Hotels4U loses over £120,000 in social media campaign
Thomas Cook-owned Hotels4U suspended an ill-thought out one-day discount campaign after losing more than £120,000 within the first few hours of the launch.
The company told the Advertising Standards Authority (ASA) that it had grossly underestimated the amount of bookings it would attract via the promotion on social media sites Facebook and Twitter.
Launched to persuade people to book on Christmas Day, the campaign offered users £50 off hotel bookings made that day. Hotels4U had anticipated about 570 bookings – 10 times more than on December 25 2010 – but it had attracted more than 2,600 by 6.30 am on Christmas Day.
As the majority of these had a sales value of less than £10 after applying the £50 discount, Hotels4U had generated a loss of £120,000.
At 7am it suspended the promotion to investigate why so many bookings had been made so quickly and at such a loss.
By 10am, it found that "a significant" number of customers had made duplicate bookings, in breach of the terms and conditions of the promotion" and it suspected that a large number of the bookings, which had been made before 7am by individuals living in the Far East, were fraudulent.
The promotion was reinstated at 11am but during the following hour a further 1,000 bookings were made. Hotels4U said it could not continue to operate the promotion for the remainder of the day in view of the level of booking activity, the number of duplicate or fraudulent bookings and the potential financial losses to the company, and they therefore closed the promotion early.
Hotels4U said it did not believe it was viable to implement measures to prevent multiple bookings for the purposes of a one-day promotion, since the time and cost involved in altering the website booking system "would have far outweighed any financial benefits gained from the promotion".
The ASA investigated following complaints from 19 customers who had tried to redeem their vouchers but found the promotion had ended early.
Hotels4U said it regretted ending the promotion early, but believed it had no alternative. However, the ASA upheld the complaint, saying that the number of fraudulent or duplicate bookings did not justify ending the promotion early. It ordered the company to take care future promotions are administered fairly and not to end them early "unless under circumstances outside their reasonable control".
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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