Hostels warned on luxury claims

A leading travel and tourism lawyer has warned backpacker operators they face a deluge of law suits from disgruntled customers if they fail to live up to the claims in their marketing material.

Anthony Cordato issued the warning after the Consumer, Trader and Tenancy Tribunal of New South Wales ruled against mainstream tour operator Club Med in a case testing its website´s claim that the room provided in the St Moritz Roi Soleil resort offered “luxury of the highest standard”. Rejecting Club Med’s argument that luxury cannot be measured, the tribunal ruled the description misleading and ordered the operator to pay $4,000 in compensation.

Writing exclusively in this issue, Cordato urges the backpacker sector to exercise caution in its advertising.
“Luxury is overused to describe accommodation – from resorts to backpacker hostels. Be selective when using the word to describe accommodation, otherwise a law suit could be heading your way.”

An investigation by Backpacker Trade News found many hostel websites using the “L” word in their online marketing, but Cordato warned they are flirting with danger.
“Relative terms like ´premier´ or ´executive´ are okay as long as they are referencing to a basic standard. But words like ´luxury´ and ´deluxe´ are not relative, they have connotations of comfort which have to be justified – and that´s where the problem lies.”

Executive Officer of the Backpacker Operators Alliance Victoria (BOAV) Tom Stafford presented a different slant on the interpretation, citing the National Tourism Awards entry criteria in the industry’s defence. The NTAs equate ´standard´ with three-and-a-half stars under the AAA Tourism Star Rating Scheme, ´deluxe´ with four-and-a-half stars and ´luxury´ with five stars plus.
“So if a hostel has a five star AAA rating in the backpacker category, it should be able to claim luxury status.” said Stafford. “It might not be the Hyatt, but within the context of backpacking it offers a superior experience.”

Have your say