Travelocity announced it cut its hotel-booking fees, as I reported it did a couple of weeks ago, eliminated its hotel change and cancellation fees, and introduced a hotel-price guarantee more wide-ranging than Orbitz Hotel Price Assurance and the respective programs of Travelocity's competitors.
In tweaking its existing Travelocity Price and Service Guarantee, Travelocity is telling consumers that after they book a pre-paid hotel on Travelocity, if they find an identical booking -- same hotel, dates, room type etc. -- at a lower base rate across the Web, then Travelocity will refund them the difference. The guarantee doesn't apply to auction/opaque offerings from websites like Priceline.com and Hotwire.
The Travelocity guarantee goes much further than Orbitz's policy, for instance, in which Orbitz only sends a refund check if its customers find a lower rate on Orbitz itself.
However, one key difference between the programs is that Orbitz monitors whether a lower price becomes available on its website before the stay and automatically sends a refund check.
On the other hand, Travelocity, which guarantees its pricing in relation to a plethora of websites, requires that consumers submit a claim form to collect. Obviously, that would reduce the number of payments that Travelocity is forced to make.
In recent months, Travelocity has been criticized for its tardiness in responding to marketplace changes.
Orbitz, for instance, introduced Hotel Price Assurance and cuts its hotel booking fees around six months ago, and it also eliminated change and cancellation fees at the end of September. (Actually, Priceline led the way on booking-fee cuts, and ditched its change and cancel fees in 2008.)
Travelocity spokesman Joel Frey says one reason the online travel agency took its time about introducing a hotel-price guarantee is that it conducted consumer research about it and decided that Orbitz's automatic-refund mechanism was not the way to go.
"Consumers told us in our research that they like having the control of looking on their own and they don't necessarily trust a big corporation to truly look out for them," Frey says. "That info played a big role in our thinking and that's why it took awhile."
There had been wide speculation that Travelocity, part of privately held Sabre, delayed cutting hotel booking fees and matching competitors on other hotel policies because the OTA has lots of debt and less maneuverability than its peers.
Frey says Travelocity will remain competitive and believes it will make itself whole, after sending out refund checks, from greater hotel volumes because of the new guarantee and increased revenue in its media business.
Travelocity's introduction of the new hotel price guarantee provides a challenge to Orbitz, which has tied its future to positioning itself as the website to book hotel rooms.
So now Travelocity apparently has parity with Orbitz on hotel-booking fees, change and cancel fee policies, and apparently has bested Orbitz on its hotel price assurance policies.
Orbitz, meanwhile, still stands out in some respects because it went where other OTAs fear to trade when it introduced Total Price Hotels in April.
Still, Travelocity has laid down a gauntlet to Orbitz and the other OTAs.
Orbitz, now it's your move.