Hot topics for the travel
industry and consumers
Trivago's bag of tricks exposed
Trivago is a popular website which allows the public to
compare hotel prices.
If you enter your destination and stay dates, a range of
hotel rooms will be displayed. At the top of the list are
the best room rates for like-for-like rooms.
If the traveller clicks on a room price, they will be
redirected to the hotel's booking site to make the booking.
So where does Trivago make its money? Trivago does not
charge a commission to the hotel for the booking. Instead,
Trivago charges the hotel 'pay per click'. The amount hotels
pay per click is left to the hotel, with the incentive being
that the more the hotel offers to pay per click, the higher
the ranking in the search.
Three years ago, the Australian Consumer Watchdog - the ACCC
(Australian Competition and Consumer Commission) - began
investigating misleading practices Trivago used in its
Recently, the Federal Court of Australia found Trivago
guilty of four misrepresentations, or 'tricks'. They were:
- Find cheap hotels on Trivago - The Court
found that the hotel rooms on top of the list were the
cheapest only 33.2% of the time. The reason was that
Trivago's Algorithm favoured hotels which paid higher
fees per click.
- Price comparison - The Court found that the
higher red strike-though price which appeared on top of
the best price was not for a comparable room.
- Highlighting the top room price - The Court
found that Trivago went to great lengths to highlight
the top room price, without making it clear that it was
the top room only because it paid the highest fee per
- The website was transparent - the combination
of 1, 2 & 3 meant that the website was not impartial,
objective and transparent, even though it gave that
For more details on the Federal Court decision, click
How the Trivago online business model failed the Australian
Consumer Law test
If You injure yourself on holidays the
fine print might take away your claim
Walking along a jetty, swimming at a beach or in a pool,
snow and surf skiing, boating, dolphin and whale watching,
and going on theme park rides are all enjoyable holiday
No one gives a thought about suffering a serious injury,
but injuries happen every day. And when they do, apart from
the pain and suffering there are hospital, medical and
physio expenses, there is time off work and the cost of
carers and helpers.
Who pays for these? Or more to the point, can you recover
these expenses and costs from the owner of the place, such
as the Council, or the operator of the activity?
The first answer lies in the Civil Liability Laws. The
second answer lies in the fine print that the Laws allow the
owner or operator to exclude liability.
The image at the top is the new sign Coffs Harbour
Council has placed at the entry to its famous jetty which
contains many warnings.
The sign was put up after the Council lost a NSW Court of
Appeal case where it was ordered to pay more than $500,000
because its previous sign was not clear enough. That
explains the legalese in the wording!
But in most cases, the sign or warning is clear enough
and the Council or operator is not liable.
For my case summary on the Coffs Harbour Jetty case
For viagogo, profit comes before
Rarely have I heard a Judge be so scathing about a party's
misbehaviour as Justice Katzmann was about viagogo! This is
"Viagogo’s responses give it the appearance of being a
company that is indifferent to the interests of Australian
consumers and which prefers to elevate its own profit
motives above those interests, even when on notice of the
potential for harm being done.”
"The representations were on an industrial scale for the
“Viagogo’s corrective action [to change its website] was
taken very late [some time after the delivery of the
liability judgment] and for it was the legal equivalent of
Small wonder the penalty was $7 million.
For more, see
A Machiavellian plan?
Niccolò Machiavelli is famous for his clever political plans
in his book The Prince written in 1513.
This is the story of a modern day Machiavellian plan.
The scene is a restaurant bearing his name,
Machiavelli Ristorante Italiano in Clarence Street Sydney.
The players are the restaurant manager and the
The plot The players jointly purchased the restaurant
for a price of $850,000, of which $450,000 was paid in cash
to an associate of the seller, which the manager paid, and
$400,000 was paid under a proper Contract, which the
investor partly financed.
The business was awash with cash: the staff wages were paid
in cash stuffed into envelopes, suppliers were paid in cash
and the players paid $1,000 a week to each of their families
in cash. They kept two sets of books - the tax books without
the cash entries and the true books with the cash entries.
The players started to argue. The manager sidelined the
investor by blocking online access to the financial accounts
by making them read-only.
The Machiavellian Plan The investor decided on a plan
to force the manager to buy him out for $600,000 by using
the threat of liquidating the business as his bargaining
lever. The manager refused. The investor went to court to
ask the court appoint a liquidator claiming he was being
oppressed because access to the financial accounts was
The result Justice Black was appalled by the cash
transactions and the tax evasion. He decided not to help
either the investor or the manager and refused to make court
orders for a buy out or for the appointment of a liquidator.
