Questions of Ethics: Mom Never Told You Booking a Cruise Would Be So Difficult

That was the story as it was covered by two or three media outlets. Others either haven't heard of it or didn't care. As we discovered when we looked into it however, there's much more to the story, and neither the story nor covering it is as simple as it seems. So far only a few people have come forward and said they have been directly affected, but in the coming weeks it appears to us that this story is going to take on large proportions as more passengers realize they are part of it.

What makes this story difficult to cover is that Holland America issued just one brief, but very pithy, statement, and no one there nor at the travel agencies wants to speak about it on the record. The only ones who really want to talk about this are the unhappy customers and completely unaffected - but outraged - people on bulletin boards.

There are contained in the story some very important issues, however.

For those reasons, we are going to report this a little differently than most stories you read in CND. Much of what I've learned _ and in this case it has been volumes _ has been by talking to people off the record and putting that together with other things I know. Almost always when you read something in CND, we tell you who said it, and they are fine with us reporting it. Seldom have we ever attributed something to "a source speaking on the condition of anonymity." In this case, I'm going to depart from that standard because this is an important issue, and some of the things I tell you, will just have to be taken on faith, but I'm 98% sure of them. Without doing it this way, I could only tell you a little more than is in the first paragraph.

One important point that is not getting out in this issue is the number of cabins which were priced incorrectly. People seem to have the impression this only involves a few cabins and only a few thousand dollars are at issue. Holland America isn't saying, but reliable sources are telling us it was in the hundreds - multiple hundreds. So far the people who have come forward indicate they are being asked for about $1,100 per cabin. If that is average, then it becomes easy to understand why Holland America isn't automatically just absorbing the difference. This could easily run reach a half million dollars, and most likely more.

Another point in Holland America's favor that isn't being highlighted is that Holland America advised the agents involved of the error immediately. The incorrect prices were loaded on a Friday night. The error was discovered on Tuesday morning and by the end of the day the fares had been corrected, and all the travel agencies had been notified. The travelers who are complaining are saying they weren't contacted until weeks later. We suspect that what was going on was that the agencies were expecting to contact Holland America and have absorb the fare difference, and therefore delayed telling their customers. Nonetheless, Holland America WAS prompt in reporting the error; it wasn't their fault if agencies chose not to be prompt in at least letting their customers into the loop.

Additionally, Holland America was offering compensation for the error in the amount of a $100 onboard credit. If paying the correct (higher) fare wasn't acceptable to the customer, they also have the opportunity to cancel without penalty.

I've seen a number of people online calling it a stupid public relations move not to honor the incorrect fares because of the way it may affect future sales. There is evidence that the decision on how this would be handled was made at the highest levels in the company. These are not stupid people running Holland America, and they are well aware of image and goodwill. Since they made the decision they did, it says one of two things. Either they think the dollar amount of absorbing the incorrect price outweighs the value of the future lost business, or, more probably, they just don't believe they can afford to give away this amount of money right now.

Given the approximate number of cabins I believe were sold, and the number of people who are actually coming forward reporting they were one of those affected, I believe there are still many, many who are yet to be told by their travel agents of the pricing error. The agents are perhaps believing they can still in some way negotiate Holland America into absorbing the price difference. I’m told Holland America will not acquiesce in this case.

Early on, I didn't see why so many cabins were sold, given when the error occurred. This happened in mid-September, and the fares were available for sale basically on two weekend days (when typically there aren't as many sales as on a Monday), a Monday and a Tuesday (but if the agents were reading their e-mail on Tuesday, they would not have continued selling during much of the day on Tuesday). They were for ten 11-day Caribbean sailings during the months of January thru April, which were four to six months in advance.

Limiting sales even more was that these were for group fares offered just by "a select number of travel agencies." They were not available to consumers on HAL's website, by calling HAL directly or even though most travel agencies.

Given all those conditions, there should have been a relatively small number of sales, but with the number of cabins I believe to have been involved, it says something else was at work. Some of the agencies which had the incorrect rates are outlets whose business is based on selling deeply discounted travel. It appears to me that some of them realized the space was pricing abnormally low, and exploited the pricing mistake by actually promoting the erroneous rate, probably believing Holland America would honor it for them.

