Marie C. Cassandra

It’s come to light that Ctrip have been sneaking in a lot of additional fees in their bookings. For the full story you can read more:

•  Chinese OTAs Facing Pressure over ‘Fraudulent’ Practices via Jing Travel
• Ticketing clean-up: Bundle sales fallout forces Ctrip to reassess business practices via Global Times 
• Complaints involving online travel agencies’ pricing practices heat up via Ecns.cn

Or you can take get the gist from this snippet from the Ecns.cn article:

 Ctrip can earn 10 billion yuan ($1.5 billion) per year by misleading consumers in the booking system and charging default fees.

For instance, users have been charged fees for flight insurance by default or misled into paying for services they didn’t want such as shuttle bus pick-ups or VIP lounges at airports, because sometimes the button to cancel an item in a package tour can be hard to find. In other cases, users find they are forced to restart the booking process, which is not user-friendly.

As a stalwart believer in customer centric business practices and product design, I get a sick amount of pleasure and vindication when businesses land in hot water for cheating customers. It deepens my pride in designing the transparent “What You See is What You Pay” pricing into the agoda app. But with Ctrip it’s personal. At the same time that we were trying to drive forward our customer centric approach we were also (like any smart travel market) ferociously focused on China expansion. So we were also fighting the pervasive belief that to capture the Chinese market we should imitate Ctrip’s user experience (based on the phallacy that “it’s so popular because it’s what Chinese consumers like/want”).

But here’s my fear. These stories come out and there’s a “public backlash”. Ok, maybe revenue dips a tad. At best/worst the legislation actually goes through and they get fined. But is it actually a meaningful longterm consequence? Do the bigwhigs in power who make these decisions ever face real losses that make them regret these decisions? Or does the temporary dip (that only occur in the cases where they get ‘caught’) not even pale in comparison to the millions in the bank they earned from such practices. Then time marches on and people forget and you’ve got 10 other shady cashcows that cheat customers pumping money into their accounts so they just weather the storm sleeping like a baby on their piles of cash? If you have analysis or concrete examples that show the measure of backlash on shady business practices, please share!