Justice Black would have referred the court file to the
Australian Taxation Office had the parties not voluntarily
disclosed the true position to the ATO before the hearing.
The moral The courts won't help people with
Machiavellian plans if they are running a cash business.
For my case note click on
Don't be a minority shareholder
without a shareholders agreement for protection
For COVID-19 travel refunds, the
ACCC sits on the fence
The ACCC - the Australian Competition and Consumer
Commission - is the Australian Consumer Law watchdog.
The ACCC provides the latest information on consumer
rights, travel and event cancellations in relation to
COVID-19 on its website with a special Q&A section:
My flight, tour or cruise has been cancelled. Am I entitled
to a refund?
Allowing for the fact that it is impossible to lay down
general rules for an industry as diverse as the travel
industry - from flights, cruises, day trips, tours, resorts,
hotels and sports packages - the rules the ACCC lays down
are vague and contradictory. For example:
- If your travel is cancelled the ACCC expects that
you will receive a refund or other remedy, such as a
credit note or voucher, in most circumstances.
- If your travel is cancelled due to government
restrictions, this impacts your rights under the
consumer guarantees. However, you may also have other
remedies outside of the Australian Consumer Law.
Allow me to answer the question Am I entitled to a
refund? in this way:
- If travel is cancelled because of COVID-19
travel restrictions, the consumer's right to a
refund does not apply because the cancellation is
not the fault of the travel supplier.
- The ACCC will allow a travel supplier to issue
credit note or voucher as an alternative to a refund
for COVID-19 cancellation, provided that the
expiration date is far enough in the future for it
to be used.
- If the consumer insists upon a refund, and the
travel supplier is willing to give a refund, then it
is entitled to charge a cancellation fee and/or
retain the travel deposit (in accordance with their
terms and conditions).
For more details on refunds for COVID-19 travel
cancellations, click on my article
My flight, tour or cruise has been
cancelled because of COVID-19 travel restrictions. Am I
entitled to a refund?
Four reasons why Trivago hotel room
reviews can't be trusted
The Trivago hotel room comparison website was put under
the spotlight by the Federal Court of Australia last week,
and was found wanting! As the Court put it, 'Trivago misled
the public as to the nature, characteristics and suitability
for purpose of the accommodation search service provided by
the Trivago website'.
The Court found that Trivago hotel room reviews can't be
trusted for these four reasons:
- The hotel rooms are reviewed by a secret algorithm.
But just like a cheap pizza is made with few
ingredients, Trivago displays the cheapest hotel room by
inputting only prices in its algorithm - it does not
include non-price attributes such as free breakfast,
refundable tariffs, bed size or pay at check-in as
- The Online Booking Sites pay Trivago a Cost per
Click - a fee each time a customer clicks on their link.
Trivago rewards Booking Sites and Hotels which offer to
pay the most per click with 'Top Deal' status. And
Trivago punishes Booking Sites and Hotels who won't pay
the minimum it demands per click by leaving them out of
the room comparison.
- The hotel room comparisons are not 'like for like'
because the comparisons are not necessarily for the same
room type. A hotel room may be cheaper because it can be
overlooking a carpark, compared with a hotel room which
looks the same internally but is overlooking the sea.
This is not mentioned.
- The 'Top Deal' is displayed is visually appealing
way. It has a relatively large font, has a white space
around it, it is green in colour above a green "View
Deal" button. The comparison rooms are in small grey
font to the left. See the image. Behavioural scientists
said that the time-poor consumer would click the button
without reviewing the comparable rooms.
The Court concluded that in only 33.2% of the time was
the 'Top Deal' highlighted by Trivago the cheapest price.
For a full analysis of the Court's decision, click on my
Cheap rooms? Probably not? Trivago's
top deals are hotels which pay the most
Do you have a right to peace and quiet
(if your neighbour is a hotel)?
If you buy an apartment or house next door to a
long-established hotel, do you have a right to complain
about the crowd noise from patrons or the loud music?
Complain is what Mr Ammon did after he bought a luxury
three bedroom apartment in the Raffles Hotel (Apartments)
which overlooked the beer garden and the Riverside function
room of the Raffles Hotel (see the low building in the
centre of the image).
