To see how the travel business really works, sometimes it takes a good old-fashioned lawsuit. Vanguard Car Rental, the parent company of Alamo and National, took Orbitz to court, because Orbitz wasn’t listing the Vanguard brands on the first page of search results when customers ran searches on the online travel megasite.
The suit, filed Friday in the Illinois Circuit Court of Cook County, alleges Alamo and National rental offers show up on a secondary page because Vanguard refused to increase the commission rate paid Orbitz for online bookings. That rate was established in a contract that runs through 2008.
[...]
Chicago-based Orbitz called the claims “baseless” in a news release, and said Vanguard was trying to sue its way to preferential placement on the website.In addition to requesting the higher commission rate, Orbitz demanded $1.5 million in mid-April, Vanguard claimed.
Baseless? Orbitz panned the suit in a press release, but in the process, effectively admitted to doing what Vanguard accused them of, and exposed the nature of their business model: pay to play.
The bottom line is that Vanguard is trying to use a lawsuit to get a sorting result from Orbitz that Vanguard and Orbitz did not agree to. In short, Vanguard is trying to use its lawsuit to get something for nothing.
So the sorting of rental car prices isn’t based on price. Other sites are up front about this, by labeling the first set of results as “preferred vendors” or such. But Orbitz doesn’t do that. They just show results. And those results are driven by — let’s be blunt here — bribes.
So why did the judge throw out the case? After all Orbitz essentially agreed with Vanguard and admitted that they rank results according to who’s willing to pay for the privilege. But all this is seemingly legit, according to the contracts between the agency and the supplier.
At the end of the day, this illustrates that you really need to shop around. Never, EVER use just one site to search for fares or rates. You never know what secret deals are influencing the search results.
(Thanks to Budget Travel’s Sean O’Neill!)
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May 1st, 2008 at 9:04 pm
I never use travel sites like that anymore anyways. There’s almost always a better deal on the direct provider’s website – for example, Alamo’s been running a triple miles and free upgrade deal for a while. Budget has hammered some prices pretty low as well (traveling to Warwick, RI on business next week – renting a standard size vehicle from Budget for less than $120 after taxes and fees for 5 days)…
May 2nd, 2008 at 5:00 pm
In response to this blog post, we at Orbitz.com wanted to add some clarity to this conversation.
First, Orbitz continues to have an unbiased and comprehensive display of airfare results in the matrix on Orbitz.com. We are constantly optimizing our search algorithm to bring the best prices and most relevant results for our customers.
Second, whether it is through our pre-paid hotel inventory or through our car rental search results, we are determined to provide customers with the best all around value. Great prices. Suppliers with great customer service. And access to comprehensive inventory. Simply put, we want to put on display within our virtual store shelves travel options that most customers actually want to book.
Finally, this brings us to the baseless lawsuit by Alamo and National. A Judge in the Circuit Court of Cook County, Illinois rejected Alamo and National’s over the top attempt to get a temporary restraining order to stop Orbitz from doing exactly what Orbitz is absolutely entitled to to under the contract. After hearing Alamo and National’s story, the Judge held that they lacked a likelihood of success on their contract claim, meaning that their claim is fundamentally weak. It is important to note that Orbitz continues to act within its rights to display valued travel options to its customers.
Customers should know that we stock our shelves with inventory that most travelers actually want to buy. We are a business, and at the end of the day, we make money when more travel is booked. The truth is, Alamo and National wanted premier shelf space for inventory that wasn’t moving like other suppliers’ inventory. And we never agreed that they would always have that premier place within our results.
Something to think about…if you owned a store – would you provide premier shelf space for inventory that didn’t sell as well as someone else’s inventory?
July 24th, 2008 at 8:24 am
[...] This sort of thing goes both ways, too. Notably, online travel agencies don’t claim to cover ALL the options. Orbitz, for example, limits customers’ choices in its rental car search to those companies that pay to be included. [...]
October 25th, 2008 at 4:06 am
nice one