CHICAGO, April 22 (Reuters) - Online travel agency Orbitz Worldwide OWW.N said on Tuesday it would start including all taxes and fees in its initial price display for hotels on Orbitz.com instead of just the base rate.
The change, which Orbitz hopes will help stimulate loyalty among price-sensitive customers amid economic recession, takes effect on Wednesday.
“Websites have consistently shown prices to consumers in the hotel area that do not represent the total amount of money that the customer is going to pay,” Orbitz Chief Executive Barney Harford told Reuters.
“So on a search results page, you’ll only be shown the base rate, and the base rate is not what you’ll pay to stay in a hotel,” he said. “In addition to the base rate, you’ve got to pay taxes and fees.”
Orbitz and its rivals like Expedia Inc (EXPE.O) and Priceline.com (PCLN.O) typically disclose the amount of taxes and fees later in the booking process. Orbitz said it now would display those costs in its initial price lists.
“To my knowledge they are the first travel agency that will offer this. It is certainly a very customer-friendly move,” said Henry Harteveldt, travel industry analyst at Forrester Research.
Harteveldt said taxes and fees often represent 15 percent or more of a total hotel booking.
In displaying the higher costs up front, however, Orbitz runs the risk of confusing its customers who may mistake the listing as a higher total price than offerings by competitors.
Harford said Orbitz would make this difference very clear on its website.
Orbitz also said on Tuesday that it would cut booking fees for hotel rooms booked on or before July 15. In doing so, the company hopes to stimulate travel demand during the peak summer travel season.
Online travel agencies, struggling to overcome slumping travel demand in a weak economy, are trying to spur travel demand with sales and other promotions.
Experts have said the various promotions may lure new customers, but they also could erode revenue streams. (Reporting by Kyle Peterson, editing by Matthew Lewis)