He brought the little-known legal action for tort for
private nuisance. He claimed that the loud noise from
the hotel caused a 'substantial and unreasonable
interference' with his peaceful enjoyment, especially on
Wednesday, Thursday, Friday and Saturday evenings when the
music was played after 9:00 pm at night. He complained he
was unable to sleep, read his book, and watch the TV, even
with the balcony doors and windows closed.
The Court of Appeal of Western Australia were not
But it was not the 'hotel was there first and so don't
complain' argument that won out.
It was the 'what do you expect when you buy close to two
highways where the traffic noise is higher than the crowd
noise and the music from the hotel most of time' that won
As the court said, you have no right to peace and quiet.
You must ask whether the noise is reasonable for the
locality. In this case, it was.
The lesson is that if the owner of the hotel applies to
extend the hours of operation, or applies for a permit for
renovations or extensions, the time to complain is when the
application is made.
It is a lot easier for a local authority to impose and
enforce a condition or regulation relating to noise levels
than it is for a neighbour to succeed in an action for
private nuisance for noise pollution.
For my case note click
you have a right to peace and quiet (if you live next door
to a hotel)?
Raffles Hotel Apartments – low building centre
Whatever you do, don't annoy the voters!
New laws for Airbnb rentals to start in
2019 in NSW
The Castle is a great movie because it captures the
emotional attachment Australians have to their home and to
living a friendly and peaceful neighbourhood.
Town planning laws support this by strictly separating
residential from business and commercial areas, with
exceptions for home offices and occupations.
However, Airbnb style short-term rentals have disturbed
the neighbours, especially in strata buildings, because the
guests come and go frequently, some are noisy, some hold
parties and some cause damage. They have disturbed the Local
Councils because Airbnb rentals introduce a commercial
activity into residential areas.
For the past three years, the NSW Government has been
searching for a compromise between encouraging tourism and
allowing people to make extra money on the one hand, and
complaints by voters of increased levels of noise and
disturbance in residential neighbourhoods on the other.
Now the NSW Government has introduced new laws to
regulate short-term rentals.
- Homestays are legal all year round if the
owner-occupier is renting a spare room, a flat or a
studio as a short-term rental in their home. No Council
approval is needed.
- Whole house or apartment short-term rentals are
legal up to 180 days per year, where the owner-investor
is not present. This limit applies to Greater Sydney.
Elsewhere in NSW, there is no upper limit on the number
of days. No Council approval is needed.
- If the apartment is in a strata building, the Owners
Corporation can totally ban owner/investors from using
their apartment for short-term rentals, but not
owner/occupiers from using the apartment for short-term
rentals when they are away, such as on holidays (for up
to 180 days per year). A special by-law is needed,
passed by a 75% majority, to ban short-term rentals
- All hosts will need to register their property.
Airbnb hosts, guests, holiday letting agents, etc will
need to comply with a code of conduct to keep the
neighbourhood peaceful, and observe rules for parking
and garbage disposal.
Of course, there are many fine details. To find out more
Be ready for the new Airbnb /
short-term letting laws which will start in 2019 in NSW
Meriton in trouble for filtering out negative guest reviews
The long arm of the law has caught Meriton Suites and has
fined it $3 million for filtering out negative guest
reviews, leaving the favourable reviews of its serviced
While Meriton is known as a high rise apartment builder,
it has 13 high rise serviced apartment buildings in Sydney,
Sydney Surrounds, Brisbane and the Gold Coast. The hotel
business is proving to be very successful, with 4 more high
rise buildings of what it calls Meriton Suites under
By encouraging guests to post reviews on TripAdviser, the
world's largest travel website, a hotel can increase its
ranking, gain more prominence, and increase bookings. To
encourage guest reviews, TripAdvisor provides a service
where if a hotel supplies it with the email addresses of its
guests and an email template, then it will email the guests
and prompt them to write reviews. It is called Review
Meriton Suites knows that to prosper in the highly
competitive accommodation industry, it needs to encourage
favourable reviews. So it adopted a company policy that the
check out clerk would ask "Have you enjoyed your stay?" If
the response was negative, they would add 'MSA" to the
guest's email address before sending it to TripAdvisor, to
ensure it would 'bounce'. And if there was a major service
disruption, such as lifts not working, they would not send
the email address to TripAdvisor at all.
The Federal Court has held that this is deceptive
conduct, in breach of the Australian Consumer Law. Meriton
was ordered to pay a $3 million fine, to not engage in
manipulating guest reviews for 3 years and to adopt a strict
The lesson for Meriton is to say ‘sorry’ and do its best
to deal with the complaint.
