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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  • James

    I say you help this woman because of the confirmation of the lower rate by the front desk staff.

  • TonyA_says

    If I was the OP, I would have felt bad that I did not get the 30% discount offered by Wyndham if I stayed 3 consecutive days or more.
    Plus I get their points if I booked directly.

    If AARP is really helping their members, they would have did a better search for them. The OP should be asking AARP for a refund of her dues. Her ire should be directed towards AARP.

  • TonyA_says

    I don’t understand. I don’t believe a travel agent is allowed to MARK UP a published fare or a cruise fare. I wonder why there is even a conversation about a NET rate. Linda Bator please set me straight. Thanks.

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

    But what possible reason could she have to go back to Expedia? They’re a middleman. They bought something from the supplier and sold it to the consumer. Both sides agreed upon a price. What possible reason would Expedia have to give her a discount? It’s obvious that Expedia marks up everything it sells. How else is it supposed to be a business? It’s not like she got duped by Expedia, the hotel or AARP. I simply don’t get it…

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

    Exactly. But if I ever got that info (the net price), I might use it to try negotiating directly with the hotel the next time!

  • TonyA_says

    If I were her, I will get mad at AARP. Why? Because (IMO) AARP did not lead her to the cheapest rate.

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

    Hi Grant. I think there are two additional points to consider here. 1) It wasn’t Walmart, the company, it was a minimum wage checkout girl, and 2) she had already consumed the product (ie. the hotel room) at the agreed upon price. It’s not like she made a decision to buy based on the net price. But I see your point. My reaction would’ve probably been, “It woulda been nice, but oh well…”

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

    Wow. That’s opening up a whole new can of worms. Expedia wouldn’t do that, would they? Now THAT would be worthy of discussion!

  • mikegun

    I’ve tried that without success. I even tried it for this recent stay. I knew the Priceline magic number was $40 and that was my final negotiation point. They would not budge of the $80 published rate if I booked directly.

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

    In this case, because she stayed 3+ nights and qualified for a promotion, going directly to the hotel would’ve been a better choice. But for most hotels, didn’t you say, Tony, that the Expedia price would’ve been better than the AARP price?

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

    Her agreement was with Expedia. They delivered the service and got the agreed upon rate. Case closed. If there’s a slap fight on the cards, it should be between the OP and the Wyndham. But then again, it sounds like she paid Expedia, so the hotel would have no reason to get involved. Any way you cut it, I can’t see that she has a leg to stand on…

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

    Welcome to the dark side.

  • Stephen0118

    I’ve given up trying to book hotel rooms through third parties because these hotels treat you like third-class citizens. I’ll go through the hotel’s website and see if I can get a good rate there.

  • Stephen0118

    I’ve given up trying to book hotel rooms through third parties because these hotels treat you like third-class citizens. I’ll go through the hotel’s website and see if I can get a good rate there.

  • DavidYoung2

    Does the OP expect everyone to work ‘at cost?’ Does she expect the grocery store to cover their expenses and no more? Sorry dear, everybody marks up a product — that’s why we’re in business.

    If she was happy with the rate at which she initially booked, be happy and move on. If Expedia made money, good for them. Everybody should be happy.

  • http://twitter.com/johntbaker John Baker

    Actually the better analog would be that she bought and paid for the TV online and went to the store to pick it up. While at the store, the check out girl printed out the store invoice that shows what they paid for it.

    In this case, she paid Expedia for the room not the hotel.

  • TonyA_says

    James, the standard AARP discount for this property is only 15% of BAR (or $92.65 for a BAR of $109). Expedia-AARP site can easily match that since Expedia NET COST is (I assume) at least 25-30% off BAR.

    In fact if you visit the Expedia-AARP site, Expedia is selling a King A Type room for about the same price ~$93 or slightly lower depending on the day of week or length of stay.

    But if you go to the hotel’s site directly and click the Special Offers, they currently have Stay Two Nights and Save 20%. Use Promo Rate Plan: BPRS20

    Wyndham has a Stay 3 Nights and Save 30%. So you can check by calling the hotel directly at 972-233-7600.

