Renting Cars Online:

An Analysis of the Potential Benefits and Challenges of Booking Through a Car Rental Web Site (Full Report)

Author: William J. McGee, Consultant to Consumer Reports WebWatch,

TABLE OF CONTENTS

Executive Summary

Consumer Reports WebWatch Mission Statement

Consumer Reports WebWatch Travel Projects in 2003

A Brief Overview of Car Rental Sales Distribution Methods

Car Rentals Project Testing Methodology and Parameters
Selection of Web Sites
Methodology
Testing Parameters
Specific Testing Criteria
Selection of Results
Currency Issues
Rates Not Rounded
Availability of Rates and Vehicles
Valid Tests
Invalid Data
Technical or System Failures

Car Rentals Project Findings and Concerns
Pricing Display Issues

Illustration A: Orbitz shows rate of $49.99 with Budget
Illustration B: Orbitz shows higher rate of $79.99 on next screen

Bias Issues

Illustration C: Example of initial query results on Expedia
Illustration D: User must scroll down to see "Show More Vendors" option
Illustration E: "Show More Vendors" page shows cheaper rates

Integrated Rates vs. Branded Rates
Competition Issues
Listing of Taxes, Fees and Surcharges

Car Rentals Testing Results, Rankings and Conclusions
Lowest Rates
Closest Rates
Lowest Rates by Test
Lowest Rates for Major Car Rental Companies Only
Online Customer Service Policies

Consumer Reports WebWatch Tips for Booking Car Rentals Online

Appendix 1: Car Rental Web Site Ease-of-Use Factors

Table of Figures
Figure 1: Lowest Car Rental Rates
Figure 2: Lowest and Closest Car Rental Rates
Figure 3: Lowest Car Rental Rates by Test
Figure 4: Lowest Major Car Rental Company Rates
Figure 5: Lowest and Closest Car Rental Company Rates

Executive Summary

Although travel remains the single largest source of Internet commerce, much of the growth in recent years has occurred not only in the airline sector but in the hotel and car rental sectors as well. This growth has spurred more choices for consumers, paradoxically providing better booking tools and presumably lower rates, in addition to pricing methodology that may increase the potential for confusing and misleading consumers.

This research report summarizes the work undertaken by Consumer Reports WebWatch, after months of extensive testing and analysis of car rental Web sites. The sites tested were the three leading integrated travel Web sites, Expedia, Orbitz, and Travelocity, as well as the branded Web sites maintained by four leading car rental companies: Alamo, Avis, Dollar, and Hertz. All testing was conducted in a real-time, "apples-to-apples" environment to determine which Web sites offered the best booking tools and lowest rates. This testing also uncovered serious competitive issues as well.

Among the most significant findings uncovered by this extensive testing of car rental Web sites:

• Concerns were raised over competition practices. Specifically, WebWatch testers found evidence of misleading pricing displays on both Orbitz and Expedia. In both cases, rates provided on initial displays were not immediately available for total pricing and booking.
  
  
• Issues of bias were raised as well. In particular, there were multiple omissions of major car rental companies on Expedia's initial rate displays. On these initial displays, Expedia repeatedly provided only five car rental brands in response to queries for rates in 30 U.S. cities. This occurred even when other rental companies, which Expedia referred to as not "part of our preferred partner program at this time," provided lower rates.
  
  
• There was much confusion over total pricing, including taxes, fees, and surcharges. Several Web sites provided different total prices for identical queries.
  
  
• As for the rankings of Web sites providing the lowest car rental rates, there was great polarization. Orbitz (73%) and Travelocity (63%) led the other Web sites by a wide margin, while Hertz (0%) and Avis (0%) trailed by a wide margin as well.
  
  
• The three integrated travel Web sites — Expedia, Orbitz, and Travelocity — were all much better at providing lowest rates than the four branded car rental company Web Sites — Alamo, Avis, Dollar, and Hertz. In several cases, the integrated Web sites provided lower rates than the branded sites provided for their own vehicles. • Many of the lowest rates provided by Orbitz were through small and little-known car rental companies. When the rankings were re-tallied to include only the 10 largest domestic car rental companies, Travelocity (63%) led Orbitz (49%).
  
  
• Consumer Reports WebWatch found more competition within the car rental sector than previous Web site testing had revealed within the airline and hotel sectors. Many of the closest rates were just pennies more than the lowest rates. Complete tables provide detailed analysis of lowest and closest rates for all seven Web sites.