For more information, click on my case note
Meriton Suites fined $3m for
manipulating TripAdvisor Reviews
New NSW policy
welcomes short stay rentals (Airbnb style)
On 5 June 2018, the New South Wales Government announced
a new policy for hosts for short-term Airbnb style holiday
letting. The new policy will affect both owner-occupiers and
The key is a new cap of 180 days in any one year on
short-term lettings for an investment property, meaning a
property that is not owner-occupied. The cap does not apply
to owner-occupiers who rent a spare room or rooms.
Owner-occupiers - who rent 'rooms' in houses and home
units anywhere in NSW - There is no cap on the number of
days in a year that rooms can be let for short-term
lettings. This applies to owners who let part of the house
for short-term lettings, and live in another part. If
breakfast is served, a B & B Licence might be needed from
the Local Council.
Investors - who rent 'whole' houses and home units
outside of Sydney - There is no cap on the number of
days in a year that the whole house or home unit can be let
for short-term lettings.
Investors - who rent 'whole' houses and home units in
Greater Sydney - there is a cap of 180 days in any one
year for short-term lettings. The boundary line for the
Greater Sydney Region is yet to be drawn.
Investors - who rent home units in Sydney - If the
Owners Corporation passes a 75% majority resolution (a
special resolution) then it can ban short-term lettings by
investors of 'entire' home units in the building. This
cannot affect owner-occupiers who let rooms. It is not clear
whether existing bans will be allowed to continue, or
whether a new resolution will be needed.
For all short-term lettings, there will be a new
mandatory Code of Conduct that hosts and guest must follow,
accompanied by a two-strike policy, whereby hosts or guests
who commit two serious breaches of the code within two years
will be banned for five years and listed on an exclusion
For more details on the new rules, click
Is the new NSW
Government policy a win-win for short-term (Airbnb style)
Dreamworld tragedy highlights legal
Duty of Care for theme park guests
Theme park visitors should not need to worry about being
injured, let alone killed, on the rides. They expect to be
in a safe environment - because of the legal duty of care
the theme park operator owes to its guests.
The Thunder River Rapids Ride at Dreamworld was not safe
on 25 October 2016. When the raft reached the top of the
conveyor belt it collided with a stationary raft stuck at
the top. The raft flipped, two adults were killed - crushed
by the raft, two adults were killed - drowned when they fell
through the slats in the conveyor belt, and two children
were thrown clear.
Dreamworld breached its legal duty of care to maintain a
safe ride, and will now face the consequences.
To read more
Sleaze has no place in the workplace
88% of sexual harassment complaints made to the Australian
Human Rights Commission are workplace related. Unwanted and
uninvited 'sharing' of sexual explicit photos and sexy texts
and making comments of a sexual nature, are two forms of
sexual harassment. In a recent decision by the Fair Work
Commission, a Cabin Crew Supervisor on an unnamed airline
was accused of sexual harassment which was primarily
directed to female flight attendants.
Why good lighting on the stairs
reduces liability risk for leisure venues
Good lighting on stairways is a top priority when
operating a club, bar or restaurant to reduce liability
The Publican, the Patron, the
Drinks and the Punch
Given that this incident happens on licensed premises, the
publican has a duty of care to prevent injury to patrons,
which they must fulfil or otherwise be responsible for
Are you a target for consumer claims?
Strategies for Travel Agents, Tour Operators, Airlines,
Railway Operators and Accommodation Providers
We also offer a full service property practice; for
go to http://www.businesslawyer.com.au
The articles in this website provide a summary of the law.
They do not cover the whole of the relevant law on their
Moreover, because legal language is avoided wherever
possible, there may be some generalisations about the
application of the law. Some provisions of the law referred
to have exceptions or important qualifications. In most
cases, your particular circumstances need to be taken into
account when determining how the law applies to you.
For these reasons, the articles are not a substitute for
professional advice. Nor can we accept any responsibility
for any actions you may take or not take, after having read
Liability is limited by the Solicitors Scheme, approved
under the Professional Standards Act 1994 (NSW)
The material in this newsletter is © Copyright. Anthony J.
Cordato. Sydney 2007. A licence to use the material will be
granted, on application, free of charge, where the material
is to be used for self education or for non-profit purposes
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application. In all cases, unless permission is given, the
reproduction of the material by written, electronic or other
form is prohibited.
The pen and ink illustrations are by Yolande Bull, and are
published with the kind permission of Lexis Nexis.
Anthony J. Cordato