Orbitz’ Harford: Quoting a total price is “a strategic priority for us”

Barney OrbitzBarney Harford is the president and chief executive officer of Orbitz Worldwide. One of the first things he did when he took over eight months ago was to institute a “total” price for hotel rooms, making it the first of the major online travel agencies to do so. He also launched a campaign to lift travel restrictions to Cuba imposed by the American government during the Cold War. I asked Harford why he decided to take on prices and politics so early in his tenure.

Your company is pushing the government to lift travel restrictions to Cuba with a new site called Open Cuba. Why is this issue important to you? Why should it be important to travelers?

We believe it’s important to be engaged in the social issues of the day. We promoted lesbian and gay travel as far back as 2002. We were on the cutting edge of eco-tourism.

The management team and I shared a belief that after 50 years of ban on travel to Cuba [by Americans] it was time for a change. It doesn’t make sense for Americans to not have a right to travel to a country that is so close. Travel can bring people together. We believe there’s an immense opportunity to bring people together, to create progress.

We have urged people to sign a petition to overturn the ban on travel to Cuba. We’ve had about 95,000 people sign it. There’s broad, grassroots support that’s been indicated on this issues. We hope to be able to play an important role in removing the ban.

You’ve made a case for Americans visiting Cuba, but do you think Cuba is ready for a surge in American visitors?

Cuba already has a strong and vibrant tourism industry.There are significant numbers of visitors from Europe and Canada. If and when the ban is removed, there will be a significant expansion of [Cuba’s tourism] infrastructure. I think there will be adequate preparation for the introduction of Americans.

Let’s stay south of the border for a second. How has swine flu changed the way Orbitz does business? What do you plan to handle this fall’s likely swine flu outbreaks?

We saw a short-term impact on our business [this spring during the outbreak in Mexico]. The important message here for travelers is that we are working with the Centers for Disease Control and World Health Organization on their communications, and that their messaging to our customers is based on sound science. Mexico is an important strategic partner, and we worked with tourism authorities there to work through these issues to help them recover. It’s important to inform travelers of the real issues, and not cause mass hysteria.

Some of our customers wanted to cancel, and we worked with our partners and suppliers to accommodate them. That’s what we’re here for. We helped them postpone their trips or go on a different itinerary to another destination.

There was a lot of concern about the outbreak this spring. We now know that [Swine Flu] is a much more benign flu. We certainly have plans in place, so that if anything does uptick later in the year, we’ll be much better prepared.

What about airline policies? The Air Transport Association just published a Q&A on its site, basically saying that people shouldn’t fly when they’re sick. But airlines have strict rules about refunds, and they’re happy to keep your money, too. What can a company like Orbitz do?

We work closely with our supply partners on policies, and making sure that those policies are as clearly laid out before a booking as possible. We work with our suppliers on a case-by-case basis, to make sure that an exception is appropriate.

Airlines and hotels need certainty – they need heads in beds. I think many suppliers, during the last swine flu outbreaks, were flexible. But you raise a good point. If you stay home, what will an airline do to reaccommodate you? We would take this up on behalf of our customer.

Earlier this year, you modified the way Orbitz quotes hotel prices. Can you explain why you moved to a “total price” system?

It’s a strategic priority for us. Booking a hotel is still very complicated. There’s so much that we believe can still be done. We can make it easier for a customer to book a trip.

I couldn’t believe, when I arrived at Orbitz, that the major online agencies were forcing customers to select their hotel before they knew what it would cost, in total. I told my team, “We have to do that better.” Now, on the initial page, we’re showing taxes and fees.

Why hasn’t “total price” caught on among other travel agencies?

It really does a disservice to the customer when you don’t show a total price. I think Expedia and Travelocity can do better. This is not a technological challenge. The customer should have adequate information. It is not being as upfront with the customer as they should be.

When I think of a “total” price, I think of one price — and only one — with no fine print. Yet I see that there are still two rates being quoted on Orbitz: a base rate, which is boldfaced, and one that includes taxes and fees, which is in regular type. Are there any plans to offer just one price, where what you see is what you get?

It’s a competitive industry. We want to move the ball forward. There’s a broad industry trend, and there’s a much greater focus on the base rate. All of the players – the airlines, too – are drawing attention to the base rate. That’s the competitive landscape.

In terms of the unbundling of fares, I can understand what the airlines are doing. They want to offer the most attractive prices. It makes it more complex. We talk with the airlines a lot to get them to make the information [about fees] available to us. But you’re right.

It’s only a matter of time before airlines start quoting zero fares. How would that affect your customers?

I think what’s happening is that the airlines are unbundling their services. I agree, it makes it a much more complex purchase evaluation process. One airline may charge for luggage, one won’t. We’re encouraging our partners to make information [about fees] available to us. We don’t want to go into too much detail about features that we’re going to launch.

You’ve cut booking fees recently, as have other online travel agencies. Why did you decide to do that? And how much longer do you expect to keep it that way?

When we looked at 2009, we saw a weak travel market, and we saw the opportunity to make our product more compelling. We removed our flight booking fees, and we dramatically cut our hotel booking fees. At this stage, you won’t be able to get a hotel cheaper anywhere than through Orbitz.com. We intend to be competitive in the marketplace. We believe these cuts are going to be permanent.

I notice Orbitz doesn’t have the customer service guarantees that the other online travel agencies have. Why not?

We have a very strong commitment to making sure that you have a good experience. We call it TLC – Tender Loving Care. We’re constantly monitoring the skies and proactively reaching out to [our customers]. If a customer needs help, that’s what we’re there for. When you book through Orbitz, you’re getting the benefit of our scale in working with our suppliers. When you book with us, you know you’re going to get a good experience. Customer service is something we take very seriously.

Why should travelers book through an online travel agency like Orbitz, as opposed to directly or through a human travel agent?

The shift in bookings to online booking sector has been really dramatic since the booking fees have been removed. I think the online travel agency’s value proposition is getting better and better. There’s a lot of reasons travelers are booking online. There are a lot of things we have that travel agents don’t have. It used to be a painful process to book a trip – you had to pick up the phone and book each part of your trip [separately].

You can also save a lot of money by booking your hotel and airline ticket together.

We certainly do recognize that for some more complex purchases, [customers] have questions that they want to raise and resolve before their booking. That’s one of the things a travel agent can provide. We have a strong focus on telesales, many of whom are destination specialists. We use sophisticated call routing technologies to help people who have questions. It’s an area of strategic focus for us. We want to make it easier for people to talk with us.

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