Why hotel and ticket prices change so fast

Photo: depositphotos.com

Imagine: you buy a cup of coffee on a cold rainy day for $ 4,5. Yes, it is expensive, but it is exactly how much coffee costs in the coffee shop that you chose. 2 weeks pass, you enter this coffee house and again you can drink coffee at the same price. Try to do so with renting a car, booking a hotel room, buying tickets for a bus or a plane? We are sure that the prices for this will hardly remain the same.

We are already accustomed to fluctuations in air ticket prices. Finding a ticket with a good price sometimes turns into a whole game or competition for travelers. However, if you are unlucky, you will have to shell out a lot more for the ticket than it “usually” costs.

According to airline business practice, the price of tickets may depend on many factors, including supply and demand. This is called "dynamic pricing." However, no matter what you call this approach, you will not lack dynamism in preparing for travel.

For example, you are going to go to Las Vegas on 9-12 May. There you want to book a hotel room Las vegas marriott. It seems to you that on weekdays everything will be cheaper than on the weekend. Not so much: instead of profit, you pay all $ 303 per night. A week later, the same room will cost $ 131 per night. All the fault National hardware showwhich will be held in Las Vegas on 9-11 May. The show is expected to attract 30 to thousands of visitors.

It seems that the price is determined only by supply and demand. These are indeed determining factors, but not the only ones. “Dynamic pricing or price increases is price discrimination that has been around for 100 years. For example, two people are shown different prices for the same product. The difference in price is justified by different costs,” explains George Hoffer, an economist at the University of Richmond in Virginia.

Guided by Hoffer's logic, it is clear that there must be different conditions for successful price discrimination. For example, the prices of air tickets are rising during the holidays.

“Airlines have 20 different fare codes. This means there could be 20 different levers that can be used to control pricing,” says James Filsinger, chief executive Yapta.

Uber uses proactive pricing when demand may exceed supply. This explains why the trip from Los Angeles Airport to the city at 6: The evening on Tuesday was $ 30, and the trip at noon on Thursday cost $ 27,17.

Does dynamic pricing have a positive effect on society? Perhaps, but your pocket may not agree with that.

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