Another Point Of View

[kakalina]

We found this article regarding the Noordam pricing fiasco and thought it was quite interesting. I am curious as to what you think.

 

Cruise News Daily Newsfile

November 22, 2006

Questions of Ethics: Mom Never Told You Booking a Cruise Would Be So Difficult

A few weeks ago, Holland America made an error in loading a small number of group rates in their reservation computer system. During the short period they were available to sell, cabins were sold for a significant amount less than they should have been. Within four days the error was discovered and corrected, and that same day, Holland America notified agents having booked the rate of the error. Unlike most similar instances in the past, Holland America told the agents and their customers they were adjusting the rate to the correct one; they would not absorb the difference, even if passengers had paid in full.

That was the story as it was covered by two or three media outlets. Others either haven't heard of it or didn't care. As we discovered when we looked into it however, there's much more to the story, and neither the story nor covering it is as simple as it seems. So far only a few people have come forward and said they have been directly affected, but in the coming weeks it appears to us that this story is going to take on large proportions as more passengers realize they are part of it.

 

What makes this story difficult to cover is that Holland America issued just one brief, but very pithy, statement, and no one there nor at the travel agencies wants to speak about it on the record. The only ones who really want to talk about this are the unhappy customers and completely unaffected - but outraged - people on bulletin boards.

 

There are contained in the story some very important issues, however.

 

For those reasons, we are going to report this a little differently than most stories you read in CND. Much of what I've learned _ and in this case it has been volumes _ has been by talking to people off the record and putting that together with other things I know. Almost always when you read something in CND, we tell you who said it, and they are fine with us reporting it. Seldom have we ever attributed something to "a source speaking on the condition of anonymity." In this case, I'm going to depart from that standard because this is an important issue, and some of the things I tell you, will just have to be taken on faith, but I'm 98% sure of them. Without doing it this way, I could only tell you a little more than is in the first paragraph.

 

One important point that is not getting out in this issue is the number of cabins which were priced incorrectly. People seem to have the impression this only involves a few cabins and only a few thousand dollars are at issue. Holland America isn't saying, but reliable sources are telling us it was in the hundreds - multiple hundreds. So far the people who have come forward indicate they are being asked for about $1,100 per cabin. If that is average, then it becomes easy to understand why Holland America isn't automatically just absorbing the difference. This could easily run reach a half million dollars, and most likely more.

 

Another point in Holland America's favor that isn't being highlighted is that Holland America advised the agents involved of the error immediately. The incorrect prices were loaded on a Friday night. The error was discovered on Tuesday morning and by the end of the day the fares had been corrected, and all the travel agencies had been notified. The travelers who are complaining are saying they weren't contacted until weeks later. We suspect that what was going on was that the agencies were expecting to contact Holland America and have absorb the fare difference, and therefore delayed telling their customers. Nonetheless, Holland America WAS prompt in reporting the error; it wasn't their fault if agencies chose not to be prompt in at least letting their customers into the loop.

 

Additionally, Holland America was offering compensation for the error in the amount of a $100 onboard credit. If paying the correct (higher) fare wasn't acceptable to the customer, they also have the opportunity to cancel without penalty.

 

I've seen a number of people online calling it a stupid public relations move not to honor the incorrect fares because of the way it may affect future sales. There is evidence that the decision on how this would be handled was made at the highest levels in the company. These are not stupid people running Holland America, and they are well aware of image and goodwill. Since they made the decision they did, it says one of two things. Either they think the dollar amount of absorbing the incorrect price outweighs the value of the future lost business, or, more probably, they just don't believe they can afford to give away this amount of money right now.

 

Given the approximate number of cabins I believe were sold, and the number of people who are actually coming forward reporting they were one of those affected, I believe there are still many, many who are yet to be told by their travel agents of the pricing error. The agents are perhaps believing they can still in some way negotiate Holland America into absorbing the price difference. I’m told Holland America will not acquiesce in this case.

 

Early on, I didn't see why so many cabins were sold, given when the error occurred. This happened in mid-September, and the fares were available for sale basically on two weekend days (when typically there aren't as many sales as on a Monday), a Monday and a Tuesday (but if the agents were reading their e-mail on Tuesday, they would not have continued selling during much of the day on Tuesday). They were for ten 11-day Caribbean sailings during the months of January thru April, which were four to six months in advance.

 

Limiting sales even more was that these were for group fares offered just by "a select number of travel agencies." They were not available to consumers on HAL's website, by calling HAL directly or even though most travel agencies.

