Expedia Doing Tricky Yield Pricing?

Expedia Doing Tricky Yield Pricing?

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Expedia Doing Tricky Yield Pricing?

There have been several occasions when I booking travel on Expedia and stop mid-way to then come back to the task a bit later and see that the prices have increased – sometimes by just a bit, sometimes by quite a lot. 

Today, I was booking a car rental and the site kept hanging. After some 10-15 minutes of wrestling, I finally got the transaction to go through and then was met by this message:

We hate it when this happens….The price of your trip has changed from $1,164.07 to $1,281.07. Rates can change frequently. Book now to lock in this price.

First of all, that message strikes me as a little sardonic, don’t you think? 

I doubt that $120 hike translates into all that much for Expedia itself, but when they do it across millions of people every day? Perhaps. And that’s my question. 

The airlines are masters at using yield management to maximize their returns: 

https://en.wikipedia.org/wiki/Yield_management

One of the keys to yield management is having customers with varying levels of price sensitivity. Business flyers tend to be more willing to pay than people on a family vacation. Business flyers tend to book last minute, so one smart strategy for charging business flyers more is to charge more for reservations that are made closer to departure date. 

So my question is this: might Expedia be using some sort of very subtle yield management model that tracks whether you expressed earlier interest in a flight, hotel or car? Might they slightly jack up that rate based on some real-time analysis of the probability that you really want that particular reservation and aren’t that price sensitive? 

For it to work, it would have to be a pretty smart set of algorithms. You’d have to be smart enough about it so that customers didn’t just pop over to the airlines’ websites and book direct – so that means some sort of coordination between suppliers and distributors. I haven’t tried digging into what they’re for, but I do have 33 cookies in Chrome that have been set by Expedia.  

This is just me wildly speculating. I have no proof that anything like this is actually happening. But it’s happened enough to me that I’m starting to get a little suspicious. 

21 comments

  1. I’ve noticed this myself. Something in the back of mind told me it was odd but I dismissed it; probably like most people do unfortunately. Also, couldn’t help but notice the number of “only 2 rooms left” that magically seem to populate every ‘best deal’ room listing;. Even if the hotel that has approximately 2,000 to 3,000 rooms, it doesn’t seem to matter, there are always only 2 rooms left. Amazing! 

  2. I would be a little surprised if Expedia didn’t track your interest and bump up the cost if you don’t complete a transaction immediately. They would be concerned with getting caught of course, but I doubt that would stop them. 

  3. I hope iPan Darius. And yes, Evo Lumin, I hadn’t thought about that, but some of that is suspicious. Could be the allotments they that Expedia has in their ‘inventory’ – at that price. Not sure, but that would be an excellent way to create that kind of artificial constraint in supply. 

  4. Gideon Rosenblatt I remember, about three years ago, hearing a story where some travel/rental sites would quote different prices depending on the OS you were using. Apparently if you were an Mac or iPhone user, they thought you’d be willing to plunk down more money without balking. 

    I have no source to cite…maybe it was just an urban myth.

  5. The U.S. has the highest rate of gun ownership in the world. 

    Guns per capita by country: 

    https://en.wikipedia.org/wiki/Number_of_guns_per_capita_by_country

    And yes, there are a number of other countries (mostly developing, South and Central American countries) with a higher death toll, per capita. Here in the U.S. one in every 10,000 people die from firearms each year. The vast majority of developed countries have rates that are one third or less that: 

    Firearm-related death rate per 100,000 population: 

    https://en.wikipedia.org/wiki/List_of_countries_by_firearm-related_death_rate

  6. Wow, that’s fascinating, M Sinclair Stevens. 

    This not my area of expertise, but I wonder where this stuff starts to violate the law.

    https://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act

  7. Next time this happens, open an incognito window and price the same flight before you log in to Expedia. 

  8. I recently added an item to my shopping cart at Amazon, at the price of $79. A day later, this item still in my shopping cart had increased in price to $185. However, the identical item still advertised by the same seller was still priced at $79. I added the item again, deleted the more expensive version and completed the order. No problem, but YEAH, prices sure can change online . . .

  9. Cade Johnson That’s happened to me, too. I  was so surprised, I had a colleague search for the same item on Amazon and he got the lower price. Like you, I deleted and started over.

  10. Good point, Dave Sparks. 

  11. Wow, that’s weird, Cade Johnson. 

  12. if you’d like to share the experience, consider putting this item in an Amazon shopping cart and see what happens to the price . . .  http://www.amazon.com/gp/product/B00VS270FM?psc=1&redirect=true&ref_=oh_aui_detailpage_o01_s00

  13. It kept the same price for me, Cade Johnson. And now I introduced a new twist for Amazon in their recommendation engine for me. 😉

  14. leave it for a day if you can and see what happens . . .

  15. My bet is that they’re trying to train us to make immediate purchases. That isn’t going to happen with me.

  16. (Cool that you can delete cookies and start over.)

  17. That’s why you use a private/incognito browsing session (to combat cookie tracking) using a proxy or vpn tunnel (to counter IP-tracking) while doing your research, and when you’ve made your choice, switch to your normal connexion and browser session (or again start a fresh incognito session to not have your existing cookies muddle the results).

    Additionally you can set your browser to send a custom user agent header to not get results ‘tailored’ to your choice of browser or operating system, in case they think every mac user has a lot of money to spend.

  18. Thanks Filip H.F. Slagter​. I take it, then, that you believe there is something to what I seem to be experiencing?

  19. Quite likely. I recall seeing a consumer programme on Dutch television some years ago that showed this. Not with expedia in particular, but with several flight comparison/operator sites in general. Of course, several tickets might’ve been booked in your case in the mean time, raising the price due to limited supplies. (Offer/demand principle)

  20. Yeah, Filip H.F. Slagter, seems very hard to prove – and just a quick search online shows that a number of people have tried.

  21. Happens to me all the time on Expedia. I think they are just making extra money or advertising a lower price than what it actually is to attract customers

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