The project was directed by William J. McGee, a travel journalist and consultant to Consumer Reports WebWatch and the Editor of Consumer Reports Travel Letter from 2000 to 2002. Abrams Travel Data Services, based in Long Beach, Calif., provided assistance with car rental market share data for specific companies and airports, but was not involved in the Web site testing or the preparation of this research report.

The project was completely funded by Consumer Reports WebWatch. Employees of Consumer Reports WebWatch assisted in drafting the methodology, participated in the testing, and contributed to this research report. It was edited by employees of Consumer Reports WebWatch and Consumer Reports.

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Consumer Reports WebWatch Mission Statement

Consumer Reports WebWatch is a project of Consumers Union, the non-profit publisher of Consumer Reports magazine. The project is supported by grants from The Pew Charitable Trusts, the John S. and James L. Knight Foundation, and the Open Society Institute. Consumer Reports WebWatch in turn funded the research and production of this report, as it has done with similar reports on Web site credibility, airline ticket-booking Web sites (performed and published in conjunction with Consumer Reports Travel Letter, which ceased publication in December 2002), search engines, and health Web sites.

Consumer Reports WebWatch's mission is to improve the credibility of Web sites, through research, through articulation of best practices guidelines in specific sectors of Web publishing, and by working with ConsumerReports.org to produce ratings of Web sites using those guidelines. Ratings of these sites will be forthcoming in 2003, using research conclusions from this report. Consumer Reports WebWatch's research, guidelines, and e-Ratings are available for free at http://www.consumerwebwatch.org.

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Consumer Reports WebWatch Travel Projects in 2003

Consumer Reports WebWatch remains committed to testing, researching, and reporting on travel Web sites, particularly since travel is the single largest source of online commerce. Throughout 2003, it is continuing the work that was begun in Consumer Reports Travel Letter (which ceased publication in December 2002), by providing unbiased, detailed, accurate, and repetitive testing of travel Web sites.

In June 2002, Consumer Reports WebWatch teamed with Consumer Reports Travel Letter to extensively test travel Web sites providing airfares. This report is available here.

Here is a summary of travel projects in 2003:

• "Booking Hotels Online: An In-Depth Examination of Leading Hotel Web Sites," released in April 2003.
  
  
• "An Analysis of the Potential Benefits and Dangers of Booking Through a Car Rental Web Site," released October 8, 2003.
  
  
• An examination of alternative travel booking sites, including "opaque" or "blind-bidding" Web sites, scheduled for early 2004.

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A Brief Overview of Car Rental Sales Distribution Methods

The rapid growth of the online travel industry has presented consumers with news that is both good and bad. There are more choices and evidence of lower rates and fares. But there are also new hazards particular to the new technology.

Shopping for and purchasing a rental car on the Internet is no exception. Car rental chains and franchisees can use a variety of methods to sell their products: directly to consumers via rental counters at airports or other locations; directly to consumers via toll-free reservations lines; through individual, chain, or consortia travel agencies; through consolidators and brokers; and through travel management programs contracted with corporations and organizations. In addition, car rental companies can distribute via the Internet in three major ways: through independent, integrated Web sites (such as Expedia, Orbitz, and Travelocity); through "opaque" or "bidding" Web sites (such as Priceline and Hotwire); and through the company's own branded Web site.

Renting cars is a huge business, and the largest players generate a lot of revenue. According to Abrams Travel Data Services, a Long Beach, Calif.-based independent consulting firm that tracks the car rental sector, in 2002 the rental industry posted $6.5 billion in revenue at major airports in the United States alone. The biggest car rental companies also incur large costs, and the drive to reduce distribution expenses is as acute within the car rental sector as it is within the travel industry at large. Convincing more customers to book online is a key strategy in the overall effort to reduce costs.

But as Consumer Reports WebWatch noted in past examinations of airline and hotel booking Web sites, the World Wide Web has made buying travel products more complicated, not less complicated. Each distribution method offers its own advantages and disadvantages, and the Internet is no exception.

The major car rental companies continue to sell their products through the global distribution systems (GDSs) used by travel agencies. But the influx of "Web-only" rates — featuring prices only available through a given number of Web sites — has affected the car rental industry as well; this project made it clear that competition led several Web sites to slash car rental rates online.