 

Given all those conditions, there should have been a relatively small number of sales, but with the number of cabins I believe to have been involved, it says something else was at work. Some of the agencies which had the incorrect rates are outlets whose business is based on selling deeply discounted travel. It appears to me that some of them realized the space was pricing abnormally low, and exploited the pricing mistake by actually promoting the erroneous rate, probably believing Holland America would honor it for them.

 

There are also indications that agents involved would have had evidence in their offices that the group rates they were selling were indeed different (substantially lower) than the ones they had contracted. They normally wouldn't have verified those during the selling process, unless they felt the rates looked suspiciously low or high, but once they were alerted to the fact that the customers owed additional money, they could easily verify that they had been selling prices lower prices than which they had contracted.

 

So that brings us to some difficult ethical questions.

 

While there are lots of points in Holland America's favor, we don't believe they are totally off the ethical hook. After all, they did make a mistake, and there were probably at least some people who bought (and at least some agents who sold) cabins unwittingly as to what had happened. Holland America has done what they could to mitigate any real damage (not disappointment) to the consumer. They admitted the error, and they promptly advised the agents of the problem. If the agents had promptly passed the word along to their customers, everyone would have known a maximum of four days after they made their booking (for cruises four to six months away), the vast majority within a day or two of booking. HAL just wants the passengers to pay the correct fare, which is still less than other passengers booking at the same time through other agencies or directly through HAL were paying, and HAL is offering them $100 onboard credit besides.

 

So should Holland America accept the complete financial responsibility for their mistake, no matter what the cost to them?

 

One has to consider if the individuals who call for them to do that always do that in their own lives. If they were to make a small mistake at work, a mistake that would cost their company a hundred dollars to cover for them, would they ante up? But what if it were large enough that it would take their entire next month’s paychecks to cover it? Would they be so quick to try to cover it, or would they depend on others' sense of doing the right thing to try to preserve their paycheck and be able to make their mortgage payment?

 

There are lots of travel agents weighing in saying they will be reluctant to sell Holland America because they can’t depend on them to stand behind the prices they quote. But you have to wonder if the situation were reversed and those agents misquoted a price by a thousand dollars or invoiced a customer incorrectly. Most would probably say it was a matter of integrity and they would certainly stand behind the price to ensure their customer's loyalty. But what if the price they misquoted was then booked by a few dozen or a hundred people, costing them tens of thousands of dollars?

 

For most people, it seems to be a matter of degree. A matter of how much money is involved.

 

What about the agents that exploited the pricing error by promoting it? If you go into the grocery store and find that the soda scans for a dime rather than a dollar, do you say anything about it? Or do you consider it a bargain? The clerk may note the discrepancy so it can be corrected, but tell you it's the store's policy to let the customer have it for the price as it scans. You got a bargain. But then when you know the price is wrong, do you go right back and buy another dozen bottles before they can change the price in the computer?

 

Does the amount of time before the error is caught have anything to do with it? These days in most stores, the clerks depend on the cash register to determine the amount change they should give you. Suppose you give the clerk a ten-dollar bill for your purchase, but the clerk enters the amount tendered as $100 and without thinking just gives you an extra $90 in change. Without noticing, the clerk closes the cash drawer and you close your hand and start to walk away. At that moment, the clerk realizes what happened and says he thinks he gave you too much change. Would you say that's too bad because he's already finished the transaction? Essentially that's what these people are saying to Holland America.

 

There's no black and white answer to this one. Everyone needs to decide this for themselves. Nothing is going to change no matter what anyone decides, except for the executives at Holland America, and they've already made their decision.

 

What concerns me most is the dangerous precedent that's being set by a travel supplier quoting a price, invoicing it, accepting money on the booking and then coming back and wanting to increase it. In this case, it appears Holland America has lots of things in their favor on the big scale of ethics: There is evidence that this was an honest mistake. Holland America notified all the booking agents immediately - in a matter of days or hours after booking, so it would be exceptional if anyone were actually damaged by this, aside from being disappointed they didn't get the outstanding bargain they thought they did. Holland America is just asking people to pay what was the correct price. If anyone wants to cancel, they can, and there is no penalty.

 

So in this single instance, I think in the court of public opinion, Holland America should be given a pass this time. But if they do it again within a decade, they're toast.

[jtl513]

I agree that this casts quite a different light on the story than the reports that we heard before ... and makes me more sympathetic to HALs stance.

