First, most people spend significantly more than usual during this time of the year (think gifts, vacations, and travel expenses). Second, some businesses — especially retail, travel, and entertainment — earn significantly more during this period. And third, there is no better time than the peak gift-giving and holiday season to learn the principles of smart online shopping.
Tricks companies use to make us pay more for hotels and flights
The internet made it significantly easier for companies to use their marketing tricks against us. Things like cookies, browsing history, and our social media profiles tell them everything they need to dupe us into buying what they sell. The worst part is that companies also know everything they need to compel us to dish out ever more dollars from our pockets.
It all comes down to consumer psychology and today's opportunities for online tracking. Knowing some basic information about how the human brain works and having access to internet browsing data helps companies push us to buy more and pay more than we should.
By tracking our location, knowing what device we're browsing from, and having access to our online search history, companies have the information they need to force us to make a buying decision right away (and pay more for it).
Booking flights or hotel rooms may serve as a perfect example of how this can happen.
1. When they realize you're really interested, they raise prices
Have you ever noticed airplane ticket prices escalating each time you circle back to checking the same itinerary? Airlines call it “dynamic pricing” and explain that prices might go up and down depending on how many seats are left, how many people are looking at the same tickets at the same moment, or how many days before the flight are left.
While these all sound reasonable, there is one more thing airline companies should be telling you: "we show you a higher price when you check the same tickets for the second or the third time."
Why is it so? Companies understand that your intention to buy those tickets is serious and increasing the price does two things for them. First, it will trick you into buying faster to avoid a further increase in price. Second, they can easily increase their profit.
2. When they see you've got an expensive device, they increase prices
In 2012, a popular travel fare aggregator Orbitz confirmed that it shows higher prices for Apple users. When we read the official comments, we couldn’t believe what we were seeing. As it turns out, the folks at Orbitz had discovered that people using Apple devices are willing to pay up to 30% more on hotel stays, so they started to show them pricier deals.
Long story short, the mere fact that you are searching for flights or hotel rooms from an Apple device means you're not seeing the best deals. Orbitz was the first company to admit such a form of price manipulation, but it would be naive to believe that other companies don't do the same.
While customized marketing might be a good thing in some cases, such customized pricing looks more like discrimination by income and brand preferences.
3. When they know you're from a high-income country, they bump up prices.
The Golden Arches empire is not the only company putting different price tags on the same product depending on the country — there's almost a 300% difference in Big Mac prices in Switzerland compared to Russia despite purchasing power in Geneva only being about 100% that of Moscow. Chances are high that travel websites do exactly the same.
There are grounds to assume that companies show higher prices for those who search from developed countries and slightly better deals for those who search from developing ones. For instance, a ticket searched and booked from a Bosnian or Romanian IP address will likely cost you less than the same ticket booked from a Canadian, American, or German IP.
Although such formation of pricing does make some sense, it's also true that the same product or service should cost the same for everyone.
Of course, this all may sound like just another conspiracy theory and the evidence is hard to collect. However, both common sense and multiple "coincidences" show it all to be true.
Don’t get taken advantage of — learn smart online shopping!
Prevent travel and consumer corporations from cashing in on you by learning the best practices of online shopping.
How to save money on hotels and flights with VPN and anti-tracking
Basically, you should be hiding your IP and clearing recent search history regularly.
To prevent companies from showing you higher prices, you should hide your personal data from their eyes. You need to delete recent searches and cache to clear hotels/flight price history. There are a few things you can do to leave corporations without the priceless data they use for marketing purposes:
1. Clear browser history and cookies before searching for flights or hotel rooms. If you do this, websites will no longer know whether or not you've been searching same flights or hotel rooms before. Using an incognito window can help with this.
2. Use a VPN to disguise your search origin to look like it's from a lower-income country (or the home country of the airlines/hotel you're booking). This trick might only work for some websites, but it's still worth a try.
3. Use anti-tracking apps to prevent third parties from knowing the steps you take online. With anti-tracking software or a similar browser extension, you'll no longer need to clear manually the cookies and browser history each time you plan to search for tickets or hotel rooms.
The bottom line
As winter holidays roll around, you're likely thinking about visiting family in another city or booking a nice vacation with friends. Don't let corporations get more cash from you than is fair. Our simple tricks — deleting cookies, using anti-tracking apps, and hiding your location via a VPN — will help you win the pricing battle against corporations year ‘round!