Web-only rates were discussed at length in Consumer Reports WebWatch's examination of booking hotels on the Web in April 2003. Their dramatic undercutting of rates obtained through GDSs was a key factor in Consumer Reports WebWatch's decision not to benchmark these car rental tests with an outside consultant accessing a GDS. It's clear that Web-only rates have rapidly altered the short history of online travel.

One of the issues discussed in this research paper is the sensitive topic of bias in integrated travel Web sites. Consumers Union and others have been voicing concerns about bias for several years. It's a critical issue because bias has affected most of the travel industry's primary distribution methods: global distribution systems, travel agencies, and integrated travel Web sites. Unfortunately, this current research has uncovered new evidence as well.

The need for independent, thorough, repetitive, and unbiased testing of travel Web sites has only grown more urgent with each project undertaken by Consumer Reports WebWatch. It's a need that Consumers Union plans to continue to address.

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Car Rentals Project Testing Methodology and Parameters

Consumer Reports WebWatch announced early in 2003 that it would launch several in-depth examinations of travel Web sites. This research paper focuses solely upon testing of online car rental bookings. Previously, Consumer Reports WebWatch examined hotel booking Web sites in April 2003 and teamed with Consumer Reports Travel Letter to examine independent airline booking Web sites in June 2002.

What follows is an in-depth presentation of the testing methodology and parameters.

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SELECTION OF WEB SITES

Consumer Reports WebWatch analyzed market share data and other factors before deciding which Web sites to include in this testing. Abrams Travel Data Services, based in Long Beach, Calif., provided assistance with car rental market share data for specific companies and airports.

For these tests, seven Web sites were chosen, including the three largest integrated travel Web sites and four "branded" Web sites maintained by car rental companies.

The three integrated Web sites were:

• Expedia (www.expedia.com), owned by USA Interactive (and formerly owned by Microsoft). Expedia is a sister company of Hotels.com.
  
  
• Orbitz (www.orbitz.com), owned by the nation's five largest airlines: American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, and United Airlines.
  
  
• Travelocity (www.travelocity.com), owned by Sabre, the global distribution system (and formerly owned by AMR, the parent company of American Airlines).
  The four branded Web sites were:
  
  
• Alamo Rent A Car (www.alamo.com), owned by ANC Rental Corp. Alamo is a sister company of National Car Rental.
  
  
• Avis Rent A Car System (www.avis.com), owned by Cendant Corp., a leading travel conglomerate. Avis is a sister company of Budget Rent A Car. Among its other holdings, Cendant owns Cheaptickets.com and Trip.com, integrated travel Web sites; Galileo, a global distribution system (GDS); and nine hotel brands.
  
  
• Dollar Rent A Car (www.dollar.com), owned by Dollar Thrifty Automotive Group Inc. Dollar is a sister company of Thrifty Car Rental.
  
  
• Hertz Rent A Car (www.hertz.com), owned by Ford Motor Company.

According to Abrams Travel Data Services, the largest airport car rental companies in the U.S. in 2002 were:

• Hertz (28.0% market share)
  
  
• Avis (21.4% market share)
  
  
• National (12.1% market share)
  
  
• Budget (10.5% market share)
  
  
• Alamo (10.5% market share)
  
  
• Dollar (8.5% market share)
  
  
• Enterprise (3.7% market share)
  
  
• Thrifty (3.7% market share)
  
  
• Others (1.6% market share)

Among the eight largest car rental companies, Consumer Reports WebWatch selected four Web sites that were owned independently of each other. National was not tested because it is a sister company of Alamo, Budget was not tested because it is a sister company of Avis, and Thrifty was not tested because it is a sister company of Dollar. Although Enterprise is a major competitor in the overall car rental market (including insurance replacement rentals), it was not tested because currently it is not a major competitor in the airport market.

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TESTING PARAMETERS

• Each test consisted of searching for car rental rates in U.S. dollars at 30 major airports in cities throughout the mainland U.S., Hawaii, and Puerto Rico. These airports represented a mix of both leisure and business destinations.
  
