Only four months after approving the increase to 75% of the subsidy for travel from the Canary Islands, Balearic Islands, Ceuta and Melilla to the Peninsula have alarms jumped by the rise in prices of airline tickets. Current technology allows companies to obtain maximum profitability at all times. Even to intuit future behavior analyzing the movements in the network of potential customers. Hence, a click of more can make the purchase more expensive.
The "price engineering", as defined by the director of the Group Electronic Commerce departmentLopesan, Eduardo Gómez, has allowed companies to sell the right product to the right customer, at the right time, at the right price and in the right channel. It is what is known asrevenue management,Widely used also in the accommodation sector.
Offer and demand
The subsidy of 75% advanced an increase in demand. If flying is cheaper for the buyer – Canarian, Balearic, Ceuta or Melilla – there will be a greater number of citizens willing to move. The market dictates that greater buying pressure leads to an increase in prices.
The Business Association of Travel Agencies of the Balearic Islands (Aviba) said last week that the increase since July already reaches 28% in the routes between the Mediterranean archipelago and the Peninsula. A few days later, the vice president and counselor of Public Works and Transportation of theCanary Government, Pablo Rodríguez, promoted an alliance between all the extra-peninsular territories to monitor the behavior of the prices fixed by the airlines and to banish the possibility that they could take place outside the laws of the market.
From the moment we look for a ticket for a certain day and at a specific time, we are influencing its price. The potential demand is enough for the system to adjust the price upwards. If many people demand to travel on a date, the tickets become expensive. Logically, if all these searches do not take the form of real sales, the final cost will contract again.
Until then little can be reproached about the behavior of companies. There is also no need to protest the use of historical data to conform demand profiles adjusted at every moment. For example, during the Christmas dates or in the fortnight changes of the summer season there is an increase in travel. Even airlines reinforce their services with the assurance that they will be able to fill a greater number of seats.
The complaints of the users focus on the use of the information trail. This is, thecookiesor the IP address of the computer from which the search is made may determine an immediate price increase. If someone searches for a ticket but does not buy it, they may find that when it is finally decided, even if minutes have passed, it is more expensive. In contrast, from another device returns to find the initial cost. Hence, a click of more can be translated into greater outlay.
The happy algorithm
The algorithm decides everything. In itself contains all the ability to analyze the information necessary for that sale occurs. "A price for each person and in each moment", emphasizes Eduardo Gómez. It is able to detect how many customers are interested in a specific ticket and, based on that, set a certain amount. In the same way, it also analyzes the absence of demand for a product, which, logically, leads to a reduction in the final price. The occupation rate determines the profitability of an air route. In the same way that a search for the same ticket translates into an increase in the price, if the time of departure approaches and seats remain to be filled, the prices will go down paying attention to the maxim that an empty seat represents the greatest possible loss .
The technological advance allows artificial intelligence to be implemented in the current systems, which provides the necessary analysis capacity to fine-tune the result in detail. In the same way, there are machines capable of trackingcookiesstored navigation and history. In this case, the price for the traveler will be adjusted according to the degree of need to travel that he has in each moment.
The director of the Electronic Commerce department of Grupo Lopesan is adamant about the use that in the immediate future will be given to therevenue management:"It does not make sense that the entrance to a movie theater or to see the UD Las Palma cost the same if it is empty that if you only remain to sell two seats," he explains.
In the United States, that concept is being used. "Here is a discipline to land, but of course to a young person who is being trained right now, I would tell him to specialize inrevenue management ",points out Gómez, who for the third year has taught a course on this subject organized by the Economic Promotion Society of Gran Canaria.
The change of paradigm also forces consumer associations to catch up to keep the interests of citizens safe.