Trivago is a popular website which allows the public to compare hotel prices.
If you enter your destination and stay dates, a range of hotel rooms will be displayed. At the top of the list are the best room rates for like-for-like rooms.
If the traveller clicks on a room price, they will be redirected to the hotel's booking site to make the booking.
So where does Trivago make its money? Trivago does not charge a commission to the hotel for the booking. Instead, Trivago charges the hotel 'pay per click'. The amount hotels pay per click is left to the hotel, with the incentive being that the more the hotel offers to pay per click, the higher the ranking in the search.
Three years ago, the Australian Consumer Watchdog - the ACCC (Australian Competition and Consumer Commission) - began investigating misleading practices Trivago used in its marketing
Recently, the Federal Court of Australia found Trivago guilty of four misrepresentations, or 'tricks'. They were:
- Find cheap hotels on Trivago - The Court found that the hotel rooms on top of the list were the cheapest only 33.2% of the time. The reason was that Trivago's Algorithm favoured hotels which paid higher fees per click.
- Price comparison - The Court found that the higher red strike-though price which appeared on top of the best price was not for a comparable room.
- Highlighting the top room price - The Court found that Trivago went to great lengths to highlight the top room price, without making it clear that it was the top room only because it paid the highest fee per click.
- The website was transparent - the combination of 1, 2 & 3 meant that the website was not impartial, objective and transparent, even though it gave that impression.