  The airports were:
  1) Boston/Logan International Airport (BOS)
  2) New York/LaGuardia Airport (LGA)
  3) New York/Kennedy International Airport (JFK)
  4) Newark/Liberty International Airport (EWR)
  5) Washington, D.C./Dulles International Airport (IAD)
  6) Washington/Reagan Washington National Airport (DCA)
  7) Atlanta/Hartsfield International Airport (ATL)
  8) Orlando/International Airport (MCO)
  9) Tampa/International Airport (TPA)
  10) West Palm Beach/Palm Beach International Airport (PBI)
  11) Fort Lauderdale/Fort Lauderdale-Hollywood Airport (FLL)
  12) Miami/International Airport (MIA)
  13) San Juan/Luis Munoz Marin International Airport (SJU)
  14) Chicago/O'Hare International Airport (ORD)
  15) Chicago/Midway Airport (MDW)
  16) New Orleans/International Airport (MSY)
  17) Dallas/Dallas-Fort Worth International Airport (DFW)
  18) Dallas/Love Field (DAL)
  19) Houston/George Bush Intercontinental Airport (IAH)
  20) Houston/William P. Hobby Airport (HOU)
  21) Denver/International Airport (DEN)
  22) Salt Lake City/International Airport (SLC)
  23) Phoenix/Sky Harbor Airport (PHX)
  24) Las Vegas/McCarron International Airport (LAS)
  25) Seattle/Seattle-Tacoma International Airport (SEA)
  26) San Francisco/International Airport (SFO)
  27) Los Angeles/International Airport (LAX)
  28) San Diego/Lindbergh International Airport (SAN)
  29) Honolulu/International Airport (HNL)
  30) Maui/Kahului Airport (OGG)
  
• Abrams Travel Data Services ranked the 50 largest domestic airport car rental companies by rental revenue volume in 2002. These 30 airports ranked as follows:
  
  1) BOS: 10
  2) LGA: 33
  3) JFK: 43
  4) EWR: 9
  5) IAD: 23
  6) DCA: 27
  7) ATL: 5
  8) MCO: 1
  9) TPA: 14
  10) PBI: 28
  11) FLL: 11
  12) MIA: 4
  13) SJU: NOT RANKED
  14) ORD: 8
  15) MDW: 44
  16) MSY: 39
  17) DFW: 12
  18) DAL: NOT RANKED
  19) IAH: 21
  20) HOU: NOT RANKED
  21) DEN: 6
  22) SLC: 25
  23) PHX: 7
  24) LAS: 13
  25) SEA: 18
  26) SFO: 3
  27) LAX: 2
  28) SAN: 16
  29) HNL: NOT RANKED
  30) OGG: NOT RANKED
  
• Rates were accepted for car rental companies located at these airports. In most cases, the companies provided "on-airport" service but in some cases they provided "off-airport" service; however, rates from other locations were not accepted.
  
  In addition, one of the four branded Web sites did not provide rates for four of these airports. Alamo did not have locations at New York/LaGuardia (LGA), New York/Kennedy (JFK), Newark (EWR), and San Juan (SJU). For Newark only, Alamo's Web site posted the following statement: "This location is now being served by our sister company National Car Rental." Rates from National were not queried.
  
  
• Booking criteria were established in advance. These criteria included:
  • Picking up from and returning to the same location
  • No second driver
  • No underage driver
  • No special or corporate rate programs (government, military, AARP, AAA, etc.)
  • No frequent renter program membership
    
    
• NOTE: Not all Web sites allowed such specificity for each test, but these parameters were established in advance to ensure consistency.

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SPECIFIC TESTING CRITERIA

• Each test consisted of searching for the same vehicle type. The vehicle specifics (number of doors, air conditioning, automatic transmission, etc.) were established in advance. No optional extras (child seats, ski racks, cell phones, etc.) were requested. NOTE: Again, not all Web sites allowed such specificity for each test, but these parameters were established in advance to ensure consistency. The vehicle types were:
  
  TEST #1: midsize/intermediate car
  TEST #2: midsize/intermediate car
  TEST #3: premium car
  TEST #4: fullsize car
  TEST #5: minivan
  
• In order to simulate a variety of trips, the advance booking windows varied. The booking times were:
  
  TEST #1: 87 days in advance
  TEST #2: 65 days in advance
  TEST #3: 4 days in advance
  TEST #4: 28 days in advance
  TEST #5: 130 days in advance
  
• In a further effort to simulate a variety of trips, the length of the rental periods varied as well. The rental periods were:
  
  TEST #1: 3 days
  TEST #2: 7 days
  TEST #3: 3 days
  TEST #4: 4 days
  TEST #5: 3 days

