Study on OTA Pricing Tactics Advantageous for Agents

What:
A new study from Northeastern University revealed the pricing practices of some OTAs, and the results may dissuade some consumers from shopping online for travel deals.

Why It Matters:
Price discrimination was more prevalent on travel websites than on other e-commerce sites, according to the study, and while that’s bad news for buyers, it’s good news for agents. Because several major online travel sellers — including Expedia, Hotels.com, Orbitz, Travelocity and Priceline — use customer data and web analytics to configure costs, some consumers are quoted higher prices than others for the same product. While the study has its critics, it highlights an important takeaway for agents: Get to know your clients well. In addition to price, consumers value personalized services and recommendations, and strong agents can trump algorithms.

Fast Facts:
- Researchers conducted searches on 16 e-commerce sites — including travel sellers Cheaptickets, Expedia, Hotels.com, Orbitz, Priceline and Travelocity — as well as non-travel sites such as Home Depot and Macy’s.

- Travel searches focused only on hotels and car rentals.

- The study shows that travel sites are more likely to engage in “price steering,” in which search results are tailored so that some customers will see more expensive options first.

- It isn’t illegal or criminal for online sellers to factor in individuals’ browsing and purchasing history and the type of device they’re using to determine pricing and to tailor search results.

What They Are Saying:
“Where travel agents have had an advantage is that personalized service they give to their customers,” says Rick Garlick, global travel and hospitality practice lead for market research firm J.D. Power. “You and your spouse come in and talk about the kind of vacation you want to take, and they come up with informed recommendations … It really does behoove you to spend as much time getting to know your customer as possible.”

The Details