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The Secret Workings of the Travel Industry

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					The Secret Workings of the Travel Industry and How you can find Cheap Tickets
These days everyone is an expert on finding cheap trip tickets (airfare, hotels, car rental) online. It seems as if you poll most people on their last travel purchases, they will tell you of their secret sauce they used to find said tickets in a manner that would surely make you think they have found the answer to life itself. Of course this would be great if it were the truth, but the reality is most travelers think that by checking three different websites and choosing the cheapest one, they have found the lowest and best deal on the Internet and are now truly travel industry masters. Unfortunately the hard actuality is the internet travel industry is a hugely complicated beast that few consumers really have a handle on. And to truly get the secret sauce of those bare bones cheapest possible travel deals, you do have to understand a bit of how this whole game works. So step aboard and find the interworkings of the online travel industry, and what it all means batman. Well in trying to decipher out how online travel companies price their fairs one must first divide these companies into three buckets: This 1st bucket is direct sale travel sites. These are sites like American Airlines (aa.com), Jetblue Airways (jetblue.com), United Airlines (united.com), Hilton Hotels (hilton.com), Southwest (southwest.com), Avis Car Rentals (avis.com), etc. They are directly selling tickets for their own flights, hotels, and care rentals. Outside of travel, this is sort of analogous to the Levis Jeans Company selling their own jeans at their own outlet stores in various malls. The 2nd bucket is what are generally considered online travel agents (OTAs) such as Orbitz, Expedia, Travelocity, CheapTickets, etc. They essentially sell their own inventory of tickets that they purchase from the 1st category. So following the previous analogy, online travel agents are sort of like a Macy's Store selling Levis Jeans (as well as other brands of jeans). What's important to realize is that it's their inventory, so when you see the words "searching" on a site like Expedia, it means they are searching their own Expedia inventory for airfare matching your flight search. So what’s so great about OTAs? Well they are kind of like department stores in that you can get all kinds of different jeans, though some times at a marked up price. What you gain in convenience you lose a bit in price. Of course, just like sometimes a department store may have clearance jeans cheaper then the direct outlet store, so too can an OTA be cheaper then a direct airline. But most of the times an outlet is cheaper because its direct, and similarly many of the times buying directly from an airline/hotel/car supplier site avoids the marked up ticketing fees (processing fee, convenience fee, or whatever else they decide to call it) so it would be cheaper too. Now the real question then is how can you have the convenience of checking all of the direct sites, and also knowing how that stacks up against and OTAs fares? Well that takes us to the relatively new concept of our 3rd bucket fare aggregators or meta-search engines. You may have heard of them and not known they were different from OTAs, but sites like Kayak, Mobissimo, and Travature all fit in to this new bucket. What they do is search the websites of category 1 and 2 to present where the cheapest ticket can be found. The important differences are that they searching hundreds of websites, not just a

local inventory and they don't do the booking, they just give links like Google, so you buy the ticket through whoever is cheapest. Of course this is important because Category 1 and 2 are just trying to make a sale, whereas the third category is just trying to help you find the best deal. I suppose if we were to continue the jeans analogy it would sort of be like someone going around the mall for you and comparing prices for a set of jeans at Macys, Levis Outlets, Express, Sears, JC Penny's, Nordstrom's, etc and just telling you which place has them cheapest at. Now it should be obvious that your best bet is to look at a meta-search engine so you can find where the cheapest place to get your ticket is, right? Well not exactly, this is only true maybe 90% of the time. You see it turns out that although sites like Travature and Kayak, would love to search EVERY website on the Internet, so they can present people a 100% accurate answer on where to find the cheapest fare at any given time, the business world is not that simple (or friendly). You see, some companies in category 1 and 2 DON'T WANT their airfare being compared next to others. So they send threatening legal letters, to prevent meta-search companies from searching their site. So unfortunately they actually have to remove valid airfares from their listings. Southwest.com is a good example of this, and sadly there are a few others. So after all this what should you, the consumer, do? Well, the best solution is to check meta-search engines like Travature or Kayak first, that way you can at least check hundreds of sites in one single step. Then, if you want, spot check those results with a few others, so you are sure that you have found the absolute best fare you possibly can. Is it perfect? No, but its better then the secret sauce your grandma cooked up.


				
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posted:7/17/2008
language:English
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Jeremy Almond Jeremy Almond
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