Do Travel Sites Charge More If You Tell Them You're Rich?

from the clever-pricing dept

One thing that really irritates savvy shoppers is when they discover that somebody else got a better deal than them. This is likely to occur on airplanes, as airline-pricing algorithms tend to be opaque and highly variable. That's given rise to new sites which try to anticipate when the airlines will offer various prices. One consequence of this so-called price discrimination is that companies are likely to pursue personal information on its shoppers so as to anticipate the highest price a given shopper is likely to pay for an item. But while customers are understandably miffed when companies harvest their personal data, is there anything wrong with less invasive forms of price discrimination? One traveler discovered that an online comparison engine listed different prices for the same hotels depending on how the search was conducted. If the searcher wanted results listed from highest to lowest (presumably an indication of their wealth and their desire to stay on top-rate hotels) the listings for a given hotel turned out higher. People may not like this, but that's not necessarily the right response. Variable pricing allows the price-insensitive to subsidize the price-sensitive shoppers that put in the effort to find a good deal. Of course it's a catch-22, by exposing these methods, companies are likely to change them.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Andrew N., Jun 30th, 2006 @ 10:46am

    hmm... that's just...

    ...low. Really, greed is just taking over this country (probably did a long time ago). Whatever happened to honesty? Just because we see a lot of moral decay, does that mean we're supposed to shrug our shoulders and say, "Well, that's just how it is." Sigh....

     

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  2.  
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    Adam, Jun 30th, 2006 @ 10:48am

    travel savings on ultimate search engine.

    Power Search metasearch technology takes you to over 200 different sites to give you results. it work great!! Also there is a way to sign up adn become a travel agent of your own and recieve huge discount on travel. www.travelpresentation.com to find out more. Email me anhjorth@gmail.com and we can get you travel agent credentials so you can travel at wholesale prices!!!

     

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  3.  
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    anonymous coward, Jun 30th, 2006 @ 10:50am

    i hope the scheming bastard that came up with the idea of variable pricing based on search patterns got the raise and promotion that he so richly deserves! its that kind of weasely scheming that makes America great!

    cheat everyone whenever you can and cheat the stupid even more.

     

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  4.  
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    Mike Mixer, Jun 30th, 2006 @ 11:04am

    This is a return to haggling

    The truth is that this is a different form of an old art in merchandising called the haggle. In the old days a vendor had his customer right in front of him so he used visual cues to estimate how far he could push the price and still make a sale. This new way is just as valid and has nothing to do with subsidizing others who are not as wealthy, it does have everything to do with selling the most product you can for the most money you can make. There is no dishonesty in
    this process, just two people making a deal.

     

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  5.  
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    Anonymous Coward, Jun 30th, 2006 @ 11:12am

    Current trends mean that no two people will pay the same price for the same products in the future...

    Coca-Cola tested vending machines in 2000 that raised the price of a Coke on hotter days...

    Grocery loyalty programs are also a good example... If you are silling to sacrifice your privacy (shopping patterns), you can pay less than your neighbor. And if you buy Coca-Cola every week without fail... don't be surprised if your neighbor (a Pepsi fan) gets Coke coupons in the mail and you don't.

    http://www.fastcompany.com/magazine/68/pricing.html

     

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  6.  
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    Matt, Jun 30th, 2006 @ 11:18am

    Different rack rates

    Does it occur to anyone that there are different rates for different rooms?

     

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  7.  
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    Mike (profile), Jun 30th, 2006 @ 11:50am

    Re: Different rack rates

    Does it occur to anyone that there are different rates for different rooms?

    This could be true, but if you look at the actual site, you'll notice that the lower prices aren't even available if you click on the sort by higher price. In other words, it doesn't even give you the option of looking at the cheaper prices.

     

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  8.  
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    Matt, Jun 30th, 2006 @ 12:02pm

    re:Different rack rates

    Actually, I don't see the option to sort by higher price at all.