[wecruisenow]

The way it works, in the real world, is that when an error of whatever magnitude is made by a company to members of the purchasing public, the company is responsible for the error. End of discussion. Holland America is no exception to that rule.

 

I am embarking upon my third cruise with Holland America on March 4. It will be my last. I have sailed with HAL because of the places they go. The customer service is, in this one customer's opinion, nonexistent. That has been true for us, on board the ships and trying to deal with HAL direct. I have never filed a complaint of any kind because I learned early on that it was useless to waste my time doing so. I have been over charged, lied to, cleaned my own bathtub and sink on board, never received room service when ordered, treated rudely without reason, and have left mandatory tips in place for personnel that I never saw.

 

I have done the above because HAL sailed where I wanted to go. I do believe that I am only one of many who will take the same silent action. Perhaps when enough cabins remain empty, the message will become clear to HAL.

 

As a public company, they do have a responsibility to perform a minimal level of service.

 

On a more positive note, I want to thank those of you who posted the change of ports for the Rotterdam, March 4, South American cruise. I have read these boards for years. This is my first time to respond. I was able to change my tours without it costing too awfully much money. I am still waiting to be notified of the changes. I have asked my TA and HAL. HAL simply states they can not provide me with any information since I did not book directly with them. OK. My TA says HAL never notifed them of the changes. The only "official" place it is recorded is on HAL's shore excursion site at least that I am aware of.

 

Happy continued cruising to all. We love it and will contiue on another line.

:) :p :D :rolleyes: ;)

[lippylulu]

I appreciate the different perspective on this controversial topic. The one area where I think customers could have been harmed by more than a $100 credit is if they had booked nonrefundable airfare or incurred other change fees if they cancelled their cruise. In this case, I think HAL should have been responsible IF the passengers chose to cancel entirely and could document penalties. Of cursem if travel agents took advantage of the situation than it is difficult to knnow WHO should pay. Ultimaetly, the way it was handled obviously enerated some bad feelings, but minimized who actually had to foot what must have been a fairly substantial bill.

[jtl513]

The way it works, in the real world, is that when an error of whatever magnitude is made by a company to members of the purchasing public, the company is responsible for the error.

But the point the article is making is that a lot of those Monday sales may not have been innocent mistakes by the TAs, but rather an intentional effort to take advantage of what they knew were too-low prices:

"Some of the agencies which had the incorrect rates are outlets whose business is based on selling deeply discounted travel. It appears to me that some of them realized the space was pricing abnormally low, and exploited the pricing mistake by actually promoting the erroneous rate, probably believing Holland America would honor it for them."

 

So why should HAL eat the loss for the TAs greed?

[Navy_Chief]

The way it works, in the real world, is that when an error of whatever magnitude is made by a company to members of the purchasing public, the company is responsible for the error. End of discussion. Holland America is no exception to that rule.

So if it costs a business 10 million dollars for a ticket pricing mistake made by human error, they and all their shareholders should dig down into their pockets and belly up to pay for it? People make mistakes, that's just part of life; machines break down, thats part of life. I'm willing to accept that for what it is and I'll continue to sail HAL. If the folks impacted by this choose to cancel and never sail on HAL again, be my guest; maybe I'll be the one buying those tickets instead. But shame on the TAs that got notified and kept their customers in the dark for weeks, publish those names so I can avoid doing business with them.

[gizmo]

I appreciate the different perspective on this controversial topic. The one area where I think customers could have been harmed by more than a $100 credit is if they had booked nonrefundable airfare or incurred other change fees if they cancelled their cruise.

 

Nonrefundable air fare is not a total loss. You do not get cash back but you do get a voucher to be used within a year.

 

I am sticking with my orignal opinion on this and which was, Hal was responsible and should have honored the prices.

[gizmo]

But the point the article is making is that a lot of those Monday sales may not have been innocent mistakes by the TAs, but rather an intentional effort to take advantage of what they knew were too-low prices:

"Some of the agencies which had the incorrect rates are outlets whose business is based on selling deeply discounted travel. It appears to me that some of them realized the space was pricing abnormally low, and exploited the pricing mistake by actually promoting the erroneous rate, probably believing Holland America would honor it for them."

 

So why should HAL eat the loss for the TAs greed?

 

I do not think the pricing was abnormally low.

[Wilbo]

In our economy the mandate is to make a profit for the shareholders. If HA accepted this loss, one of two things would happen to meet the bottom line.

Reduce services or increase prices in the future.

Reduction of service would not meet the demand of future customers nor would large price increases.