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SELECTION OF RESULTS

Because the technological tools and viewer interfaces employed by these Web sites have greatly evolved in recent years, Consumer Reports WebWatch broadened its testing methodology. Specifically, Consumer Reports WebWatch no longer analyzes lowest rates and fares based upon the first rate or fare returned, a method that was previously employed by Consumer Reports Travel Letter and Consumer Reports WebWatch. This had been done because at one time all integrated travel Web site screens resembled the vertical presentations pioneered by global distribution systems (GDSs). Because these screens have evolved, the testing methodology evolved as well. This new methodology was first employed when Consumer Reports WebWatch examined hotel booking Web sites in April 2003.

For six of these Web sites, the lowest car rental rates were culled from either the first five returns or the first full page of returns, whichever was greater. It's important to note that in many cases — particularly with Expedia — the lowest rate was not always listed first. NOTE: See "Bias Issues" for an in-depth examination of this issue.

The exception to this methodology was Orbitz, which offered a horizontal "Orbitz Display Matrix" interface with multiple rates, vehicles, and car rental companies presented on a single screen. (See Illustration A.) For Orbitz results, the lowest rate was selected within the appropriate vehicle category from among all the vendors presented horizontally within the matrix.

In addition, Consumer Reports WebWatch expanded its methodology to provide broader test results for a richer sampling. This includes presenting complete rankings of all Web sites providing "close" car rental rates (within $1 per day of the lowest rate).

Note that all rankings included ties. Therefore it was theoretically possible that every Web site could have provided the lowest rate for every available query.

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CURRENCY ISSUES

All rates were provided in U.S. dollars. None of the rates included federal, state, local, airport, or company taxes, fees, or surcharges. NOTE: Click here for an in-depth examination of car rental taxes, fees, and surcharges.

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RATES NOT ROUNDED

In past tests, Consumer Reports WebWatch rounded off to the nearest dollar all airfare and hotel rate amounts. However, because car rental rates are so intensely competitive, actual rates were used in all cases in these tests, and no amounts were rounded to the nearest dollar. NOTE: Click here for an in-depth examination of closest rates.

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AVAILABILITY OF RATES AND VEHICLES

Consumer Reports WebWatch did not book any of the rates provided. In all cases, the Web sites stated that the vehicles requested were available. When the vehicle rate provided was not available, the next lowest rate that was available was used. Specific issues concerning availability of rates are discussed here.

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VALID TESTS

All of the Web sites were evaluated solely on valid tests. If there was an error on the part of Consumer Reports WebWatch, this was deemed an invalid test. Invalid tests were eliminated and did not affect the final rankings. These errors included incorrect data entries, insufficient returns of data, and printing errors. There were no more than three errors for any one Web site (98.0%). Overall, there were only four errors committed by Consumer Reports WebWatch testers for all 1,050 queries (99.7%).

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INVALID DATA

Through no fault of the Consumer Reports WebWatch testers, five of the seven Web sites failed to return valid data on some tests. These five Web sites were Alamo, Avis, Dollar, Expedia, and Hertz. Both Orbitz and Travelocity returned valid data for all 150 tests.

In some cases, these failures affected the Web site's final rankings. There were a variety of factors involved, including:

• Results outside the specific parameters requested;
  
  
• Vehicle type not available in that location;
  
  
• Vehicle type sold out on those dates;
  
  
• Technical or system failures.

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TECHNICAL OR SYSTEM FAILURES

Our testers experienced several technical or system failures in which a Web site was unable to process a request. These occurred with four of the seven Web sites: Alamo, Avis, Expedia, and Travelocity. With three of these Web sites, the tester repeated the query and the data were provided without further incident.

With Avis, the tester repeated the query but the Web site failed to return data for two specific airports: Los Angeles (LAX) in TEST #2 and West Palm Beach (PBI) in TEST #5. In both cases, a message appeared which stated: "We are unable to process your request at this time." This was accompanied by a suggestion to contact Avis via a toll-free number. In both cases, this resulted in invalid scores that affected the Web site's final rankings.

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PRICING DISPLAY ISSUES

One of the most disturbing issues that arose from this testing concerned listed car rental rates that were not available for booking. This occurred with both Orbitz and Expedia. The Orbitz problems were more serious and are discussed first, followed by the Expedia problems.