     

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  9.  
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    Anonymous Coward, Jun 30th, 2006 @ 1:26pm

    Re: travel savings on ultimate search engine.

    don't spam forums jackass

     

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  10.  
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    aReader, Jun 30th, 2006 @ 1:39pm

    Apply same model to customer service

    I know a couple of banks that uses a customer service model where the level of service is proportional to the amount of money in your bank accout. When you call a bank and enter your account number, your wait time and the person whom you will talk to (India vs US) is decided based on how much money you have in your account.

     

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  11.  
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    steve, Jun 30th, 2006 @ 1:59pm

    Re: Re: travel savings on ultimate search engine.

    He isn't spamming its a great way to search all the travel search companies prices. It debunks this story by comparing everyones price for rooms.... Jackass

     

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  12.  
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    Nonesuch, Jun 30th, 2006 @ 7:58pm

    Re: Apply same model to customer service

    When you call a bank and enter your account number, your wait time and the person whom you will talk to (India vs US) is decided based on how much money you have in your account.

    Giving preferential treatment to people who've already given you money is ethical, and a good business practice -- charging prospective customers more based on their percieved ability to pay is, IMHO, unethical, borderline illegal.

    It just makes sense to give better service to customers who have given you more business -- but if my bank charged me higher fees than somebody who had less on deposit because they felt I could afford them, I wouldn't stand for that.

     

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  13.  
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    jeff, Jul 1st, 2006 @ 1:54pm

    i already don't fly on my own dollar BECAUSE of stuff like the airlines' pricing methodologies. americans are getting to numb, when an industry does shit like this, you boycott it and they either shape up or sink, the government can only bail their asses out for so long...or, you can be a pussy and put up with it. you've always got a choice. like the choice to not pay a few hundred dollars for a space that's narrower than your hips, shorter than you sitting down, and you only get to be in for a few hours. oh and don't forget the 3 peanuts you get to savor...assuming some defect on the plane isn't allergic to peanuts, of course. THEN IT'S TIME TO BREAK OUT THE FIESTA MIX, WOO HOOO!!

    personally, i like taking trains.

     

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  14.  
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    Michael, Jul 2nd, 2006 @ 2:37am

    Its working so well

    It amazes me that others are looking to the failing airlines as a business model. When an airline goes under there is a sense of 'they got what's comin' to 'em' form the public. If I ever tried to run a business like these fools, I'd be laughed out of the marketplace:

    Customer: "Yes, we would like to purchase your service at the price you quoted"

    Me: "I'm sorry, that price is no longer available"

    Customer: "You quoted me the price five minutes ago"

    Me: "Yes, that was the old pricing. At this time, the cost of the service has gone up 50%"

    Customer: "F*ck you"

    Me: "That's what I was hoping to do to you. Oh, by the way, that last quote is no longer available. It has gone up again. You better purchase now... Hello, hmm, we seem to have gotten disconnected"

    ***

    Any business model where the customer is treated like a stooge, should be put out of business by the would-be customer.

     

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  15.  
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    Celes, Jul 3rd, 2006 @ 11:30am

    Comparison shopping

    Perhaps a way around this is to look at the websites of the individual hotels/airlines/etc you are considering directly, rather than relying on a travel site. Although travel sites are useful, they don't always offer the best deals (for hotels, anyway, since that's the industry I have the most experience with). At least a few of the major hotel chains have an agreement/policy that states that the rate you receive from the hotel's website/reservations line will ALWAYS be the same or less than rates you receive through these travel sites. And the hotels don't ask you how you want to sort the results...

     

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  16.  
    identicon
    Anonymous Coward, Jul 3rd, 2006 @ 1:09pm

    Re: Re: Apply same model to customer service

    they already do in many cases, dolt. minimum or monthly fees waived with certain deposit minimums etc. get a clue. this stuff happens all the time.

     

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  17.  
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    Anonymous Coward, Aug 7th, 2008 @ 12:25am

    Re: hmm... that's just...

    what is the purpose of comparison of charge accounts

     

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  18.  
    identicon
    July, Feb 23rd, 2009 @ 12:37am

    Great work

     

    reply to this | link to this | view in thread ]


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