There is a not-so-complicated science to getting the best deal on your holiday. Most of us know that the best prices are available to early birds and in last minute holidays. Booking in any “reasonable” timeframe generally means the highest prices. Until recently, that was the tried and tested formula; the internet has changed that. Now, prices can fluctuate through the week as well as through the year. Here is how you get the best deal on your holiday.
Think Prices Changes are Erratic? Think Again
We’ve all done it – booked a holiday at what we think is the optimum time convinced it won’t drop any lower than that. The only way it will get cheaper is if we leave it until the week before we want to fly. That means no guarantee of getting the holiday we want – fine for single people who just want to get away, but not for those who need to book time off work and make plans. The day after booking your holiday, you go online and see that it’s already cheaper.
Similarly, that bargain holiday we bookmarked yesterday in order to discuss with our partner is now £50 more expensive than it was the time you earmarked it. Disgruntled, you end up paying the higher price assuming that it won’t drop again. It might, but you have no way of knowing that. In fact, the chances are it will be a different price tomorrow and another price again in 4-5 days. Why do holiday companies do this?
Dynamic Pricing: The Pattern of Price Changes
These seemingly erratic price fluctuations is actually a carefully constructed tool profit selling technique called “dynamic pricing”. Package holiday bookings are not the only area where this costing tool is applied:
- Airlines have used it for years – as places become scarce (a flight fills up) the price increases until the last few places are available. If they struggle to sell the last few seats, they will go for much cheaper prices
- Needing to strike a balance between room occupancy and revenue management, large hotels will fluctuate prices but in a way that is arguably more carefully managed. Prices are higher during the week and cheaper at the weekend. The cheapest prices will always be available way in advance
A study at Keele University revealed that price varies as wildly as 60% for the same hotel/flight/holiday for the same destination, dates and accommodation even when booked in the same week. It’s all thanks to demand, sales trends and that all-important dynamic pricing.
When is Best to Book?
The most important issue for you as a consumer is how you go about getting the best deal. According to extensive study and multiple reports, the best day to book a holiday is Sunday with Tuesday coming in a close second place. Sunday is a natural day for cheaper prices as that’s when the majority of holiday shoppers make a purchase. It’s not clear why Sunday is better than Saturday, but it could be that the extra demand on a Saturday from consumers bumps the price up. After the rush (Sunday) the prices drop again. A weekday is potentially the worst time to book a hotel or flight. This is when business users make travel plans. Holiday packages are less volatile though.
The reason that Tuesday evening is the best time for prices is also unclear. It could be the psychology of getting over the Monday blues. After a bad day at work on the first day of the working week could be inspiring holiday shoppers to book on a Monday for something to look forward to. Tuesdays may have lower sales figures for this reason alone.