There is a lot of talk in the news these days about the difficulties facing small business owners around the world. Nowhere are these difficulties felt as deeply as in the travel industry. The rapid growth of the control of travel by big business with its multi-billion-dollar internet and advertising power has caused many small travel business owners to be pushed aside. As a result the consumer ends up with limited access to travel choices while the Mom and Pop hotel or tour or shop ends up on the brink of extinction. We know this firsthand, as we are one of those small businesses being unfairly crushed under the weight of travel industry giant Expedia. In fact we think Expedia is trying to put us, and small independent businesses like ours, out of business. And here’s why:

Expedia and its many affiliates, including Hotels.com and Venere.com, invite people to come to their sites to book our hotel, the Luna Blue Hotel in Playa del Carmen Mexico. Yet when people get to these websites they are told that our hotel is completely occupied for all dates now and in the future. If someone calls on the telephone, they are told that our hotel is going out of business! They are then directed to book another more expensive hotel, which provides Expedia greater commission. It seems that Expedia and its affiliates use small hotels like ours to attract people to their sites so they can get those people to book with bigger resorts. It is the classic “bait and switch” scam.

We think what Expedia is doing is completely outrageous, and we think you should know the whole story:

Living the Dream

Some years ago we fell in love with Mexico’s Caribbean coast. We left our home, quit our jobs and headed south. We had scrimped and saved and put our entire life savings into buying a small, rundown backpacker hotel in Playa del Carmen. It wasn’t anything fancy. It wasn’t a part of some chain or franchise. It was 18 rooms and a garden on a side street a few blocks from the beach. But it was now ours, and we loved it.

The plan was to turn this property into our vision of a slice of paradise and to live the good life as innkeepers on the Caribbean Sea. That’s what happened…for a while. And not to toot our own horns, but we were a success. We won some awards, received great reviews and filled our rooms. We renamed it the Luna Blue Hotel, and we’re quite proud of what it has become.

It wasn’t always smooth sailing of course. The swine flu scare and the hysteria over central Mexico’s drug wars really did some damage to tourism in this part of the world. But we held on and weathered the rough spots. We weren’t going to give up. This was not just our life…it was our dream. We put all of our money, time and heart into making it work. Then we made a mistake. We signed up with Expedia.

Expedia

If you are not already familiar with Expedia let us give you some background. Expedia, Inc. is the world’s largest online travel agency. People can use their various websites (and they have many affiliated companies) to book a room, a flight or a complete travel package. The company now operates in 60 countries around the world. When you want to know what we mean when we talk about the “Big Business” of travel, just look at Expedia. Besides Expedia.com, Hotels.com, Hotwire and Venere, Expedia also owns Egencia (the world’s fifth largest corporate travel company), eLong (China’s second largest online travel company); Expedia Local Expert (an online concierge company in 18 markets worldwide), Classic Vacations (a leading luxury travel specialist) and much more. It also has tight corporate ties to industry giants Ticketmaster and TripAdvisor.

Expedia has an office in Cancun and offers its services to the hotels along the Riviera Maya where we live. A year ago we were visited by the Expedia Market Manager for this area, Javier Polanco. Expedia, he told us, could help us recover some of the business we had lost in the lean years. It wasn’t cheap, as Expedia takes 25 % of every booking made through their sites–a fact that hotels are forbidden by Expedia to disclose to guests. But we figured that if it brought us more business it would be worth it. So…we signed on the dotted line and became “partners” with Expedia. However we soon discovered that Expedia had a different vision of a partnership than we did.

“That’s Not the Room we Reserved!”

Almost immediately we began to have trouble with our new “partners.” As requested, we provided Expedia with a long, detailed list describing our rooms, amenities and property to use on their website. Yet that list was completely ignored by Expedia when putting together a profile of our hotel. Many of the descriptions of our hotel and rooms Expedia posted were completely wrong. We repeatedly emailed the “content department,” which was in charge of the website details, asking them to make the changes necessary to correct the problems. However the response to our emails was almost non-existent.

