Finding the cheapest flight or hotel room becomes increasingly difficult. In the coming months it will be almost impossible. So much so that the times when – as a study of Airlines Reporting Corporation and Expedia calculated a year ago – to save «up to 36%» on the ticket one had to «book the weekend» with a departure «set between Thursday and Friday »and« in any case twenty one days after the ticket was purchased ».
Big data
In recent times, booking and pricing systems have become so sophisticated – thanks to artificial intelligence, big data and a myriad of start-ups – that now the cost of that flight and that room ends up changing even 30-40 times a day. In short, identifying the most convenient value is equivalent to winning the lottery. It has passed – as explained to Courier service who deals with pricing – from “dynamic pricing” to what Angela Zutavern of AlixPartners, in her book quoted by New York Times«The Mathematical Corporation», defines «hyper-dynamic pricing».
The pricing
What happened? In recent years, the emergence of several online platforms that follow the fluctuations in flight and hotel prices and report them to users – such as Hopper – has led hundreds of thousands of customers to take home respectable purchases: Europe flights- Use for 249 euros (round trip), a week in a hotel in Manhattan for 20 euros a day. Until 2017-2018, companies and hotels relied heavily on the “dynamic price” which was based on the combination of the classic rule of supply / demand, adding historical precedents, seasonal data (on New Year’s Eve it costs more, after January 6 less). An habit that also required greater human involvement.
The new approach
Today dynamic pricing is only the starting point. Because the algorithms vary the cost of flights and rooms dozens of times a day because considering dozens of other variables, almost all “caught” by the web / social world. The big geopolitical and local events, the weather forecast (good weather or historical cold wave), trending on Google, Twitter and Instagram, social media (of famous people), sporting or musical events: all this now enters the database of the algorithm that decides the rates in order to maximize the revenues for the companies.
Constant changes
For this – as Hopper explains to New York Times – New York-London flight prices have also changed 70 times in two days. “Big data are giving us a big hand because they do what we wouldn’t be able to do humanly: cross billions of information,” he says to Courier service a Revenue management executive of one of the largest low cost companies in Europe who asks for anonymity because he is not authorized to talk about it with the press on sensitive topics. “It is not elegant to say it, but unwittingly it is our potential customers who tell us to make them pay more for our flights.”
February 5, 2020 (change February 5, 2020 | 18:58)
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