Off on holiday? Here's the best time to book flights and hotels
Giampaolo Viglia, University of Portsmouth If you’ve ever tried to get the best deal on a holiday, you will have noticed that airlines and hotels continually change their prices. What might cost a certain amount now, could be cheaper or more expensive tomorrow due to this “dynamic pricing” – used as a method to manage revenue. We have studied these pricing techniques in sectors including airlines and hotels to further understand and identify when it is best to book and get the best price. These dynamic pricing techniques are used when demand for a product is uncertain and capacity is fixed. There is an incentive to sell most of the available seats or rooms by a certain deadline as these assets are “perishable” – if the company doesn’t sell the product in time, the opportunity and money is lost forever. Travel companies also use dynamic pricing to increase their revenue per room or seat, and so customers can often pay wildly different prices for the exact same t...