Marginal Revolution: $3 room nights at the Hilton Tokyo

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$3 room nights at the Hilton Tokyo

I just booked an executive room at the Hilton Tokyo for $3 a night on Expedia. The rate includes breakfast. (The rate on Hilton's website appears to be ~ US$300 per night.)

Mistake fares and hotel rates happen all the time. The easiest way to learn about them is to sign up for emails from FareAlert.

Usually there's a keystroke error somewhere and boom... One of my favorites a few years ago was a $55 refundable/changeable business class ticket to Puerta Vallarta. While I was laying on the beach at the Westin there I missed British Airways' $20 fares from the U.S. to anywhere in Europe. Many of the fares show up at Flyertalk.com in the "Mileage Run" forum, and are then sent out by mass email on FareAlert. It's been covered extensively in the media, though, and there are thousands of subscribers -- so once you get an email you have to act quickly.

This Hilton rate won't last long. This is what fare alert had to say a few minutes ago:

The Hilton Tokyo is offering rooms for only $2/night (and $3/night for executive level rooms which include breakfast). This offer appears to be valid at least through August 2006, and should work for all dates where the hotel is not sold out.

There's always some chance that the rate won't be honored by the hotel, so wait a few days before buying airline tickets...

Update 9:41 am: A quick call to United Mileage Plus and I have 2 first class award tickets to Tokyo (flying ANA) on hold, the plan is to stay a week and then go on to Bangkok (using Thai Airways on the same award ticket) for a few days. It's just on hold - I haven't ticketed yet - I'll wait to be sure the hotel in Tokyo honors the $3 rate. And I'll still check out award availability on a bunch of other airlines before settling on a plan.

Update 10:08 am: The Hilton Osaka is also available on the same rate glitch over at Expedia.

Update 11:29 am: The deal is no longer available at the Hilton Tokyo, Expedia shows no availability for any date. However it does seem to still be bookable at the Hilton Osaka.

Posted by Gary on November 5, 2005 at 09:17 AM | Permalink

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Tracked on Nov 5, 2005 1:16:43 PM

Comments

I don't want to come across as a prude, but you are stepping awefully close to the fine line between taking advantage of a good deal and theft. Not legally speaking, mind you, but most certainly morally.

Posted by: Commenterlein at Nov 5, 2005 12:58:15 PM

I share today's story more or less in real-time as a window into what frequently becomes a big news story, and I have some insights into how these things work and how the stories develop. Of course you'll need to make up your own mind as to whether to participate in such a deal yourself.

As for the moral aspect of it, if Expedia and/or Hilton chooses to honor the rate, great I'll enjoy my stay.

If they choose not to honor the rate then they'll just cancel the reservation.

I have no knowledge about what the cause of the rate glitch was in this particular case, but travel companies have been known to briefly make intentional errors and then honor the rate, getting far more in free media than they would lose in revenue on the sale (especially when rooms would have gone unsold or seats would have flown empty, so their marginal cost is next to zero).

In general my experience with these glitches is that when mistakes are made on paid-for reservations then the rate is honored. When no money has changed hands then the mistake is generally not honored. (There are exceptions to this where even paid-for reservations aren't honored, but this seems to hold as a general rule.)

If I make a mistake and click purchase on a non-refundable reservation, the provider generally isn't under an obligation to let me out of it. It's buyer beware, a rule set up by the provider(s) themselves. So I'm comfortable with a 'seller beware' approach.

Moreover, it isn't always clear what is a mistake and what isn't. In this case I'm willing to stipulate that it is, but I do see with some regularity giveaways of free airline tickets (European lowfare carriers are notorious for doing this) and easyJet now has a cruise company that offers nights from less than $10. Are those mistakes? No.

How is one expected to know what's a mistake and what's a good offer?

My general recommendation is that airlines, hotels, and booking engines should write a simple code that won't process a reservation or charge a credit card when a series of rules are met (e.g. international flight for under $100, price is less than 20% of average, etc.).

Posted by: Gary Leff at Nov 5, 2005 1:48:28 PM

Thank you for your detailed answer, very much appreciated.

Posted by: Commenterlein at Nov 5, 2005 1:52:51 PM

Thank you, Gary. If all goes accordingly, the Japanese language courses I took a couple of years ago will finally be put to good use.

I only wish I had booked a longer stay. I telecommute, and theoretically, I could have stayed a month or so in Japan for much less than rent here in the states.

