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Published on Wednesday, April 25, 2012

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

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  • Sharaton Warsaw for 6,85 GBP

    I was one of this lucky clients, who were able to book. It took a while and they didn't cxcl my one night reservation. I have paid 6,85 GBP for Superior room in 5* Sheraton Warsaw Hotel with breakfast included. But I have to say, this all promotion was one big mess. I think they have lost not only GBP 120 000, but quite a few existing or potentially new customers. Everybody could see that Hotels4U was not prepared at all.

    By Marek Maslowiec, Saturday, April 28, 2012

  • victim of Hotels4u

    I was one of the genuine customers who took advantage of this Christmas Day offer and ended up out of pocket. They gave their excuses for withdrawing the offer on the same day but why didn't they shut down the booking site? Instead they took the full price costs from loyal customers like me, so how come they claim to have had losses of £120.000 !!! My booking was for 27 December and although they offered a refund, I didnt have the opportunity to do this as I didnt have enough time to book another hotal at such short notice. When I complained on my return from the holiday I received the same excuse and no offer of a discount on another booking. I have used h4u for many years but since then would not waste my hard earned money with them again. If the ATA found them guilty, why wasnt compensation ordered for inocent people like myself who ended up paying double what I expected?

    By chris holter, Friday, April 27, 2012

  • We've forgotten customer lifetime value & costs vs PPC

    I question the sums here. For a start the campaign shows the incredible speed at which word of mouth worked globally. Does it factor in the value of all the Facebook shares and the awareness that the campaign created? The only mistake which everyone can learn from was to specify a minimum spend. If we look at the lifetime value of a customer they could book again. If I find a hotel booking engine I like, I will use it again. Are we really doing our sums right when we calculate ROI on our travel campaigns? If you measure the ROI versus PPC rates at such a peak sales time they could still generate an ROI if they keep those fans and get them to book again. CRM is the big differentiator for ROI on social media. Think long term customer engagement and lifetime value and not campaign volumes to get the best ROI from social media.

    By Kathryn Bullock, Wednesday, April 25, 2012

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