HA did the right thing in this particular case. If you owned HA, what would you do. before you answer, "walk a mile in HA shoes".

[kryos]

There is evidence that this was an honest mistake. Holland America notified all the booking agents immediately - in a matter of days or hours after booking, so it would be exceptional if anyone were actually damaged by this, aside from being disappointed they didn't get the outstanding bargain they thought they did. Holland America is just asking people to pay what was the correct price. If anyone wants to cancel, they can, and there is no penalty.

If Holland America truly notified the travel agents promptly, and it was the travel agents that sat on that info and let their customers be harmed by this, then I agree ... Holland America did nothing wrong by expecting people to pay the right price. And, this article does present another side to the argument ... the fact that the TA's may have been looking out for their own interests by sitting on the information. The TA's stood to lose out on commissions by promptly informing their clients of the pricing error since many of them would have immediately cancelled their booking. But, by waiting until the client had already secured air to the port and had enough time to really get excited about their impending cruise, the TA's increased their likelihood that the clients would just go ahead and pay the difference. The TA's would then make their commission on the sale.

 

Interesting and thought-provoking article.

 

Blue skies ...

 

--rita

[Tricia724]

This is an interesting article, for sure. But to me.....that's what it is. It is not a news story.....no real facts, no quotes, no sources.....just someone who is asking you to accept their conclusions, and the best assurance they give to accuracy is that they are "98% sure" of their statements. A lot of this is plausible, but it lacks authority.

 

I agree that HALs decision was a financial one....somewhere at the top of the line someone decided it was too much money to lose. I wonder whether that person has ever regretted the decision. I'm guessing HAL got more bad publicity than they imagined. And it may harm them in ways they hadn't considered....such as travel agents who got burned and will not recommend the cruiseline or.....worse yet.....will try to talk potential customers into sailing another line.

 

I'm sorry, but I think HAL should have done a better PR job in trying to rectify the problem they created. Even if they felt they couldn't eat the whole difference in fares, I would have had more respect for them if they said: "Look, we made a big mistake, and it's too much for us to absorb. But we'll split the difference with you." That wouldn't have made everyone happy, but it would have been a lot better than appearing arrogant and uncaring and far better than simply throwing a $100 cabin credit at people.

 

I'm still disappointed in the way HAL handled this. I want to think of them as a company with integrity, but they made the mistake and they should have made it right.

[RuthC]

Even if they felt they couldn't eat the whole difference in fares, I would have had more respect for them if they said: "Look, we made a big mistake, and it's too much for us to absorb. But we'll split the difference with you." That wouldn't have made everyone happy, ...

I know that if I had booked one of those cruises, and had not had the benefit of the error and HAL did "split the difference" I would have been one of those unhappy people.

Some people ended up not getting the benefit of a mistake, and paying the rate charged to everyone else. Then they got an on-board credit that others didn't get. They still came out ahead.

There were other people to consider in this decision---the ones who were not charged enough for their cruise weren't the only ones to think about.

[serendipity1499]

I know that if I had booked one of those cruises, and had not had the benefit of the error and HAL did "split the difference" I would have been one of those unhappy people.

 

Some people ended up not getting the benefit of a mistake, and paying the rate charged to everyone else. Then they got an on-board credit that others didn't get. They still came out ahead.

 

There were other people to consider in this decision---the ones who were not charged enough for their cruise weren't the only ones to think about.

 

The voice of reason..I couldn't agree more Ruth..

 

Gizmo says "I do not think the pricing was abnormally low"

 

Gizmo, you must be kidding..Do you really believe that a fare which is approx. $1000 less than the normal rate is not abnormally low...What then do you consider to be "abnormally low"?:rolleyes:

[Grumpy1]

Another point that should be considered: If HAL had decided to eat the difference and say nothing, how many cruisers that had booked at the correct rate would have been screaming about being overcharged? After all, the cruises were six months out, much to early to be running "last minute" sales. Sure, everyone would applaud HAL for "doing the right thing" and honoring the too low price, but there would be a very vocal bunch demanding that HAL "do the right thing" and reduce their fare to match. And that group would also be screaming that they will never sail with HAL again. There was no way for HAL to win in that situation. They just had to try to limit the losses. I do think, though, that they could have handled the PR side a lot better.

[hammybee]

I appreciate the different perspective on this controversial topic. The one area where I think customers could have been harmed by more than a $100 credit is if they had booked nonrefundable airfare or incurred other change fees if they cancelled their cruise.