As the months passed, every so often someone in the content department would rewrite our Expedia listing to correct one inaccuracy and in the process add several new problems. More often than not they simply ignored us. As a result, guests would arrive at our hotel having made a reservation through Expedia or Hotels.com and find the room they reserved to be nothing like the erroneous description on Expedia’s website. Sometimes the guest would roll with the punches and accept there had been a problem with Expedia’s site. However other times the guests were angry and demanded an upgrade, or would even leave the hotel.

While this greatly affected our hotel’s reputation, Expedia didn’t seem to care. We began to realize that our “partner” Expedia operated on a mass production scale: Their policy seemed to be keep the inventory of available rooms high enough from a large number of hotels, and the monetary return would compensate for growing customer dissatisfaction over a lack of service.

Our Rooms Suddenly Disappear from Expedia

Eventually our Expedia Market Manager Javier Polanco was promoted. All that inventory the big hotels were loading must have reflected well on him. We were told that there was a new Market Manager in Cancun, Judith Monroy. We thought that maybe with a new representative at Expedia things might change for us. And we were right; they did change. They got worse.

One day we noticed our Expedia bookings had suddenly stopped. We went to Expedia’s site and saw the problem right away. The links on our Expedia and Hotels.com pages were broken. The pictures and descriptions of our hotel rooms were gone. They used to be incorrect, but now they had vanished completely! No wonder people stopped booking our hotel through these websites. Potential guests could not find information about our rooms or see what they looked like, and so they quickly moved on and reserved at other hotels. Our bookings came to an abrupt halt. We called Judith. Then we e-mailed her. Then we called again. There was no response whatsoever for weeks. The only response we received was a boilerplate email from Judith telling us to load more inventory!

“It Won’t EVER be Fixed”

Finally we were told the problem had been reported to the Content department. Two weeks later we were told the problem was an IT problem and that the IT department had been notified. All this time our pages remained broken. We kept asking, “What is the point of being on Expedia if no one can see our rooms?” We were told there was a system-wide bug and that many hotels were affected (we found out later this wasn’t true) and that the problem would be fixed…in one month. We waited.

Of course, one month came and went and our Expedia pages were still not working. This time we called Javier, who emphatically told us that the page would never be fixed, and that the links would always be broken. Then he laughed and said that it wasn’t his problem. We told him we were tired of the lies and the stalling and we demanded some sort of helpful response.

If You Complain…We’ll Cut You Off

In response to our demand that Expedia help us, we received an e-mail from Pablo Castro, Javier and Judith’s boss and the Manager for Expedia’s Latin America-based hotels. Pablo wrote to tell us he was going to disable our page at Javier’s request because of our bad attitude but that if we would like to meet with him in Cancun perhaps we could resolve the situation. We wrote back immediately to say we would like very much to meet with him, and asked him to name the time and place. We waited for a response. And waited. And waited. We wrote a second time asking when and where we should meet. Pablo never responded to us and never met with us. To this day we’ve never heard another word from him.

We wondered how long we would stay in business if we treated people like Expedia was treating us. Imagine if a guest checked into our hotel and found that the toilet didn’t work or that the bed was missing and we responded by telling him he had to leave the hotel because he was complaining. Is that really how people in the travel business should act? We certainly don’t think so.

Things Get Better…and Then Much Worse

We thought our time with Expedia had come to an end—and that was okay with us—when suddenly we started getting a flood of reservations from them. What the heck was happening? We went to the Expedia site and couldn’t believe it…the page was fixed and working. After all the months of having it broken, after being told it could never be fixed, after being threatened with expulsion from Expedia for complaining about lack of service, the page was back up and working.

But Expedia wasn’t done punishing us yet. Within a few days we received an e-mail from a guest with a reservation booked through Hotels.com. Why, the woman wanted to know, had we cancelled her reservation? We hadn’t. Judith had! Without our knowledge or consent, our Expedia Market Manager cancelled ALL of our existing Expedia reservations, including ones people had made months before, telling the guests that their reservations were being cancelled because we had no available rooms. This was of course not true.