• Throughout this testing, the "Orbitz Display Matrix" provided numerous car rental rates on the initial screen that were not available for detailed pricing and booking on the following screen. In each case, the following statement appeared at the top of the matrix in small print: "Because availability can change rapidly, the car you selected is no longer available. Please choose another car. (Message 315)"

In TEST #5, the Consumer Reports WebWatch tester printed all of the matrix displays for lowest rates that were not available. Here is a summary of those results:

*See detailed explanation below.

As illustrated above, 7 of the 30 queries for lowest rates in TEST #5 produced an initial display of a lowest rate that was not available.

In addition, in two separate cases the initial display of a lowest rate was not available twice. First, this occurred when the Consumer Reports WebWatch tester queried a rate for Dallas-Fort Worth International Airport (DFW) and a lowest daily rate of $39.51 with Advantage was provided. When the tester requested that this rate be "total priced" (to include taxes, fees, and surcharges), the Advantage rate was no longer available and identical lowest rates of $45.00 for L&M and E-Z were provided. When the tester then requested that these rates be total priced, the L&M lowest rate became unavailable and only the E-Z lowest rate of $45.00 remained available. All of these queries were made in immediate conjunction. The difference between the first lowest rate and the final lowest rate was $5.49 per day, or $16.47 for the entire rental period.

This occurred again when the tester queried a rate for Houston's George Bush Intercontinental Airport (IAH) and, once again, a lowest daily rate of $39.51 with Advantage was provided. This rate was not available for total pricing, and a lowest daily rate of $39.99 with Dollar was provided. But this rate was also not available for total pricing, so that the lowest available daily rate was actually $48.99 with Alamo. Again, all of these queries were made in immediate conjunction. The difference between the first lowest rate and the final lowest rate was $9.48 per day, or $28.44 for the entire rental period.

The specific availability problem with the lowest rate provided for New York's LaGuardia Airport (LGA) is discussed in detail below. Putting aside the LGA rates, these price differentials between the first and second (or first and third) lowest rates ranged from $1.00 to $10.06 per day, or $3.00 to $30.18 per rental period.

It may have been that these pricing and availability problems were due to communication glitches between Orbitz and the car rental companies. However, it's important to note that these problems did not occur with one of the other two integrated travel Web sites, Travelocity. Availability problems did arise with Expedia, and they are discussed below. (And at no time did a pricing availability problem occur with the four branded car rental Web sites.)

The unanswered question is how an integrated travel Web site as technologically advanced as Orbitz, with the backing of the nation's five largest airlines, allowed such a significant flaw in its consumer interface to go unchecked. At best, it was a technical glitch that should have been corrected.

However, Consumer Reports WebWatch uncovered an even more troubling problem with the "Orbitz Display Matrix."

In the most serious case, a rate listed in the initial "Orbitz Display Matrix" rose by $90.00 in the 17 seconds it took to inquire about the total pricing specifics of that rate. This case and the cases with Expedia cited below were the only instances of price-changing ever uncovered during the travel Web site testing conducted since 2000 by Consumer Reports WebWatch and Consumer Reports Travel Letter.

Specifically, in TEST #5 the Consumer Reports WebWatch tester queried a rate for a minivan for three days, with pick-up and drop-off at New York's LaGuardia Airport (LGA). The "Orbitz Matrix Display" provided rates for four car rental companies: Budget, Enterprise, Dollar, and National. The lowest rate provided was through Budget, listed as a "weekend daily rate" of $49.99 per day (for a total of $149.97 without additional charges). However, when the tester immediately inquired about the specifics of this Budget rate, it had risen to $79.99 per day (for a total of $239.97 without additional charges). This represented an increase of $30.00 per day, or $90.00 for the entire rental period. The time elapsed between the printing of these two pages was 17 seconds.

Illustrations A and B provide further evidence.

Illustration A: Orbitz shows rate of $49.99 with Budget
(NOTE: Click on icon to view illustration in full.)

Illustration B: Orbitz shows higher rate of $79.99 on next screen
(NOTE: Click on icon to view illustration in full.)

 

Consumer Reports WebWatch contacted Orbitz and provided hard-copy documentation to support these findings. In September 2003, Orbitz responded by stating that its "car rental matrix and search functionality have been substantially improved" since Consumer Reports WebWatch conducted its testing in May 2003. Orbitz said that it was unable to "replicate the errors" found by Consumer Reports WebWatch, but that it had made "major upgrades" that it claimed now gives consumers total pricing displays for 85% of its travel providers.