Cheers,

Kyle

Posted by: Kyle at Nov 5, 2005 3:00:08 PM

Hi Gary,

I have been able to make such reservation myself, and so far my credit card account was charged + in the itinerary window @ Expedia I have both Expedia AND Hilton confirmation numbers. Do you think that means the reservation will be honored?

Thanx for any thoughts/comments. :-)
Cheers, Roman

Posted by: Roman at Nov 8, 2005 4:42:36 AM

In general, American jurisdictions will not enforce a contract where there is a unilateral mistake by one of the parties, and the other party has reason to know about the mistake. $3 rates or even a $10 rate for a nice hotel is a clear indication to the buyer there has been a mistake.

Your example with the Easy companies makes it tempting to think $3 is "reasonable," but clearly it is not: "Mistake fares and hotel rates happen all the time." Easy has a reputation of stripping down services and providing them at low cost. I'm confident that the EasyCruize is different in significant ways from other, higher priced carriers. Hilton does not have such a reputation.

The fact that the company takes your money could change the situation, but given that credit processing is automatic...

As for the justification ending, "...I'm comfortable with a 'seller beware' approach."
You may make a mistake in purchasing something on-line, but the vendor has no reason to believe you are making a mistake. Thus, it is a different situation. In addition most vendors have a purchase process that makes mistakes very difficult: you fill out all of your personal information; the price is confirmed more than once; et cetera.
Also, the mistake a consumer makes is likely not of the same kind. The hotel's mistake is a clerical error. Your "mistake" could be not being able to anticipate some future event (pregnancy, medical emergency, etc).

Posted by: c&d at Nov 8, 2005 1:16:32 PM

The fact that the company takes your money could change the situation, but given that credit processing is automatic...

Posted by: c&d at Nov 8, 2005 1:19:17 PM

The fact that the company takes your money could change the situation, but given that credit processing is automatic...

Posted by: c&d at Nov 8, 2005 1:20:08 PM

A deal is a deal. Selling your house for $200,000 and before it closes its now worth $400,000. Can I back out like Expedia? No, I would have a team of lawyers giving me a colon exam. Expedia is trying to back out of the deal, guess they will attempt to reduce there losses. Some people will give up the reservation without a fight. Others will fight and stay at the Hilton for $3 per night. Expedia will evaluate each on a case by case

Posted by: John at Nov 10, 2005 5:18:51 PM

Expedia could have turned this into a Million Dollar Marketing idea if they played it right. Nobody beats Expedia's prices. See we sold the Osaka Hilton for $3 per night, can you find that on Orbitz or Travelocity? Just they are not relaxing and thinking about the right spin. They could have happy guests and great exposure.

Posted by: Frank at Nov 10, 2005 5:23:03 PM

Expedia made an error, I am sure everyone feels bad that I multi million dollar company will have lower than expected revenues for the day. It will be part of the cost of doing business. They will not go out of business because of the error, the revenues for the day might be smaller than expected. Some customers will have a deal of a lifetime and the tech support people at Expedia will be putting in controls that will reduce the ability for this to happen again. Just realizing how powerful the information highway can distribute information. I image somebody at Expedia will try to cancel the reservations with the guest and see how it will fly. Can't blame them for trying

Posted by: Dave at Nov 10, 2005 5:31:40 PM

Expedia told USA Today that they were honoring November reservations only.

I got it in writing -- both before and after the article -- that they'd honor my booking, just by emailing them and asking.

So they've sent out tons of mass cancellations, but they did not cancel me. Even today I got them to re-confirm my booking in writing. I'll be spending a week at the Hilton Tokyo.

I still don't understand Expedia's response, though.

(1) They could have said "See? It always pays to check Expedia first before booking! Expedia Special Rates REALLY ARE special!"

(2) Instead, they've left customers wondering whether they can trust bookings they make on Expedia, when are they guaranteed? when are they final?

Posted by: Gary Leff at Nov 10, 2005 8:45:52 PM

Expedia cancelledour $3.14 per night reservation and gave me a $250.00 credit. We plan to sue them for the actual value of this hotel room (500.00 per night). We think Expedia should honor their error.

Posted by: evan at Nov 11, 2005 11:44:22 AM

Evan, you plan to sue them for actual value of the room? How can you justify that? You're only out $3. Actually, you're up $250. Give me a break. People like you are the ones who ruin things for the rest of it. I hope they revoke your $250.

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