Do Booking Sites Raise Prices Based on Your Habits?

Ed Perkins, January 30, 2015
Fares from Washington DC:

    When you search for a hotel room on a travel website, does the website's software recognize you, and does it adjust the price display based on that recognition? A new report goes some way to answer that question. And the short answer is, "Yes, in some cases, but the price differences are generally small."

    Last spring, a research team at Northeastern University conducted a detailed study of online hotel-price presentations, specifically targeting two aspects of website personalization: manipulation of the order and price categories of hotels displayed to consumers and displays of different price information to different searchers.

    The test covers six online travel retailers—Cheap Tickets, Expedia, Hotels.com, Orbitz, Priceline, and Travelocity—for different date ranges and locations in 10 popular destination cities around the world. The test includes anonymous searches through proxy servers, searches from computers that allow the sellers to store cookies, and searches from iOS mobile devices. It also tests whether travelers who sign in to a website as a "member" get different prices. Although the report is highly technical and full of statistical jargon, some overall results are apparent:

    • CheapTickets and Orbitz—actually the same company—present slightly different ordered hotel lists to travelers who are logged in to an account than to those who are not logged in or do not have any stored cookies. And these "known" users receive different prices on about 5 percent of the hotels, with an average price that is $12 lower than the price to the unknown users.
    • Hotels.com and Expedia (also common ownership) return hotel lists in differing order, and they steer some apparently random user groups toward higher-priced hotels. Everyone sees the same prices, however, so the researchers conclude there is no price differentiation.
    • Priceline apparently bases its presentation somewhat on users' histories, but it does not show any price differentiation.
    • Travelocity alters results for travelers who search from iOS devices, but the results do not seem to steer users toward higher or lower prices. However, it does offer lower prices, by an average of $15 per night, to iOS searchers.

    The takeaway from all this seems to be that, at least within the limits of this research scope, logging in to an account—regardless of the nuisance—doesn't set you up for price gouging; instead, in a few cases, being "known" to a seller might actually lead you to better deals. But a limited test in 2014 doesn't mean that you won't be setting yourself up for a gouge in the future, especially given the likelihood of more and more "dynamic" pricing. And it doesn't mean you shouldn't check more than one source for any hotel (or airfare) purchase. Keep in mind:

    • Online Travel Agencies (OTAs) like Expedia, Orbitz, and Travelocity mount transactional websites, meaning that you actually buy from that agency. Because OTAs resell the service, they can—and do—sometimes offer different prices than the primary hotel or airline suppliers, especially when they bundle different components.
    • Metasearch websites such as TripAdvisor and Kayak search a wide variety of primary suppliers and OTAs. They pass you through to the primary suppliers' websites to make the actual purchase, so they don't alter the pricing themselves.
    • Primary suppliers—hotels, airlines, car-rental companies—often offer specials and bundles that neither OTAs nor metasearch engines can currently identify.

    Thus, known shoppers might well find better deals on OTA or primary supplier websites than unknown shoppers. On the other hand, if you're concerned that a transactional site will sometime use the knowledge of your identity to scam you, you can also search anonymously by clearing cookies and using your browser's "private" search option. (If you set your computer to disable all cookies, however, you'll lose the convenience of those saved usernames and passwords. Hey, nobody said computers would be easy.) The study also covers "general" retailers, such as Best Buy, Office Depot, and Walmart.

    Read the detailed report here.

    Ed Perkins on Travel is copyright (c) 2015 Tribune Media Services, Inc.

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    This article was published by SmarterTravel under the title Do Booking Sites Raise Prices Based on Your Search Habits?  Follow Ed Perkins on Google+ or email him at editor@smartertravel.com.

    (Photo: Image Source/Getty Images)

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