Trivago court ruling is ‘a win for travellers’

Trivago faces a hefty fine after being found guilty of misleading and deceptive conduct for suggesting its first placed prices were the best, when in fact they were simply the prices generating the highest Trivago commissions.
Trivago faces a hefty fine after being found guilty of misleading and deceptive conduct for suggesting its first placed prices were the best, when in fact they were simply the prices generating the highest Trivago commissions.

The Federal Court’s ruling against global travel platform Trivago is a win for transparency and therefore a win for travellers, according to several industry veterans who say the decision may have far-reaching implications for online booking websites including the potential end of “sponsored posts’’.

On Monday the court found Trivago guilty of misleading and deceptive conduct for suggesting its first placed prices were the best, when in fact they were simply the prices generating the highest Trivago commissions.

Justice Mark Moshinsky said in his ruling that “the Trivago website did not quickly and easily identify the cheapest rates available for a hotel room responding to a consumer’s search’’.

“Importantly, in at least some cases, the cheapest offer for a hotel room was filtered out and therefore did not appear on the Trivago website,” he said.

The boss of ASX-listed travel booking company Jayride, Rod Bishop, told The Australian that the ruling would likely have significant, wide-reaching implications for the online travel sector.

Many online travel platforms take revenue from sponsored listings, but the Federal Court’s ruling may force them to re-think that approach.

Trivago Girl Gabrielle Miller pictured in a Trivago ad. Picture: Supplied
Trivago Girl Gabrielle Miller pictured in a Trivago ad. Picture: Supplied
READ MORE:Guilty: Trivago’s ‘hidden’ commissions

“Marketing in online travel is brutal and intensely competitive. There are billions of dollars to earn each year by being the best at travel marketing,” he said.

“It must be tempting to squeeze out that little extra with a sponsored listing but it’s extremely important to remain impartial and transparent.”

Mr Bishop said as the boss of an online travel marketplace he feels a strong obligation to both travellers and suppliers to be as upfront as possible.

“Loyalty is critically important and the very last thing you want to do is alienate a traveller or a supplier, so you’ve got to be completely transparent in terms of how you make your recommendations,” he said.

“We strive every day to make sure travellers get the best comparison on their rides around the world, and that means allowing travellers to get the most relevant and best results every time. Clearly there’s the potential for sponsored listings to distort that.”

He added that his priority is for suppliers who provide fantastic service to win on their merits, not just because they pay more.

“Sponsored listings clearly can have negative repercussions to how people perceive your marketplace,” he said. “For us at Jayride sponsored listings fly against our mission which is to lean into the traveller experience and make sure every ride is great. Sponsored listings are not in our DNA.”

Meanwhile longtime industry executive Rod Cuthbert, the founder and former CEO of booking website Viator and former boss of travel search platform Rome2Rio, told The Australian that he believes much of the issue comes down to Google diverting web traffic to its own hotel products.

He said Google’s maneouvres force online hotel sites like Trivago and Booking.com to increasingly look to offline advertising to build brand awareness and loyalty.

“Because none of these sites can actually offer a price advantage, it’s really dangerous for them to make claims around the room rates they offer,” he said.

“They’d be better off focusing on their ease of use, customer service, product range or some other feature… Anything but price. The only problem is that the thing customers care most about is price.

“The real story here is Google’s abuse of their status as the monopoly search engine. They’re bleeding these websites of traffic and it’s starting to hurt.”

The matter will return to the Federal Court for case management at a later date.