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Pegasus requiring hotels to break down pricing

May 22, 2009

Pegasus Solutions has set a July deadline for hotels to provide a breakdown of their total pricing, which would enable distributors to display the total price in initial search results.

Pegasus feeds hotel pricing from 86,000 properties to the GDSs and online travel agencies.

Hotels that fail to fill in the precise fields will receive an error message when inserting data, meaning that their room pricing will not appear in the Pegasus system, a spokeswoman said.

The Pegasus initiative, communicated to hotel and distribution partners in January 2008, primarily impacts the retail model (distributors earn a commission on the retail price, not the wholesale model (distributors mark up a net rate).

The Pegasus action came independent of Orbitz's decision in late April to display the total price of wholesale hotel inventory in initial display results, becoming the only major online travel agency in the U.S. to do so.

Pegasus' initiative is being driven by developments in Europe. Tim Unwin, Pegasus' vice president of business development, said a directive by the European Parliament and Council has called for transparency in pricing across numerous industries, including travel.

"Pegasus published guidelines to help hotel customers determine which data are most important from the perspective of the distributor who is generating business for them," Unwin said.

Once Pegasus provides the pricing breakdown to distributors, it will be up to each website where there are no governmental mandates, such as in the U.S., to decide how -- or if -- they want to display the information.

All websites that sell hotels eventually give consumers the total price, including taxes and fees, but some distributors force consumers to take two or three steps. Sometimes, distributors require credit card information before revealing the bottom-line price.

News about aspects of Pegasus' total-price initiative initially was reported in The Beat.

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