Dynamic pricing CAN benefit the travel industry and travellers
The ticket row that rocked Britpop legends Oasis’ re-union tour highlighted a perceived unfairness in pricing. Dynamic pricing also generates controversy in the travel sector over inflated prices at peak periods.
In February, The Independent suggested UK parents paid 16 times more during school holidays. Yet, as school resumes in September and prices drop, winners emerge as well as losers.
Journey Mentor’s holistic travel ecosystem ensures more win than lose for customers and industry alike.
Dynamic pricing marries a range of complex factors such as trends and demand in real time. It lets airlines accurately adjust ticket prices and maximise revenues.
Many travel companies remain wedded to legacy revenue management systems (RMS) that ‘decide’ based on historic data, less meaningful after the pandemic and cannot cope with unexpected peaks/trends.
The fact is, running an airline or hotel is expensive. A lot of travellers would be outraged to pay their seat’s true value (reflecting fuel, landing costs etc). So, usually, they don’t.
To keep afloat, airlines often resort to unpopular ‘sneak’ charges for luggage or food instead.
In a world of finite supply, dynamic pricing is more realistic. It rewards people for travelling off-peak. It ensures airlines fill seats as profitably as possible. But as in the case of Oasis, it can cause howls of outrage.
Journey Mentor brings dynamic pricing and wider sales to the table creating fewer losers. We use dynamic pricing to relate all components (flights, hotels, cars etc) to the market. By treating a trip as a whole, companies may still offer better overall deals at peak times. If the flight is more expensive, the hotel may be cheaper.
eCommerce portals using our technology carry on searching for better deals even after a trip is booked and paid, using personalisation to identify individuals’ unique preferences and pain points. So, if the price drops at a later date, it gets picked up and the savings is offered to the user. This is a clear example of dynamic pricing benefitting the traveller.
Airlines, agents and suppliers are able to improve revenues through additional discretionary sales rather than sneaky charges.
Linked to this ecosystem, dynamic revenue management gives companies full transparency over competitors’ prices enabling effective competitive decision-making.
Get in touch to find out what else Journey Mentor can do for your business today.
Oasis tickets: Dynamic pricing row prompts government probe – BBC News
How much? Parents can pay over 16 times more by sticking to school holidays | The Independent
How are airline ticket prices determined? – Bristol Groundschool
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