As for availability of rates, Orbitz said that by mid-Summer 2003 it had achieved "source information" (real-time connectivity) for 86% of the rates it displayed, and that this figure was expected to increase to 93% by September 2003. But Orbitz said that its decision to include rates from many smaller car rental companies (discussed here) means that these smaller firms often are unable to provide real-time price and availability information. Orbitz said this business decision means it "will not be able to provide real-time information 100% of the time for all car rental suppliers."

In a subsequent interview with Consumers Union in September 2003, an Orbitz executive said Consumer Reports WebWatch "caught us at a time when we were making substantial changes to our site."

• With Expedia, Consumer Reports WebWatch uncovered two cases where rates provided were not available for further pricing and booking. In neither case were these rates the lowest rates provided by Expedia for that airport.

Both of these "missing" rates were with Avis, and both occurred during TEST #5. In fact, both of these rates were interwoven with another serious issue, potentially biased displays (discussed here). In both cases, Expedia provided rates from Avis in its initial display that rose when the tester selected the "Show more vendors" option. On the subsequent displays, both of the Avis rates increased.

The first case concerned West Palm Beach (PBI). The initial display included a lowest daily rate of $64.99 for Avis but the subsequent display included a lowest daily rate of $74.99 for Avis. No explanation for the missing rate was provided on the subsequent display. The price differential was $10.00 per day and $30.00 for the entire rental period.

The second case concerned Houston's Hobby Airport (HOU). The initial display included a lowest daily rate of $60.99 for Avis but the subsequent display included a lowest daily rate of $84.99 for Avis. The price differential was $24.00 per day and $72.00 for the entire rental period.

In both cases, no explanations for the missing rates were offered on the subsequent displays. Obviously these were disturbing findings in and of themselves, apart from the bias issue. However, these were the only two cases of missing rates with Expedia uncovered by Consumer Reports WebWatch.

The Orbitz problems detailed above were more chronic, and in the specific case cited, concerned the lowest rate provided for a given airport.

Consumer Reports WebWatch contacted Expedia and provided hard-copy documentation to support these findings. In September 2003, Expedia responded and stated that it provides a message on its rate page: "Please note that prices shown on this page are for comparison purposes only. To see the actual rate, click on 'verify rate and continue.'" Expedia said this feature notifies consumers that "the rate has been changed."

Expedia further stated: "There are several reasons prices change as a customer goes through the booking process. One of the most common is that prices shift quickly based on supply and demand. The second reason is an industry issue — Expedia, like all travel agencies, gets its [airline] and [car rental] pricing information from global distribution systems (GDSs). The GDS has direct-connect capability with car vendors in order to get the most updated rate information. There are times when the GDS automatically defaults to a "cached" price from its database, resulting in different prices being quoted during the comparison shopping phase. However, once the customer clicks 'verify rate and continue,' the rate will be verified, before a customer puts in any credit card information. In the two test sequences performed by Consumer Reports WebWatch, the 'verify rate' step was not taken, so it is difficult to know which price was correct — the lower or higher price."

Expedia was correct that Consumer Reports WebWatch did not perform the additional "verify rate" step. However, even if this function had been performed and the higher rates were provided, it would not have changed the fact that incorrect lower rates were provided initially, and that is the crux of this issue.

In a subsequent interview with Consumers Union in September 2003, an Expedia executive said, "This is an industry issue." He added, "Solving this problem and getting to a situation where prices are accurate at all stages is an immense technical problem but we're working extremely hard to make sure we get there and get there first."

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(NOTE: Click on icon to view illustration in full.)

Illustration D: User must scroll down to see "Show More Vendors" option
(NOTE: Click on icon to view illustration in full.)

Illustration E: "Show More Vendors" page shows cheaper rates
(NOTE: Click on icon to view illustration in full.)

 

Expedia's Web site offered no explanation for why some car rental companies were included in the initial display of rates and other car rental companies were only included in the subsequent "show more vendors" display of rates.

Furthermore, the vendors omitted from the initial displays could not be considered secondary in any way. All six were name-brand car rental companies: Avis, Alamo, Budget, Enterprise, National, and Payless.

Although some car rental companies were listed as "In the Airport Terminal" and others were listed as "Outside the Airport Terminal," these distinctions had absolutely no bearing on how rates were listed in either the initial or the subsequent displays.