 

 

Those who immediately bought air passage were handled on a case by case basis. I do not think anyone suffered out of pocket.

[hammybee]

Going back to the begining of this fine mess, it was apaprent that the original error was complicated by the lack of downstream notification to the consumer and this seemed to go on for weeks on end. And clearly T/As were in the middle of it. Some pax recieved relatively prompt notification while others had no idea. To this day, there are still people claiming that HAL has done them wrong in the "sticky" that CC maintains on the top of this board.

 

In all my years, lurking and posting on these boards, this is the first time that I have observed CC exacerbate an already difficut situation. That human onboard error cause a serious list on Princess last year, with mayhem, injuries and damage was quickly forgotten, yet this particular one-off situation is not allowed to die. Given the sponsorship of these boards, suggests there is more at work here than may be obvious to the most causal of observer. There seems to be an almost vindictive quality to it.

 

It's a darn shame HAL chose to not make public the story, " A mistake has been made. X cabins were sold to Y pax at the wrong price and we are giving all Y pax $100OBC as acknowledgement of their disappointment. We regret, blah,blah,blah."

[Old As Dirt Mom]

.......

 

In all my years, lurking and posting on these boards, this is the first time that I have observed CC exacerbate an already difficut situation. That human onboard error cause a serious list on Princess last year, with mayhem, injuries and damage was quickly forgotten, yet this particular one-off situation is not allowed to die. Given the sponsorship of these boards, suggests there is more at work here than may be obvious to the most causal of observer. There seems to be an almost vindictive quality to it........

 

 

I agree.

[Sopwith]

The way it works, in the real world, is that when an error of whatever magnitude is made by a company to members of the purchasing public, the company is responsible for the error. End of discussion. Holland America is no exception to that rule.

 

 

 

Any way you cut it, there ain't no such thing as a free lunch.

[Funny Daddy]

The way it works, in the real world, is that when an error of whatever magnitude is made by a company to members of the purchasing public, the company is responsible for the error. End of discussion. Holland America is no exception to that rule.

 

I am embarking upon my third cruise with Holland America on March 4. It will be my last. I have sailed with HAL because of the places they go. The customer service is, in this one customer's opinion, nonexistent. That has been true for us, on board the ships and trying to deal with HAL direct. I have never filed a complaint of any kind because I learned early on that it was useless to waste my time doing so. I have been over charged, lied to, cleaned my own bathtub and sink on board, never received room service when ordered, treated rudely without reason, and have left mandatory tips in place for personnel that I never saw.

 

I have done the above because HAL sailed where I wanted to go. I do believe that I am only one of many who will take the same silent action. Perhaps when enough cabins remain empty, the message will become clear to HAL.

 

As a public company, they do have a responsibility to perform a minimal level of service.

 

On a more positive note, I want to thank those of you who posted the change of ports for the Rotterdam, March 4, South American cruise. I have read these boards for years. This is my first time to respond. I was able to change my tours without it costing too awfully much money. I am still waiting to be notified of the changes. I have asked my TA and HAL. HAL simply states they can not provide me with any information since I did not book directly with them. OK. My TA says HAL never notifed them of the changes. The only "official" place it is recorded is on HAL's shore excursion site at least that I am aware of.

 

Happy continued cruising to all. We love it and will contiue on another line.

:) :p :D :rolleyes: ;)

 

 

Glad to see you go, I have done close 300 days and love them all, I am sure you will find a good cruise like on the RCL, NCL, Carnivore etc. Hope your liver will enjoy it too!! Rgds PD!

[hammybee]

Glad to see you go, I have done close 300 days and love them all, I am sure you will find a good cruise like on the RCL, NCL, Carnivore etc. Hope your liver will enjoy it too!! Rgds PD!

 

Look who got a name change!!!!

[NoNoNanette]

Look who got a name change!!!!

 

And some folks thought that I was abrasive! ;)

 

Who is it?

[RuthC]

Look who got a name change!!!!

Apparently not his choice, either. Note that he's still signing off as "PD".

In only one day as I member he certainly has brought himself to our attention. :rolleyes:

[RevNeal]

Any way you cut it, there ain't no such thing as a free lunch.

 

TANSTAAFL

 

Heinlein was right. :)

[RevNeal]

Apparently not his choice, either. Note that he's still signing off as "PD".

In only one day as I member he certainly has brought himself to our attention. :rolleyes:

 

Who is PD?

[codyody]

Oh, Rev Neal, Heinlein was right about sooooo many things.:D