IP_Prices

Do Airlines and Travel Websites Really Raise Their Ticket Prices Every Time I Log Back On?

Officially: No, of course not! Unofficially: Ehhh… let’s just say it’s not unthinkable

We’re all being tracked all over the internet, all the time. Our digital overlords are creating our realities and socially engineering us all… or something? Because if they have all this data, why wouldn’t they use it against us? 

Take airfare, for example. It’s long been rumored that there’s a relationship between one’s IP address and the fare you end up paying. You’ve no doubt experienced this phenomenon: You’re browsing ticket prices, you find one that looks reasonable and tell yourself you’ll come back later to buy it, only to find it’s gone up by a couple hundred bucks. Confused, you log off, come back the next day to see if it’s gone back down again, only to discover the flight now costs far, far more than it did originally. 

So are airlines really tracking your online movements and pushing up prices for flights you’ve shown an interest in? It certainly doesn’t sound out of character. But maybe it’s just tech making us all cynical and paranoid? Or a bit of both? Let’s see what we can find out. 

So, is this really a thing?

The truth is murky, but talk to most anyone in the travel industry and they seem to be aware of the idea of it. One travel agent told me she advises all her clients to clear their browser cookies before shopping for flights for this very reason. Additionally, there are Incognito Mode truthers out there, offering bounties on Reddit for hard proof that you get lower prices when browsing privately (the bounties remain unpaid).

Technically speaking, is there anything to stop airlines from doing this?

Great question, and if you’ve spent more than 30 seconds alive in the plutocratic hellscape in which we currently find ourselves, you will not be shocked to discover that the answer is: Probably not. Airfares were deregulated by Congress in 1978, and as a Department of Transportation press officer explained to me, their agency “has some customer-service-related rules, but they have no say over pricing.” 

Lovely. What do the airlines or travel sites themselves have to say about it?

Very little! I reached out to Kayak and Expedia multiple times and received no response. A Southwest Airlines spokesperson responded thusly: “As you might know, pricing is a regulated topic and that restricts our ability to offer commentary on the topic.” A non-answer if there ever was one, and also one detached from the actual reality of the situation (since, as we just mentioned, airline pricing has been deregulated for 40 years now). Southwest didn’t respond to a follow-up request for clarification.

Soooo… they’re probably doing this, then.

I’ll say this much: Most of the experts I talked to don’t believe (or don’t want to believe) that it goes on. Charles Leocha, president and co-founder of consumer advocacy group Travelers United, who also sits on the Department of Transportation’s advisory committee for aviation consumer protections, tells me that if the DOT got wind of this, “they would come down hard.” He continues that, “It would fall under unfair and deceptive practices should the airlines stoop to any such actions.”

So if this isn’t shady airline bullshit, it doesn’t change the fact that the price still mysteriously goes up when I check back on prices. What else could be behind it?

According to Scott Keyes, founder and CEO of Scott’s Cheap Flights, there’s a lot that goes into airline pricing, and a lot of it is counterintuitive. “Most airfare is controlled by algorithms these days,” he says. “Yes, there are revenue managers and airfare pricing managers who are setting overall parameters and putting their thumb on the scale in different places, but for the most part, on a day-to-day, hour-to-hour basis, the airfare is constantly jumping around because of those algorithmic differences.”

Here’s an obvious example Keyes shares: When a flight sells out of one fare class (say, basic economy), the price will jump to the next fare class. Say someone was checking airfares at 7 p.m., when there was one ticket left in the cheaper fare class. If they hold off, then refresh the page at 7:15 after the last ticket in the fare class sold out, the price will have increased. The customer has no idea that the original fare sold out, so it’s entirely understandable that they’d conclude that the price jumped because the airline knows they’re interested in the flight, and manipulated the price accordingly.

If it’s the same seat in economy that’s jumped up in price, Keyes says airlines are adjusting their prices constantly for myriad other reasons — perhaps the seat went up because a rival airline just raised its price for the same destination, and the airline you’re using to search for a ticket for is happy to pocket the extra price increase as well. 

What else might cause it?

Keyes says that, much like flash crashes on the stock market, where there are triggers that mutual funds use to either buy or sell a stock based on, well, something or other, airfare algorithms work the same way — they look at other airlines’ sales and fares, and many other things.

Overall, Keyes says, airfares are incredibly complex. Think of a trip from Kansas City to Barcelona: Typically you’d have to go through, say, Chicago, but unlike the old days, the price of that trip isn’t simply the cost of the flight to Chicago plus the cost of the flight to Barcelona. It’s a whole separate fare, based on their other flights — like, maybe folks flying from Minneapolis who are also going to Barcelona and connecting via Chicago. Maybe the demand for any of those flights changes; maybe the airline opens up a new route, or more flights per week, or switches to a slightly larger (or smaller) plane. So many variables! 

How often does the price change?

“Fifteen or 20 years ago, airfare was a lot more static than it is now,” Keyes says. “It would change every day, but not much more frequently than that. Nowadays it changes every hour, every minute. It’s constantly fluctuating and I don’t think people’s mental models have caught up.”

The problem for most consumers is that it’s very different to the kinds of things we more commonly pay for. The price of your favorite beer may go up over time, but it’s not changing every day (or more) and you generally know what to expect when you check the price. But with airlines, not only is it unpredictable, it’s constantly changing and doesn’t make a lot of intuitive sense. Essentially, buying a plane ticket is less like buying something from the store than it is trying to invest your money smartly on the stock exchange. 

“An example we use is that it’s cheaper to fly to China than it is to fly to Jamaica from the U.S.,” Keyes says. “That doesn’t fit with most people’s mental model of airline pricing, and yet it’s definitely the case.”

It still seems all too easy to believe that airlines are just deliberately screwing us.

It does, and Keyes suspects that customers’ preexisting negative perception of airlines plays a big factor in thinking that this goes on. But one thing Keyes points out is that if airlines really were doing this, his own business, Scott’s Cheap Flights, would probably reveal it. “We send out a widespread deal, say it’s a really good sale to Europe, that’ll go out to a million people. So tens or hundreds of thousands of people are probably looking at it, and tons of people end up booking the deal that we send out,” Keyes says. “If it were the case that airlines were monitoring how many people were looking at a particular fare and raising the price as a result, we wouldn’t be able to operate. Every time we’d send out the big email, it’d cause the price to go up, and that’s just not what happens.”

Still, if you’re convinced the airlines are out to get you, take precautions and browse in Incognito Mode or clear your cookies. And most importantly, if you find definitive proof that it’s happening, drop us an email! Because that’s a story worth paying a high price for.