Travelocity introduced its new price guarantee for hotels, which goes beyond Orbitz Price Assurance, and clearly Travelocity’s action is prominent in Orbitz’s radar.

“When they [Travelocity] come up with a program that is as customer-centric and automated as ours, then we can have a conversation,” says Brian Hoyt, an Orbitz Worldwide spokesman.

Hoyt adds that Orbitz will monitor the market impact of the Travelocity program, which he calls “interesting, but I still don’t think it is a more compelling program.”

In sum, with the Travelocity hotel program, consumers can submit claim forms if they find an identical room rate on any website (excluding opaque programs run by the likes of Hotwire and Priceline) and receive a refund check for the difference if their Travelocity-booked room is higher.

In contrast, Orbitz does the auditing itself and automatically sends refund checks if a lower rate for the same room appears on Orbitz.com alone.

So, in addition to the varying scope of their respective programs, the claims process is at issue, too.

Travelocity essentially says that consumers don’t trust “the man” [my words] i.e. Orbitz to be in charge of when a refund check is called for, and Travelocity says surveys show that consumers  prefer to do the price-monitoring of competing rates on their own.

The issue is a senstitive one for Orbitz because it has been busy, with its Total Price Hotel and Hotel Price Assurance programs, positioning itself to consumers as the optimum place to book hotels.

Hoyt of Orbitz says the Travelocity program is burdensome for consumers because they would have to scour the Web to see if there is a lower base rate than the one they booked on Travelocity, adding he’s interested to see how many consumers actually will follow-through and make claims.

He points out that if consumers indeed find a lower hotel rate than the one they booked on Orbitz, then they can just cancel their Orbitz booking without penalty because Orbitz has waived change and cancellation fees. (Orbitz waived the fees about six months ago, and Travelocity began doing so today, Oct. 28, 2009.)

In addition, consumers on websites like Orbitz and Expedia have 24 hours to recoup a refund check if they find a hotel rate on another website that is cheaper than their confirmed bookings.

Hoyt acknowledges that the Travelocity’s new hotel guarantee, good for up to a day before the stay and covering other websites, provides a longer window than Orbitz’s 24-hour, multi-website guarantee.

But, with consumers’ ability to cancel and rebook without penalties, coupled with automated hotel refunds and transparency in hotel pricing on Orbitz, Hoyt says he’s “confident about the program we have now.”

However, headlines like Chris Elliott’s, Travelocity offers an “unprecedented” new price guarantee — should I switch online agencies? can’t be very reassuring to Orbitz.

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