    Bottom line, she could easily get 20% off (that’s written on the hotel’s own website). If she called (or have the correct Promo Code) she could have gotten the 30% – 3 days stay discount.

    As far as I know, I have provided more info in my post for free than the info she got from AARP with her paid membership.
    Shame on them.

  • TonyA_says

    Actually Expedia/AARP offers a Stay 2 Save 15% on this property.
    Problem is the property itself offers a nicer deal – Stay 2 Save 20%.
    Wyndham (corporate, may) even has a better deal – Stay 3 Save 30% but you need to call to inquire.

    So the real issue is HOW SHOULD (OLD) PEOPLE SEARCH?
    Granted that many old people are on a fixed income and have limited budgets, so that is why they have PAID MEMBERSHIP BASED CLUBS like AARP to help them.

    I question whether AARP did her a lot of good in this one.
    AARP must have made money on her since she paid her dues and I got to believe Expedia pays AARP for co-marketing. But did the ole lady got screwed by her belief in her organization?
    That’s the $64K question.

  • bodega3

    Chris, who charged the the rate to her card? Was it Expedia or the hotel? The rate agreed upon at the time of reservation is usually noted on the card or paper you sign when you check in. What was shown then? You usually initial by that amount.
    Regardless on if Expedia or the hotel charged the card for the agreed amount when the OP made the reservation, what she was given on her folio at checkout was tacky by the hotel. Technically the rate was correct, just that it was between them and Expedia, not for the eyes of the guest. It was a mistake by the front desk, who just printed out the folio not checking the correctness of it. Yet to be fair to the employee, I have never had a front desk person look at what they present to me and wait for me to check for errors.

  • TonyA_says

    IMO it is better to call the hotel and book a room even at a slightly higher rate than what Expedia or Priceline sells it for, BUT TO REQUEST FOR AN UPGRADED ROOM.

    As Chris Elliott has said here in his blog, hotels have “runts” i.e. the Priceline room. For about 10-20 bucks more you can stay as a first-class citizen, enjoy your vacation and perhaps laugh at the third class idiots :-)

  • TonyA_says

    Hmmm, the old lady FELT CHEATED. The question is by whom?
    Can’t be the hotel because she did not buy from the hotel.
    She bought from Expedia on the recommendation of AARP because she TRUSTS AARP. That’s where the problem lies.

  • emanon256

    I think its more along the lines of, she went to wall mart, paid $1,000, and arranged to have the TV Delivered. She was given her receipt at that time for $1,000. She paid when she ordered the TV, just like she already paid Expedia. The drop shipper Wall Mart uses charged Wall Mart $800 for the TV, and shipped it directly to her house. When the TV was delivered, the drop shipper accidentally printed out Wall Marts invoice and left it on the box, it said $800. She asked the drop shipping company if that was the price and they confirmed it was as that was the price they sold the TV for. So now she wants $200 back as she already paid $1,000, and saw the $800 invoice. She calls Wall Mart and they tell her that that was the drop shippers invoice to Wall Mart for the TV, she gets upset and they offer her a gift card to Wall Mart, she refuses and calls a consumer advocate.

  • emanon256

    Thanks.

  • mikegun

    Tony,

    AARP has a “Travel Center” powered by Expedia.

    http://www.aarp.org/travel/

    (right side of page enter dates and destination)

  • jebaker

    how exactly is Expedia supposed to make money if not by marking up their discounted rate? If she wants a net cost, she should make her reservations directly with the hotel. And I’d bet her price will be higher than Expedias.

  • TonyA_says

    Priceline had 2, now 3, hotel products.
    The bidding (opaque) product can come from DISTRESSED inventory. They are coded differently (rate and inventory) in the reservation system.
    The MERCHANT product simply has a huge discount (at least 25%) from BAR. This is also known as the Travelweb contract. This reservation is mostly PREPAID.

    The third product is an AGENCY (pay at hotel) reservation from Booking.com since Priceline bought them.

