Orbitz last week became the first online travel agency to extend a form of price protection to hotel bookings.
Orbitz Hotel Price Assurance provides that a customer buys a prepaid hotel on Orbitz and another customer subsequently books the same dates, property and room type at a lower rate, Orbitz will automatically send the customer who paid more a check for the difference.
The hotel program is similar to Orbitz's Price Assurance program for airline tickets, which it launched last year.
Under that program, customers are rewarded with a rebate check if another customer books the same air ticket at a lower price.
Orbitz has recently been aggressive on the hotel front: In late April, it reduced its service fees on hotel bookings and began displaying the total price for hotel stays, including taxes and fees, in initial search results.
The consensus among industry analysts is that Orbitz Hotel Price Assurance provides a great consumer message, puts more pressure on competitors and won't hurt Orbitz financially because of the restrictive nature of the price-protection plan's terms.
Orbitz spokesman Brian Hoyt declined to put a dollar figure on the amount that Orbitz was rebating. "Checks will be going out in the thousands each month for our air and hotel price assurance programs," he said.
"Our competition wants us to reveal the secret sauce so they can attempt to reverse-engineer what is a sophisticated program [that] they have attempted to replicate with their copycat promotions, nine months after we launched the first automatic and permanent price assurance program for air."
The competition, meanwhile, as of last week, was not rushing to match.
Expedia spokeswoman Katie Deines said that "Expedia's volume and supply relationships offer a built-in level of hotel price assurance to our customers from the outset."
And Deines wondered "how often a refund would actually be due as a function of how rarely the exact same property/room-type/stay dates are booked by another customer, and then even in those rare cases, how often the rate on a particular room is reduced as the booking window narrows."
Priceline was taking a wait-and-see attitude. And Priceline.com spokesman Brian Ek noted that the company was offering a similar program, called PriceDrop, for airline and vacation packages, through June 1, "so we're collecting our own data on how these programs are received."
Travelocity spokesman Joel Frey said it was focusing on building an opaque hotel product.
"We are monitoring [Orbitz's] move, but, big picture, we're focusing on what we believe to be more impactful cost-saving initiatives for consumers with longer-term implications, such as Top Secret Hotels, which we are currently building out on the site," Frey said. "Products like this are also more helpful for our supplier partners, particularly in this environment."