Are Customized Prices Next for the Travel Industry
Here's a story that might have a familiar ring:
Clark, who works for a telecommunications company in
She logged on to her husband's computer, found the cheaper rate again and booked the trip. But Clark wonders why the Grand Floridian had switched prices. "I think the computer recognizes you and then changes rates," she says, using cookies, or snippets of information on your Web browser, to identify you from your last query.
Perhaps. "We don't target people with cookies," says
But the travel industry is warming to the idea of showing you a price based on who you are. Or who it thinks you are. Last spring, a
A few weeks ago, in little-noticed comments filed with the
The filing goes on to detail a program that assigns travelers a score based on their status, "determines what value it places on the traveler" and then returns a fare.
Was this a smoking gun?
"We do not score customers," says airline spokeswoman
"We are tailoring the product and service offerings shown to the customer based on our knowledge of that customer and his frequent flier status," Sanderson says.
In other words, technology is only used to offer passengers a more seamless experience on the AA.com site, and wouldn't be turned around to show the same Executive Platinum traveler a higher fare.
Another technology consultant with close ties to the airline industry,
"The more an airline knows about what its customers like and dislike, the better it can target offers to them, and avoid offers that are known dislikes," he said.
Regardless of how airlines intend to use this technology, it is interesting to know that booking systems can be this sophisticated. If airlines are able to display options based on your frequent flier status, they would have no difficulty offering passengers a fare quote that includes optional items such as a checked bag or an in-flight meal.
I asked the
"The law does not prevent carriers from offering special low fares to corporate clients, or free seat assignments or free checked baggage -- in effect, a discount -- to certain high-level frequent flier program members," says agency spokesman
But the technology is a slippery slope that could lead to higher airfares for everyone, cautions
Once airlines can tap into personal data such as your home address, the size of your family and your favorite destination, they'll leverage it to their advantage. "The carriers stand to make millions, if not billions, of dollars on customized pricing," he says.
That's hardly reassuring to customers like Clark, who has also experienced bait-and-switch fares when buying airline tickets, and many others whom I've profiled in this column. For now, the best solution is to always clear your cookies when you're price-shopping online, and only offer your frequent flier or frequent stayer number after you've made a purchase.
The travel industry admits that it has the capability to switch prices based on who you are. It's probably only a matter of time before it does so.
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