Andy Daniel thought he had found a terrific airfare from San Francisco to Miami for Christmas. Instead, he found a terrific disappointment.
When Daniel tried to book a $400 ticket advertised on Expedia, the price suddenly more than doubled.
“I called Expedia and a very polite, helpful agent apologized for the problem and found my $400 fare,” says Daniel, a microchip designer from Palo Alto, Calif. “She tried to book it for me — and then informed me that the fare had changed to $900 ‘because fares can change in seconds as tickets are purchased.’”
Right.
Bait-and-switch offers are one of the oldest — and most popular — tricks in the travel trade’s book.
Maybe that’s one reason why customer ratings for online travel agencies such as Expedia are on the skids even as e-commerce companies as a whole are getting their highest marks in history. The authoritative American Customer Satisfaction Index earlier this year found that grades for the three major online travel sites dropped, with Expedia slipping almost four percent to a score of 75 out of 100 and Travelocity and Orbitz both receiving a 73.
That’s a low “C,” in case you were keeping track.
This isn’t limited to the three big online agencies, of course. Airlines, hotels and car rental companies have suffered similar declines in customer-service ratings. It would be unfair to pin this poor performance entirely on their slippery price displays. But it would be equally unfair to claim these fluctuating fares had nothing to do with it.
Travelers don’t trust their Web sites any farther than they can throw their desktop computers. Which isn’t very far.
I asked Expedia about its fare displays, and specifically about Daniel’s problem. Turns out the online agency has two systems that track airfare availability: one for shopping and one for booking. “While uncommon, the two systems will rarely return disparate fares, as appears to have happened in this case,” says Expedia spokeswoman Katie Deines. “It speaks to the highly dynamic nature of pricing and availability. Expedia works throughout the booking process to verify pricing and availability so we are showing customers the latest information.”
But travelers don’t care about the highly dynamic nature of pricing and availability. When they see a low fare one minute and a higher price the next, they call it a bait-and-switch. So do I. The price you’re quoted should be the price you pay. Every time.
Not everyone agrees with this simple assertion. One of my colleagues took me to task for referring to Delta Air Lines’ fare displays as a “bait-and-switch” a few weeks ago, claiming that it revealed my ignorance about the highly dynamic nature of pricing and availability.
I wish I was wrong about this, but I’m not. Calling these illegal sales tactics by their correct name reveals my indignation with the system — a system, I would add, that a lot of so-called “experts” not only accept, but also defend, even as the customers whose interests they’re supposed to represent are foiled when they try to buy a ticket.
But wait. Aren’t travel companies — particularly online travel agencies — just victims of this scheme, like us? Not really, says Chris Lopinto, a partner for a site called ExpertFlyer.com that lets you connect directly to the computer reservations systems used by airlines. Without getting too technical, here’s what you need to know about how prices are set: Fares and rates are loaded into these reservations systems and adjusted by the minute in order to maximize revenues for the travel companies. Companies use a team of math whizzes to predict demand and instruct the systems how to set the prices. Think of it as a game of “chicken” on a grand scale. And it’s played by nearly everyone in the business.
“The average person doesn’t understand what’s happening behind the scenes,” Lopinto told me.
We may never fully comprehend what’s commonly known as “yield management” in the travel industry, but there are a few ways of making sure you don’t become a victim of these deceptive pricing practices.
Always read the fine print
Beware of terms like “as low as” and “starting at” — as in “rates as low as $99” or “fares starting at just $49.” They’re almost always followed by “taxes not included,” “based on a roundtrip ticket” or “based on double accommodations” in four-point type on the bottom of the page. Perhaps the worst offenders today are airlines. They’ve begun a practice called “unbundling,” which is a sophisticated bait-and-switch tactic. By removing the cost of meals, luggage and advance reservations, they are making their prices seem artificially low. But when everything is added up, the ticket often costs much more than you expected. Incidentally, airlines love unbundling. In a recent earnings conference call, a Delta Air Lines executive declared, “a la carte pricing is where we need to go as an industry.” Do yourself a favor. Next time you hear the word “unbundling” just substitute the words “bait and switch.” It’s much easier that way.
