Thanks to our social media feeds, Netflix queues, Amazon accounts and Google search results, we've come to expect our online search results to cater specifically to our interests and needs — including when it comes to travel.
Whenever we enter an online travel search, it's our assumption that these deals are made just for us and that they're the best available, but that may not always be the case. According to "Measuring Price Discrimination and Steering on E-commerce Web Sites," a study published by Northeastern University in November 2014, numerous travel booking search engines are guilty of price discrimination or price steering. The study looks at hotel and rental car searches across six popular travel booking sites (CheapTickets, Orbitz, Expedia, Hotels.com, Priceline and Travelocity), and is the first of its kind to compare results between real user accounts and synthetically generated ones.
Price discrimination (as defined by the study) is an industry term that means prices vary user to user, while price steering refers to the order in which search results appear. These factors can sometimes work to your advantage, depending on how they're implemented. It's great if you're driven toward the best deal, but it's not so beneficial if you're unknowingly pushed toward higher prices. Even though some of these practices may seem shifty, they aren't illegal in the United States.
"Most of the time people love this stuff. We love to bargain hunt, we love coupons," said Christo Wilson, one of the study's authors. "The difference between the real world and online is the transparency issue. People feel cheated if they don't know that they're seeing altered results."
Here are a few takeaways from the study that can help you secure a deal without wondering if there's a better bargain out there.
The authors behind the study noted that price discrimination and price steering aren't necessarily bad things, what matters is whether sites are transparent about what users are getting, which can be difficult to detect on e-commerce sites.
For example, the study found that CheapTickets and Orbitz presented reduced prices on hotels to "members" who are logged into their respective accounts at the time of their search, thereby using price discrimination. Orbitz Worldwide, which owns and operates the two sites, said it marks members-only prices and acknowledged that they offer lower prices to those who have accounts on their websites. So, it pays to sign up for an account with these websites and to sign in to your account when searching for deals.
The study also found that Travelocity (and the retailer Home Depot) personalizes results for mobile users, specifically those using iOS devices. Users who search with Safari on their iPhones received different hotels in a slightly different order than consumers using Chrome for Android and other desktop browsers.
Overall, hotel prices were listed at about $15 (or 5 percent) lower on iOS devices than other mobile operating systems and desktop browsers, providing proof of price discrimination, where a certain group receives lower prices.
"Online travel retailers have publicly stated that mobile users are a high-growth customer segment, which may explain why Travelocity offers price incentives to iOS devices," the study states.
While the study doesn't call out Priceline for price steering or discriminating, the study's findings show that the discount booking site personalizes search results based on the account history of users.
The study states: "Users who clicked on or reserved low-price hotel rooms receive slightly different results in a much different order, compared to users who click on nothing, or click/reserve expensive hotel rooms."
Since users are tied to their IP address and booking history on individual sites, travel search engines like Priceline can customize results to show the properties that an individual is more likely to look for, and subsequently book.
Overall, the authors of the study concede that there's no foolproof method to ensuring you get the best price. "The companies know a lot about you and we know very little about the companies. If you're an ordinary person on the website, you have no idea why you're seeing certain prices," said Wilson. "Depending on algorithms, it's very hard to get out of them."
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