Expedia Says the Luna Blue has No Availability…Ever

Instead of leaving our page up and finally working, or even disabling or removing our hotel’s Expedia page as they had said they would do, the Cancun office did something much worse: They set our hotel page on Expedia’s website to show that we never had any availability for any room at any time. What this meant was anytime anyone looked at our hotel on Expedia, Hotels.com or Venere.com they saw a message saying there was no availability for the requested dates. Any dates. Ever!

You have to understand Expedia’s reach and power to know how bad this can be for a small hotel like ours. Expedia has agreements throughout the world and all over the internet to have travel sites link to their main page. If you click to see the Luna Blue Hotel rates and availability on Hotels.com, Venere.com, Lonelyplanet.com, Yahootravel.com, Travelpod.com, Holidaywatchdog.com, Trivago.com, Cleartrip.com and other similar sites you will be informed via link to Expedia that the Luna Blue Hotel has no availability ever, and it will suggest other more expensive hotels. So the lie manufactured by a couple of people in Expedia’s Cancun office is now spread across the internet. Throughout the web, Expedia is telling people they can’t get a room at the Luna Blue, so those people look elsewhere. You don’t have to be an expert in the travel industry to know how incredibly damaging and unfair this is.

And while it may be unfair, it seems to be the standard operating procedure for Expedia. The country of France recently fined Expedia for this exact scam…telling people a hotel had no availability in order to get them to book with other more expensive properties: Expedia Hit With Major Fine in France Over Misleading Marketing. But apparently being fined wasn’t enough to make them stop this egregious behavior elsewhere.

Expedia Demands That We Pay Them to Relocate Our Guests to Other Hotels!

Not content to simply deny us reservations, Judith and the Cancun gang went further. A few days later we were contacted by Expedia’s Collections department and told we owed an exorbitant amount of money for “relocation fees.” Here’s how it works normally: an Expedia partner hotel agrees that if it cancels an Expedia generated reservation because the hotel cannot accommodate a guest, Expedia will then book the guest into another hotel in the area and charge any difference in cost to the original hotel. Judith, after secretly cancelling our reservations and telling the guests we had no room (a lie), was then booking the guests (our guests… people who wanted to stay at our hotel) into other bigger, more expensive hotels and then having Expedia bill us the cost–costs sometimes as much as three times what our room rates were! As you might imagine we were stunned and angry. Then it got even worse.

And Finally…Expedia’s Biggest Lie Yet

We saved the most outrageous for last.

After everything Expedia had done to block guests from making reservations at our hotel, some people still wouldn’t take no for an answer. Some guests figured, quite reasonably, that no hotel is 100% full for every day in the conceivable future. They wondered if there was a problem with Expedia’s page. So they called Expedia’s customer service telephone line to try and book at our hotel. Expedia then told those fine folks that “the Luna Blue Hotel is going out of business” and that’s why there were no rooms available there. We know this because the guests who were told this lie by Expedia then contacted us directly.

It seems that Expedia will stop at nothing to punish a small independent Mom and Pop hotel which had the audacity to ask to be treated fairly. And that’s how it stands today. Expedia refuses to acknowledge our calls and e-mails and refuses to either open up our Expedia page to reservations or take it down, but instead continues to spread the lies across the internet that we are going out of business and refusing to take reservations.

How Can a Small Business Protect Itself from the Dishonest Actions of a Goliath like Expedia?

In today’s world, a corporate Goliath like Expedia has way too much power to be worried about stones thrown by small business owners like us. We have done what we can to explore our options by talking with attorneys here in Mexico and in the US as well as with travel experts and government agencies in both countries. The advice we have received has been appreciated, but truthfully there are few options available to us.

It is unrealistic for us to bring a legal action against Expedia either in the US or in Mexico. The money necessary to hire lawyers to pursue the cases wouldn’t even be missed by Expedia, but would probably bankrupt us.

We have also been told to file complaints with the US Federal Trade Commission and with various federal and local watchdog agencies here in Mexico, including the Ministry of Tourism. We are doing all of that, but we are realistic about the chances of any results or relief in the near future. In the meantime the damage to our small business by Expedia continues.