Don’t count on a price until you have a confirmation
Most travelers believe a price quote from a travel company is like seeing a price tag on merchandise in the store. They couldn’t be more wrong. The price you see is almost never the price you actually pay, because at best, taxes, fees and surcharges are added to it. And at worst, the price changes between the time you get the quote and the time you click the “buy” button. Incidentally, why is it that you never hear of a fare going down during the reservation process? If prices are so highly dynamic, why can’t they be dynamic to the downside every now and then? Just something to think about. Bottom line: don’t count on a price until you have the confirmation e-mail and your credit card is charged.
Avoid the worst offenders
If you’re unsure about a travel company’s offer, you might want to consider what the Federal Trade Commission has to say about it. The government agency publishes an archive of case files going back to 1996 that could shed some light on the company you’re thinking of booking a trip with. Unfortunately, the worst offenders change their names, move and start another questionable business until they’re slapped with a “cease and desist” letter from the government. Another good place to look is your local Better Business Bureau which keeps files on businesses, including any recent complaints from consumers.
Use a travel agent
Competent travel advisers can spot a bait-and-switch offer from a mile away. It’s what they get paid to do. But not every agent is competent. Christine Austin, a homemaker in Louisville, Ky., swore off her travel agent after she fell for one of those “now-you-see-it/now-you-don’t” fares. “She called, told me the fare, and ten minutes later called back and said the lower fare had disappeared while she was talking with me,” she remembers.
Since timing was important, Austin felt she had no choice but to buy the more expensive ticket. I think a good agent would have handled the situation differently — either by explaining that the first price was just a quote, and that prices could change, or by waiting until she was ready to buy before offering a price.
If it looks too good to be true, it probably is
Perhaps the easiest way to spot a bait-and-switch offer is to ask: Does this look too good to be true? If it is, then run, don’t walk. Reader Marianne Ventruella received one such offer in the mail last year that offered everything but the kitchen sink.
It included a travel voucher in the amount of $1,600, a cruise, resort visit and theme park tickets. She phoned the company and was connected to a salesman who insisted that she make an immediate purchase. “I knew it was a scam,” she says. Others aren’t so lucky.
I can’t cure the travel industry’s bait-and-switch epidemic in a single column. It takes concerted action by consumer groups, government regulators and fellow travelers like you.
But with just a little research, a skeptical attitude, steering clear of the worst companies and finding professional help, you won’t just minimize your frustration. You also won’t fall for the oldest trick in the book.
{ 10 comments… read them below or add one }
I have to point out that the problem that Expedia, Orbitz and their ilk have is that what the consumer sees can be up to 4 hours old. Given that airlines change their rules and fares more than a million times a month and that frequently there are a limited number of seats for the low fares, this time lag creates the situation that Andy Daniel ran into.
Christine Austin’s situation is one that happens periodically due to the fact that airlines are allowed to participate in the four GDS or Global Distribution Systems at different levels. This means that in one system an airline may offer real time, last seat availability and yet in another system they offer limited availability or they may opt not to participate at all. What happens when an airline opts for a low level of participation in one or more systems is that the information displayed to the travel agent may not be current and until the agent actually tries to book the fare, the agent doesn’t know that it is going to be valid.
The first problem is one of the online booking companies own making as they didn’t want to deal with the technological challenges of having their displays deal in real time availability. It would be incredibly expensive to do so.
The second one isn’t one that the travel agent has created, it is one that the airlines have created. Most travel agents that I have dealt with are fairly good at informing their customers that a given fare may or may not be available and they won’t know until they try to purchase it.
Sometimes, the airlines will pull or change a fare without warning. No one has any control over this other than the airlines.
Bait and switch generally enriches the vendor, not the travel agent as most agencies make their money from the fee that they charge given that most of their vendors don’t pay them any commission any more.
I am not so sure it is a legitimate bait and switch. Fares are there one minute and not the next all the time. Any product has price fluctuations…the travel industry just has more of them in a shorter time period.
While I have never seen airline fares drop to the point where the new cost will cover the change fee, I do see price reductions in cruise prices and packaged vacations all the time.
The only firm rule, and one that is explained by almost every agent I know, is that the price of an airline ticket is NEVER guaranteed until it is ticketed.
