In two proposed settlements with consumers on the 'taxes and fees' issue in hotel sales, Expedia and its Hotwire unit got very creative.
Make no mistake about it: Expedia's $123.4 million settlement and Hotwire's $5.5 million tab are financial blows to the companies, and you hear few online travel company whispers these days that the momentum in the consumer and municipal hotel-tax battles is in the OTCs' favor.
But Expedia, Hotwire and the consumer plaintiffs added a marketing element to the proposed settlements that may substantially ease the fiscal burden.
Expedia consumers eligible for the settlement can opt for cash equal to 30 percent of what they paid in service fees or take their compensation in the form of an Expedia travel credit for 65 percent of what they initially paid.
Similarly, Hotwire consumers can get 25 percent in cash or 65 percent as a credit toward travel through Hotwire.
This formula seemingly reduces the financial blow to the companies, attracts bookers to their websites and gives them the opportunity to upsell the aggrieved consumers with higher-end hotel rooms and packages.
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Source - Dennis Schaal Blog
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