    Decent hotels will not openly sell you distressed inventory.
    The need some cover from opaque sites.
    Of course I hope you don’t mind getting the “Priceline” room :-)

  • TonyA_says

    Yup I posted the direct links.
    Note that AARP also has a discount code with Wyndham (directly).
    So which one is better for you?

  • curious

    I say “yes” because I’m curious to know the outcome if you do.

  • mikegun

    This was opaque.

    Hotel was published for $79 on every website. The “bidding sites” clued me into what to bid ($40) and what hotel I would probably get and it met my needs. I called the hotel and asked for any specials and was told $79. I asked about AAA, AARP etc and was told $79. I asked about a “special” non-refundable rates and was told nothing available that matched. I finally mentioned the $40 bid strategy on Priceline and was told that any deals made via Priceline are not available to book directly.

    I called back another day/time and was told the same. So I bid $40 on Priceline the day before arrival and got the hotel expected.

    I got a very large, clean, king bedded room on a mid-level floor about halfway down the hall from the elevator. I could park very close to the entrance. WiFi was strong and hotel was quiet. My typical opaque Priceline experience. If this was a “Priceline Room” I have no complaints.

  • TonyA_says

    Yes OPAQUE inventory and rates are coded differently by the property (usually in Secure Rate Travelport/Worldspan) and can only be viewed by the VENDOR (i.e. Priceline). Hence you can search all you want and never see them from anyone else.

    Distressed Inventory can be good rooms in off-season or when a hotel gets lots of cancellations. So you can get lucky.

    I am not sure how hotels deal with Hotwire inventory.

  • judy serie nagy

    Does she think that travel agencies operate as a public service? If TAs aren’t compensated for their services, they will soon disappear, won’t they? Note how much fun it is to deal directly with the airlines now that they don’t pay commish for bookings. If you’re not an elite flyer, 30 minutes on the phone with someone you can’t understand and who cannot comprehend a basic question, much less solve a problem, is enough to prove that TAs deserve their commissions.

  • http://www.facebook.com/stephanie.merck Stephanie Baker

    To be clear, is she wanting to pay the “wholesale rate” that Expedia uses to purchase rooms in bulk? Why would she think she should get that rate? As far as I know, all retail works this way. This is how companies make money. If we all paid the wholesale price, retailers would go out of business.

    I am assuming that I am missing a key detail here; it makes no sense that this person wants the same rate that Expedia gets when it buys in bulk and provides publicity for hotels on its website.

  • Betty

    Always check SEVERAL websites, including the hotel’s website, BEFORE you book and then get the best price available! She agreed to this price and she should have to pay it!

  • Extramail

    Isn’t that the election told us – capitalism is bad, bad, bad!

  • TonyA_says

    I thought about this more. On the surface, it sure makes the OP look a bit greedy. But then I realized that she may have been depending on the REPUTATION of AARP to do the right thing for her – meaning find her the best (cheapest) rate.

    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.

    She paid about 15% less than the Best Available Rate. That is something to yawn about since that is the standard AARP discount rate for this hotel. Doing a little math, it looks like Expedia got a ~35% discount for its NET rate. If my calculations are correct, that leaves about 20% markup for Expedia (while small travel agents at best make 10% commission). That said, isn’t the real issue one of “price gouging” or the laziness of AARP to get a better rate for her.
    I wonder how much kickback AARP is getting from Expedia? Does that motivate them to search the best rate for members?

  • TonyA_says

    Mike, is 20% markup reasonable?

  • mszabo

    I guess that all depends on what the walk up price for the room is. Expedia advertises getting you the “top deal” and as a way to save money. The OP may well be mad that market value of the the service Expedia provides is less than the $270 she paid for it. Hard to say really without Chris giving details on what the price of the room would have been without Expedia. As I said I completely agree with you in that no mediation is needed or is anything due to the OP. But certainly their complaint isn’t with the Hotel but with Expedia.

