Hotels4U loses a tremendous £120,000 after social media campaign
Hotels4U have decided to suspend a terrifically ill-thought out one-day discount campaign after haemorrhage upward of £120,000 within the first few hours of its launch.
The Thomas Cook owned company told the Advertising Standards Authority (ASA) that it had underestimated the amount of bookings they'd get via Facebook and Twitter. A classic case of not understanding how these things work, leaving their behinds well and truly bitten.
The offer launched in the hope that it would persuade people to book on Christmas Day, offering customers £50 off hotel bookings made that day. Hotels4U reckoned on around 570 bookings, but alas, they got swamped with more than 2,600 by 6.30 am on Christmas Day.
The majority had a sales value of less than £10 after applying the £50 discount, which meant that Hotels4U had totted up a lovely £120,000 loss. By 7am, the promotion was suspended and the company decided to investigate. By 10am, they found that "a significant" number of customers had made duplicate bookings, which was in breach of the t&cs. They suspected that a large number of the bookings were fraudulently booked by users in the Far East.
The promotion was reinstated at 11am, but again, another 1,000 bookings were made within the hour. Hotels4U said it couldn't possibly continue to operate the promotion for fear of losing even more money and closed it permanently. As such, they were under the impression that it was viable to implement measures to prevent multiple bookings for the purposes of a one-day promotion, since the overall cost of altering the website booking system "would have far outweighed any financial benefits gained from the promotion".
The ASA investigated following complaints. Hotels4U said it regretted ending the promotion early, but the ASA upheld the complaint. Their reason was that the number of fraudulent or duplicate bookings did not justify ending the promotion early, therefore, Hotels4U were ordered to be more careful with future promotions, and to see that they were administered fairly and not to end them early "unless under circumstances outside their reasonable control".