Orbitz went into damage-control mode after the Wall Street Journal reported that the online travel agency is testing delivery of different search results to customers based on whether they perform the search on a Mac computer or a Windows PC.
The Twittersphere and blogosphere, followed by major news outlets, erupted with outrage at the report, but much of the reaction was based on a thorough misreading of the Wall Street Journal article.
The article said that since Mac users are 40% more likely to book four- and five-star hotels and spend as much as 30% more a night on hotels, Orbitz positions pricier hotels higher up in its search results for Mac users than it does for PC users.
That’s what the article said. But it’s not what many readers thought it said.
Making matters worse
To make things even more confusing, it’s not what Orbitz is actually doing.
In the Twitter universe and the blogosphere, Mac users’ willingness to pay up to 30% more for a room was translated as “a 30% markup by Orbitz” in the minds of some readers.
A difference in placement on hotel search results morphed into “higher prices on hotels, air fares and packages for Mac users.”
Contributing to misinterpretations was the fact that on the Wall Street Journal's website most of the article was concealed behind wsj.com’s paywall, the point at which a reader must subscribe in order to read beyond the first two paragraphs.
Barney Harford, Orbitz’s chief executive officer, told Travel Market Report that the paywall greatly exacerbated the misunderstanding, and he was gratified when the Journal took it down.
Recommendation module only
Harford also noted that the algorithm does not affect primary search results. It is applied to the “recommendation module” that appears on a hotel details page. That’s the box that says, “Recommendations for you – customers who viewed [hotel name] also booked these hotels.”
But even if Orbitz were to apply the algorithm to the primary search page, customers can control how results are displayed. If a Mac user is down on his luck, for example, he can sort the results by price with a click of the mouse.
Experimenting with data points
Harford said the Mac-PC factor is just one of many data points with which Orbitz is experimenting.
For example, if a hotel’s price suddenly shoots up higher than comparable properties in its market, “we’ll push it down in the search results,” he said. Conversely, if a hotel is running a sale, it will be pushed up.
“We look at a myriad of different things,” Harford said. “Fundamentally, we are using technology to make the hotel shopping experience better.”
Is it unethical?
Meanwhile, another discussion was going on in the blogosphere, in the Twitter universe and on television: Is Orbitz doing something wrong? Is it misleading customers by making different recommendations to different customers based on different data points? Is it betraying an implied promise to be the one-stop shop for cheap travel?
Ed Bott, a blogger for ZDNet, called Orbitz’s action “sneaky web tracking” and said companies should “ask permission before they target you.”
In fact, what Orbitz is testing is relatively tame compared to the ways in which other companies are using what is known as “big data.”
Big data, which is fast becoming a hot topic in the travel technology world, refers to the full data trail that consumers leave all over the Internet – including their frequent flier information, buying habits, Facebook conversations and Tweets.
Most companies don’t yet have a handle on big data, but it is on many a merchant’s wish list.
. . . or just plain creepy?
There’s little doubt that big data has its dark side, or at least a high potential for the “creepiness factor” – the feeling that a company knows too much about you.
Case in point: Target infamously blundered when it concluded that a teenage girl was pregnant from her recent purchases. Much to the dismay of her unsuspecting parents, Target began sending the teen coupons for disposable diapers and other baby paraphernalia.
‘Penalized for being smart’
Harford said Orbitz isn’t even going as far as making those kinds of targeted offers.
“It’s about how you decide what hotel to bring to a customer’s attention – what is most relevant and what is the best deal. I’m very comfortable with what we are doing,” he said.
Henry Harteveldt, co-founder of Atmosphere Research Group, said he saw nothing wrong with Orbitz factoring in any data points that help it sell relevant products to customers. “Orbitz is being penalized for being smart,” he said.
“Orbitz isn’t differentiating on price,” Harteveldt added. “That would concern me. They’re not hiding anything or suppressing any information.”
Doesn’t violate privacy
Fred Bean, president and chief executive officer of Rebel Travel Corp., a hospitality technology and distribution company, said Orbitz is “not infringing on anyone’s privacy. It’s really doing the consumer a service, giving them what is most likely to be of interest to them.”
And it’s really nothing new, he noted. “If somebody is taking your buying behavior into account, it’s no different from what Amazon does. It’s not like anybody is breaking new ground here.”