Like John F, I don’t think this is a bait and switch. The pricing for domestic ticketing is going the way of international pricing. A fare ISN’T the cost of the ticket. Is is the base and then there are the taxes, fees and surcharges to be added. An example I can give is for travel from SFO to HNL. I priced an itineary that had a fare of approx $289, but with all the taxes, fees and surcharges, the ticket cost was actually over $560.
As to Christine’s experience of having a price change during the booking process, it happens daily. The airlines change their fares 3-4 times a day. I have been in the process of booking a reservation to have the fare go up or go down before the ticket gets issued.
Chris, you really need to have someone in the industry proof read your work before submitting it. If you are going to write about travel, you need to have your facts correct.
You left out the term “capacity controlled” – probably the most important one in terms of air fares. I won’t go into a long disucssion of that – I’ll leave that to you, Chris.
The other issue – here is how I handle this with my clients: “Right now I see a fare of $XXX, but I must tell you that air fares are never guaranteed until actually purchased. In the meantime, let’s make a reservation for this one and see if we can get this fare to stick.” The Travel Agent in your column made a fatal error – s/he did not grab the fare when she had it, s/he obviously let some time pass between the client’s initial call and actually holding those seats.
I have had the same bait and switch with Expedia, too. I found a low fare from Buffalo to Maui. I booked 3 seats, filled out everyone’s information including seat selection (3 legs x 3 pax x r/t = 18 seat selections) when I hit “pay” I was told the price was no longer available it was $150 more. I called Expedia and was told the airlines are always changing prices. I opened another window went through the same process and got the same “price is not longer available”. How long does it take the airline to remove the ficticious price from the list of Expedia offerings?
All of the issues in this article would be moot if the airlines simply priced their tickets BASED ON HOW MUCH IT COSTS TO FLY. Sort of what Southwest does. Just think – all of the mathemeticians and banks of computers could be eliminated. Customers would have a good idea of how much it costs to fly from Point A to Point B without doing the “booking” game. Unfortunately, the majors love to play yield management, and it may work, but the last time I checked SW was the only carrier making any money. This whole article reminds me of the story “If airlines sold paint”. Do I hear the word “regulation”?
I recently purchased a ticket for a friend to fly from Austin to Indianapolis. His wife was in ICU. I first looked on NWA and found the rate. Far from cheap for next day booking. I was in a hurry to help out so I called the airline directly to book. Same rate plus $20 transaction fee, no problem…
I gave them all info and had a confirmation # for his flight.
He arrived at the airport expecting to get on the flight when they told him the transaction was not approved. He called me about the situation so I immediately called NWA. They said my transaction was not approved. So I called Mastercard and they told me they approved the charge. Now I am really pissed… So I call NWA and ask for a supervisor…they stated it wasn’t approved.
Why would an airlines refuse my charge? No wonder Delta had to take them over. I of course told them that. Not only were they rude but stupid. I have never been on Nwa nor will I. Why did they go through the motions of booking a ticket and receiving confirmation only to deny the purchase? Needless to say my friend paid for the ticket with his card. They knew this was a third party charge from the moment I said “hello”.
There is an acid test -
Do price switches ever work in the passenger’s favor?
IE will a $900 fare ever suddenly become a $400 fare after booking?
Travel agents (online or off) are tied into the airline reservation system so when an airline makes a fare change it is immediate across all platforms.
There is also speculation that the online sites are using cookies to influence pricing as well. Say you go to Orbitz and price a SFO-HNL ticket and Orbitz leaves a cookie. Then you go to Expedia and look for the same thing. Well now Expedia knows you were not happy with the Orbitz price (or are shopping) so they can tweak the pricing. Not saying it happens, and I have no idea if it is but I have heard the speculation.
“On November 17th, 2008 at 10:11 pm axle said There is an acid test -
Do price switches ever work in the passenger’s favor?
IE will a $900 fare ever suddenly become a $400 fare after booking?”
Yes Axle – that does happen. A good Travel Agent can amost always get the airline to reduce that for you although you will still pay the airline’s change fee. So while the new fare is $500 less, you will only yield $500 minus the fee which is usually $100.