There are also indications that agents involved would have had evidence in their offices that the group rates they were selling were indeed different (substantially lower) than the ones they had contracted. They normally wouldn't have verified those during the selling process, unless they felt the rates looked suspiciously low or high, but once they were alerted to the fact that the customers owed additional money, they could easily verify that they had been selling prices lower prices than which they had contracted.

So that brings us to some difficult ethical questions.

While there are lots of points in Holland America's favor, we don't believe they are totally off the ethical hook. After all, they did make a mistake, and there were probably at least some people who bought (and at least some agents who sold) cabins unwittingly as to what had happened. Holland America has done what they could to mitigate any real damage (not disappointment) to the consumer. They admitted the error, and they promptly advised the agents of the problem. If the agents had promptly passed the word along to their customers, everyone would have known a maximum of four days after they made their booking (for cruises four to six months away), the vast majority within a day or two of booking. HAL just wants the passengers to pay the correct fare, which is still less than other passengers booking at the same time through other agencies or directly through HAL were paying, and HAL is offering them $100 onboard credit besides.

So should Holland America accept the complete financial responsibility for their mistake, no matter what the cost to them?

One has to consider if the individuals who call for them to do that always do that in their own lives. If they were to make a small mistake at work, a mistake that would cost their company a hundred dollars to cover for them, would they ante up? But what if it were large enough that it would take their entire next month’s paychecks to cover it? Would they be so quick to try to cover it, or would they depend on others' sense of doing the right thing to try to preserve their paycheck and be able to make their mortgage payment?

There are lots of travel agents weighing in saying they will be reluctant to sell Holland America because they can’t depend on them to stand behind the prices they quote. But you have to wonder if the situation were reversed and those agents misquoted a price by a thousand dollars or invoiced a customer incorrectly. Most would probably say it was a matter of integrity and they would certainly stand behind the price to ensure their customer's loyalty. But what if the price they misquoted was then booked by a few dozen or a hundred people, costing them tens of thousands of dollars?

For most people, it seems to be a matter of degree. A matter of how much money is involved.

What about the agents that exploited the pricing error by promoting it? If you go into the grocery store and find that the soda scans for a dime rather than a dollar, do you say anything about it? Or do you consider it a bargain? The clerk may note the discrepancy so it can be corrected, but tell you it's the store's policy to let the customer have it for the price as it scans. You got a bargain. But then when you know the price is wrong, do you go right back and buy another dozen bottles before they can change the price in the computer?

Does the amount of time before the error is caught have anything to do with it? These days in most stores, the clerks depend on the cash register to determine the amount change they should give you. Suppose you give the clerk a ten-dollar bill for your purchase, but the clerk enters the amount tendered as $100 and without thinking just gives you an extra $90 in change. Without noticing, the clerk closes the cash drawer and you close your hand and start to walk away. At that moment, the clerk realizes what happened and says he thinks he gave you too much change. Would you say that's too bad because he's already finished the transaction? Essentially that's what these people are saying to Holland America.

There's no black and white answer to this one. Everyone needs to decide this for themselves. Nothing is going to change no matter what anyone decides, except for the executives at Holland America, and they've already made their decision.

What concerns me most is the dangerous precedent that's being set by a travel supplier quoting a price, invoicing it, accepting money on the booking and then coming back and wanting to increase it. In this case, it appears Holland America has lots of things in their favor on the big scale of ethics: There is evidence that this was an honest mistake. Holland America notified all the booking agents immediately - in a matter of days or hours after booking, so it would be exceptional if anyone were actually damaged by this, aside from being disappointed they didn't get the outstanding bargain they thought they did. Holland America is just asking people to pay what was the correct price. If anyone wants to cancel, they can, and there is no penalty.

So in this single instance, I think in the court of public opinion, Holland America should be given a pass this time. But if they do it again within a decade, they're toast.

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