If you’re a small hotel thinking of doing business with Expedia, think long and hard before making that commitment. If you are already doing business with Expedia, we hope you learn from our experiences here and tread carefully whenever you complain to them, lest you suffer a similar fate.

Spreading the Word

In the end we are really left with only one way to combat Expedia’s misconduct…telling the truth. And we are going to offer that truth to whoever wants to listen. We will tell our story to our friends, return guests, newsletter readers and fans of our blog and Facebook page. We will talk to other small business owners and hotel associations here in Mexico to warn them not to deal with the Cancun office of Expedia unless they want to be threatened with a fate like ours. And we will pass our story along to whoever in the travel industry will listen.

What we are trying to do here is to educate the public…the people who travel…the people who spend their very hard earned money on that one or two weeks of vacation they get each year. Those folks shouldn’t be lied to. Those folks shouldn’t have some pre-set website decide for them what kind of vacation they should take or what choices are available. The big boys in the travel world want to limit the public’s access to only those resources they market and can make a profit on. They would rather the paying public not even have a chance to consider the independent vendor. In our opinion, that’s unfair to those of us who are small business owners, and it’s unfair to the people just wanting to plan a nice vacation.

And so we have told our story here and we hope it opens some people’s eyes. Please feel free to pass it along if you know anyone who might be interested.

What Can You Do to Protect Yourself from Being Abused by Expedia?

Most importantly: don’t use Expedia.com, Hotels.com, Venere.com or any of their affiliated websites! First of all they have a well-deserved reputation for bad customer service. Just Google the words “Expedia bad customer service” and see what comes up. Secondly they do not offer discounted rates as many claim. Many people believe that Expedia will offer better rates for a hotel room that the hotel does. That is not true. Expedia offers the hotel room at the same price as the property. Expedia gets a large percentage of what you pay for the room. Why would they give it to you cheaper? And why would a hotel offer a lower price on Expedia when they are already paying them a 25% commission? Obviously hotels save that 25% when you book directly with them, so why would they encourage you to book through a middleman by discounting their own prices on those sites? They don’t. But Expedia doesn’t want you to know that.

Also, remember that Expedia and other travel websites offer a limited number of hotels and rooms. Not all hotels list with Expedia, and those that do rarely list all their available rooms on the Expedia site (for the reason listed above.) For the most availability, best prices and service, always book directly with a hotel. For more tips on how to have the vacation you choose, read 5 Reasons Not to Book Hotels Using Expedia, Hotels.com or Hotwire.



And finally, if you need help in planning a vacation or finding travel choices, either use the internet to do the research or go to a reputable travel agent. Don’t rely on a mammoth bureaucracy to understand what will be the best vacation for you. It’s your money, time and vacation. Don’t let somebody else make the plans…do it yourself!

The Luna Blue Hotel and Bar

As for our own future, we are not going to be discouraged or intimidated by Expedia’s bad behavior. We are not giving up on our business just because some industry giant tells us to. We are still living the dream here on the edge of the Caribbean Sea and still running one of the finest small boutique hotels in Mexico’s Mayan Riviera.

If you would like to know more about our hotel just visit our website at http://www.lunabluehotel.com. You can book directly with us. We would love to have you as our guests and show you the wonders of our little slice of paradise.

Thank you for taking the time to read our story. And happy travels to you all.

Tony & Cheri

For an update on what has happened since we posted this,

please take a look at our latest blog entry:

12/28/12: The Verge, one of the internet’s largest technology and news media networks, has just published a story regarding our dispute with Expedia. The Verge’s reporter, Adrianne Jeffries, contacted Expedia and gave them a chance to tell their side of the story. As you can see from the article, their response was that they no longer did business with the Luna Blue Hotel. So the question remains: If they are not doing business with us, why are they tying up the internet with dozens of sites claiming that they have booking rights to the Luna Blue but that we are completley full? We’ll explore that soon. In the meantime, we ask that you please take a look at the Verge’s article, One Small Hotel’s Long Nightmare with Expedia.