FlyerTalk Forums - View Single Post - ETHICS - "$0" Rate Errors & Demands to Honor
Old Sep 3, 2001 | 6:40 pm
  #74  
jetsetter
 
Join Date: Oct 1999
Location: BOS
Programs: JetBlue Mosaic, WN A List Preferred, Hyatt Globalest, Hilton Diamond, Marriott Platinum, IHG Spire
Posts: 3,966
fallinasleep ,
Thank you for the link to the Gonzale's story...I have read it, and would recommend that others do the same.

I'm not sure the deciding factor is economic status alone. E.g. Gonzale's had what many would term a tough life. Is the determining factor, more so than economic status, one's experience with societies institutions. Remember, in my hypothetical, the 100 homeless people had gotten arrested for loytering in a bank ATM. Such an arrest and experience would quite likely leave the person with a bad experience with the institution of politics (e.g. the government), as well as the institution of economics (the bank/corporate America).

Or for a better example, would someone who had been laid off 5 times be more, neutral, or less likely to condone the booking of $29 trips to CDG or $0 room nights.

Personally I think that Hilton was correct in making the offer that it did in response to its computer system error. If I understand correctly, they offered guests 1 night free, and subsequent nights at 50% off lowest rates. This is reasonable, and I would expect them to do this. I agree with the above post that they are "bib boys," and that they recognize the business risk in deploying a computer system that processes transactions unattendedly. Any system, whether human or computer based, has certain vulnerabilities and is prone to fail at certain times...and the business is obligated to deal with situations where the system fails to run as it was expected too operate. Particularly since the system provided a confirmation number and confirmation email, I feel this compells Hilton or whatever the company is to either honor the rates or negotiate a mutually agreeable settelement between the guest and the industry service provider. I am guessing that 300-room-guy wanted to net the 500 miles per stay for the 300 rooms, even if the guest no showed. Let's say just for argument sake they are running double miles, so thats 300,000 miles that this mystery guy or girl would get.
How much would this cost Hilton? $.02 * 300,000 miles = $6,000.00. Now for a big company like Hilton, $6,000 is not an extraordinary sum of money. Let's say the whole system screw up cost them $100,000...thats still with in the ranges used for contingencies and business risk. In other words, I don't think it is un heard of for a computer glitch to cost a corporation $100,000. How much did the Y2K glitch cost major corporations?

All businesses assume risks, and incorporate the cost of the risks in to the products and services you and I buy. But I don't think it is unreasonable for Hilton to work with 300-room-guy to reach a mutually agreeable settlement for the glitch in the computer system. And if the glitch was via some distribution chanel, then Hilton should pass those costs on to the provider or chanel. I have not read this secret email, but I would say perhaps (and this is only speculation) that maybe 300-room-guy may have gotten a little greety in his or her demands to Hilton, but such can easily be worked out in a negotiation.

So if all of you want to be angry with 300-room-guy, then perhaps you have a small right to be angry with him or her because Hilton is going to have to pay this person and they are going to pass those costs on to you when you stay. But then again, if 300-room-guys didn't exist, would Hilton pass along the savings from not having to pay out as a result of business risks to you...the rate paying guest? Thats why I say you only have a little right to be angry...because I don't think Hilton would drop its rates by 10% because the public rolled over when its systems made mistakes.

I will also point out that it is my understanding that an airline must honor an advertised rate in the newspaper for the day it is advertised. I remember a $48 BOS-California CO mis-print that was supposed to be $148.

I also agree that legally with a $0 rate, I'm not sure how the guest could argue that they are providing consideration...but I am not a lawyer. But then again what if the computer show a rate of $.01? Would that change things?

Also imagine how much time 300-room guy must have had to spend in doing this. Does anyone know how long it would take to book 300 reservations? And are all of you trying to say that this person should have gotten nothing? Its not like 300-room-guy hacked into the system and created the $0 rate, he or she simply found the rate and booked it, and received written/email confirmation of the transaction. Also the travel industry, at least on paper, is not forgiving of consumers mistakes. Like if a consumer fails to cancel a reservation, then by the book, they are charged a no show fee. In analyzing this ethically I would have to ask myself, how sympathetic has the Hilton Corporation been when I made a honest mistake? How has the Hilton Corporation treated me overall? How understanding is the Hilton Corporation of my needs? Has the Hilton Corporation ever really helped me out in a big way or really screwed me over? Does the Hilton Corporation treat me fairly and reasonably, or do they nickel and dime me wherever and whenever they can? These would be the most important questions if I faced a situation of what to do with a rate mistake such as a $0 room rate or a flight to Europe for $29. In general, Hilton has been slightly sometimes sympathetic if I make a mistake (like forgetting to cancel a res), they have never really helped me out or really screwed me, they generally treat me well, the rates are usually fair as long as you know how to shop, they don't charge me for 800 number calls like some people do, and they nickel and dime me a little for things in the mini bar and for drinks in the executive level. I usually get my breakfast free, and usually get an upgrade. When I have a problem, the property usually makes it right. So based on this, I think there offer is reasonable, but it is unreasonable for them to refuse to do anything for me if I booked one of these rooms which they advertised. As someone said, what if they are doing the $0 rooms to get attention? Look at how Biztravel got attention when they offered refunds on delayed flights? Maybe they will some day run a promotion where evry 1000 rooms booked, someone gets one for free? That might not be a bad way to spur online transactions.

All of you are wrapped up in this right and wrong quandry. Is it right or wrong for 300 room guy to do what he did? Is it right or wrong for a hotel to charge $4.50 for a can of coke? Or $6 for a candy bar? Actually I think what 300-room-guy did and what hotels do in terms of mini bar charges are really similar. In both cases, someone is getting wripped off, and both people know it. Both really are "cheating." In both cases, the parties are exploiting known vulnerabilities. If Hilton thought they could charge $50 for a can of coke, they probably would do it. And if 300-room-guy could have easily booked 3000 rooms for $.01 and gotten 3,000,000 miles...maybe he would have done it.
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