The remaining amount ($87) was Expedia’s commission. The clerk made an error by printing the hotel’s receipt instead of the customer’s receipt. When you use a travel agency to book travel, they earn a commission; thus, what is owed to the supplier is the “net” rate after commission has been paid to the travel agency. Lower rates and net rates are not one and the same. They are completely different rates, and net rates only come into play when a travel agency closes the sale.

  • JenniferFinger

    First of all, if you did “explain” it, you were not replaying to me, and second, regardless of the difference between “net” and “lower” rates, if a clerk’s error misled a customer to believe that a rate that was not as high as what she was being charged was available, telling a customer, “Oops, sorry, you can’t have it because you weren’t supposed to see it” doesn’t come off as good customer service. The rate she was actually charged was the only rate she should have been able to see.

  • Cherity

    First of all, I don’t know who you “think” you are talking to, but I suggest you watch your tone. I am not a child, nor do I take being spoken to in this disrespectful manner lightly. I don’t care if you are a moderator, don’t get me started!
    I can tell by your response that you clearly don’t get it. No one was misled. Regardless of what she saw, that was the hotel’s earnings PERIOD. AGAIN, net rate is what the supplier takes in AFTER commissions has been paid. She is NOT entitled to Expedia’s pay check just because she “saw” it. How ridiculous is that? This entire argument makes no sense!

  • http://www.facebook.com/people/Darrell-Mount/1466121227 Darrell Mount

    As a former front desk employee, I ran across this problem ALOT. Our policy is too check the rate code, and that determines if we can tell the guest the rate. If booked through a “travelocity” or “hotels.com” site, we are to inform the guest they will get a receipt from the site which sold them the rate. A couple of times someone at the front desk messed up and gave the guest the cheaper receipt, we had to refer them to hotel mgmt to have their questions answered. If they booked and rate went lower, if they could prove it at check in, then rate would be adjusted, as long as a 3rd party not involved.

  • http://www.facebook.com/BarryMichaelGraham Barry Graham

    The hotel is entitled to charge the agent less than the agent charges the customer. That’s how they both stay in business. It’s called “Selling”.

  • Susan

    You will lose for sure, Ive been in this business for 20yrs DONT WASTE YOUR TIME

  • Netrate Concepts

    In order to get net rates you would have to book about 250K in business annually, Companys that do this , do get “net rates”…such as Netrate Concepts. Everything is based on volume and industry guidelines . There is no way one person could do the volume or have the credentials, to truly get the netrate price, furthermore one must do this purchasing on a consistent basis or they will lose the ability to have true netrates.