In addition, some of the car rental companies that tied with identical rates in the initial display were sometimes listed in a different order in the subsequent displays. Also, in both the initial and subsequent displays, some car rental companies providing more than one rate for the same request were listed more than once.

For TEST #5, a Consumer Reports WebWatch tester printed complete sets of initial and subsequent rate displays for all 30 airports. In 27 of these 30 cases, the "show more vendors" display contained between one and five car rental companies not included in the initial display of rates. The "show more vendors" icon was not available for 3 airports: New York's LaGuardia (LGA); New York's Kennedy (JFK); and Newark Liberty (EWR). The Expedia display offered no explanation for why the "show more vendors" icon was not available for these 3 airports.

Furthermore, in 10 of these 27 cases, at least one of the additional car rental companies provided a rate that was lower than the lowest rate provided on the initial display.

What follows is a detailed breakdown of those results for TEST #5, with all car rental companies listed in the same order as they were listed in both the initial and subsequent displays. Car rental companies omitted in the initial displays are in boldface type (but car rental companies listed more than once in either display are not listed more than once here). Rates that were omitted in the initial displays but were lower than the initial lowest rates are also included.

AIRPORT	INITIAL LOWEST DAILY RATES	SUBSEQUENT LOWEST DAILY RATES
BOS	Avis ($59.99)	Budget ($56.99)
	Hertz	Alamo ($57.99)
	Thrifty	Avis
	Dollar	Enterprise
		Hertz
		Thrifty
		Dollar
IAD	Thrifty ($61.99)	Budget ($50.99)
	Avis	Alamo ($55.99)
	Dollar	Thrifty
	Hertz	National
		Avis
		Dollar
		Enterprise
		Hertz
DCA	Avis ($54.99)	Alamo ($46.99)
	Dollar	Budget (52.99)
	Thrifty	Avis
	Hertz	Enterprise
		Dollar
		Hertz
		Thrifty
ATL	Dollar ($47.87)	Dollar ($47.87)
	Avis	Enterprise
	Hertz	Alamo
	Thrifty	National
		Avis
		Hertz
		Thrifty
MCO	Thrifty ($46.86)	Payless ($39.44)
	Avis	Thrifty
	Dollar	Budget
	Hertz	Alamo
		National
		Avis
		Dollar
		Hertz
TPA	Dollar ($58.28)	Payless ($40.00)
	Thrifty	Budget ($50.99)
	Avis	Dollar
	Hertz	Thrifty
		Alamo
		National
		Enterprise
		Avis
PBI	Thrifty ($39.90)	Hertz
	Dollar	Payless ($39.89)
	Avis	Thrifty
	Hertz	Alamo
		National
		Enterprise
		Hertz
		Avis*
FLL	Thrifty ($39.90)	Thrifty ($39.90)
	Dollar	Budget
	Avis	Dollar
	Hertz	Payless
		Alamo
		National
		Avis
		Enterprise
		Hertz
MIA	Thrifty ($39.90)	Thrifty ($39.90)
	Dollar	Budget
	Avis	Dollar
	Hertz	Payless
		Alamo
		National
		Avis
		Hertz
SJU	Dollar ($69.95)	National ($43.89)
	Avis	Dollar
	Hertz	Budget
	Thrifty	Avis
		Hertz
		Thrifty
ORD	Dollar ($44.99)	Dollar ($44.99)
	Thrifty	Thrifty
	Avis	Budget
	Hertz	National
		Alamo
		Enterprise
		Hertz
		Avis
MDW	Thrifty ($59.98)	Thrifty ($59.98)
	Avis	Alamo
	Hertz	Enterprise
	Dollar	National
		Hertz
		Avis
		Dollar
MSY	Dollar ($44.99)	Dollar ($44.99)
	Avis	Budget
	Hertz	Alamo
		National
		Enterprise
		Avis
		Hertz
DFW	Advantage ($39.51)	Advantage ($39.51)
	Thrifty	Thrifty
	Dollar	Alamo
	Hertz	National
	Avis	Enterprise
		Budget
		Dollar
		Hertz
		Avis
DAL	Advantage ($39.51)	Enterprise ($23.36)
	Thrifty	Advantage
	Dollar	Thrifty
	Avis	Alamo
	Hertz	National