  • LonnieC

    She got exactly what she wanted at the exact price she bargained for. The fact that Expedia makes a profit on her total payment should certainly not be a surprise, or did she think Expedia does its work for nothing? No deal. Pay the $416 and quit trying to chisel….

  • bodega3

    That is actually a low percentage. Notice how so many stores over the Thanksgiving weekend were giving shoppers 40% off. What do you think their mark up is?

  • TonyA_says

    Why should they make a lot more than the average agency commission?
    They do not maintain any inventory and computers do almost all of the work for distribution.
    The answer to my question is because they can :-)

  • Ed Boston

    One business I worked with the typical markup was closer to 300% (not a travel related business).

  • TonyA_says

    Ain’t gonna happen. Expedia is a for profit business. If there is anything to be learned here it is how crazy hotel room distribution has become.

  • TonyA_says

    Pharmaceuticals add even more. But travel vending machines?
    No manufacturing and inventory, computers do almost everything.
    I wonder why AAA and AARP can’t get a better deal.

  • mikegun

    Gotta check ‘em both, and then compare to the regular published promos that are available to everyone. Also need to compare to AAA, if you have one and any other “private” rates you may qualify for. You may also get a better rate by shopping other third party websites/wholesalers.

    Then do that for each hotel that you want to consider for your stay,

  • TonyA_says

    I can’t wait for google to come in and sort all of this out. Perhaps that is the reason Priceline bought Kayak. They read the handwriting on the wall :-)

  • http://www.facebook.com/people/Linda-Loudermilk-Tomberlin/1344557368 Linda Loudermilk Tomberlin

    Absolutely not. When you make a purchase with Expedia, you must expect that Expedia is going to make a profit. The hotel made a mistake and showed her how much the profit was. She certainly has no claim against Expedia. Does she think that when she buys anything else they aren’t making a profit?

  • Joe Farrell

    So she doesn’t want anyone to make a profit? Like others have said, she thought $416 was a deal and its still a deal. What does she think? Expedia makes all that effort out of the goodness of their hearts? Everyone wants a better rate – if she stayed at the hotel every week she’d get Expedia’s internal rate, get better rooms and they’d always have a room for her . . .

  • BobChi

    I had a somewhat similar experience, booking several prepaid rooms through an OTA for business travel. When I got the receipt in the morning, the amounts quoted were quite a bit lower than what I had paid. The clerk told me, “That amount is what (name of OTA) paid us. You will need to go back to the OTA and print out their receipt to turn in to your employer.” I asked if I could have gotten the lower rate myself, somehow, and he said, “No, that’s the rate they pay in bulk; you could have probably got a better rate than you paid though by booking directly at our website.” I doubt there’s anything the hotel did wrong for the OP so I don’t think the case is one to mediate.

  • Cherity

    I am a travel agent. Yes, we can mark up. In this situation here, the OP doesn’t understand that the bill she received showed that “net” rate because that is the hotel’s “portion” of the total price. The remaining portion is the commission paid to the travel agency. For instance, you go to Starwood’s website and find a rate at a Sheraton for $89/night and you book it; Starwood earns the “gross” rate since you booked directly with them. If you go to AAA’s website and find the same $89 rate at the same hotel and you book it, AAA will earn a commission off that sale. So, let’s say the agency gets a 20% commission for every night they sell, the hotel would earn the “net” rate of $71.20 and AAA earns $17.80 of that in commission. Either way, you would still pay the same price and you wouldn’t have the slightest idea what the split was between the hotel and the agency.

    The OP is NOT entitled to Expedia’s commission, regardless of what the hotel clerk showed her or told her. That is what she doesn’t understand. Gross and net rates are strictly per agreement between the supplier and the agency. Use a travel agent/agency and they will earn their portion for closing the sale. That’s all there is to this!

  • http://www.facebook.com/profile.php?id=1484503748 Charlie Funk

    Is there ANYONE reading this that doesn’t understand that AARP benefits financially from transactions like this? Those financial benefits have to be paid by SOMEONE. Congratulations AARP member, you were just elected. And for those struggling to understand what I posted – AARP GETS A CUT FOLKS.