What's dynamic pricing?

Anyone who’s tried to get a cheap flight knows it can be akin to finding a needle in a haystack. Far from what all the emails suggest, actually trying to take advantage of a flight sale is much easier said than done. Even as someone who knows the best days, times and ways to book a flight, it’s rare even for me to end up getting a great fare deal.

And sadly, things are only going to get worse, with Travel + Leisure predicting the widespread introduction of ‘dynamic pricing’. Essentially, dynamic pricing is the ability to charge different customers different fares. Not surprisingly, the purpose of the exercise is to boost airline revenue.

While surge pricing isn’t a new concept – most of us would be all too familiar with it, thanks to Uber – airlines have previously only used it to adjust fares based on demand, that is, for flights around holidays or Christmas, which are often much more expensive. The difference is, dynamic pricing would see airlines setting fares according to the customer’s personal flight history.

So, how does it work?

All an airline needs is a passenger’s IP (Internet Protocol) address. From this point, specially designed dynamic pricing software can see the individual’s search history allowing them to create a personalised profile of their flight purchase history. This profile then dictates what the passenger would pay, with the software setting the fare price accordingly.

Aside from the obvious argument of this being frustratingly unfair, the main issue here is that purchase habits will forever dictate the fares offered to passengers. .The result? Loyal customers and leisure travellers are likely to pay less than business travellers, even the occasional ones, who the software will deem are ‘willing to pay more’.

The best thing you can do is to use private browser windows when searching for flights and to use a range of devices. The more you are seen to be looking at the same flight route, the more those tracking cookies think you are set on purchasing it, regardless of the cost.

Bring back the days of travel agents, we say!

You can read more about dynamic pricing at Travel+Leisure

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Written by SJ


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