If you are a frequent traveler, then you may have heard this rumor. People often warned me not to search for flights too often online. I was told that the more you search, the higher the prices go up. It was always something about airlines tracking your searches and once they learned you really wanted to go somewhere, they would jack up the prices. I always believed it becasue the prices did seem to constantly increase. However, travel experts are now revealing the real reason why flight prices fluctuate so much.
Why Do Flight Prices Fluctuate So Much?
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The NY Post shared data obtained from experts at Dollar Flight Club. While it turns out that airlines are not monitoring your every move online, they are using the algorithm in their favor. The NY Post shares that "the real reason flight prices are always switching up is because of dynamic pricing algorithms, fluctations in demand, market factors, and competition."
Let's dive into each of those. Starting with the algorithm, the outlet shared that "airlines use advanced revenue management systems to adjust prices in real time." Prices are affected by "demand, seat availability, and competition." All makes sense, right? If there is a high demand and a limited supply, you can raise the price.
However, most airlines try to separate their seats into different "fare buckets." Once all of the cheaper seat options have been sold, all that is left are those that are more pricey.
More Reasons Why Flight Prices Fluctuate
Another area that is dependent on the algorithm is booking patterns. Airlines will take note of "how quickly seats are being sold compared to historical patterns." When flights are selling out fast, you can expect the prices to rise accordingly. That covers most of the algorithm factors.
Another area that often increases the price of flights is demand. It is common knowledge that flights are more expensive during holidays and weekends. That is because more people have the need or desire to travel during those times. With higher demand comes higher costs. Furthermore, competitors play a role. Airlines often look to one another to see what they are charging and follow suit.
Then you have market factors such as labor shortages that easily make flight prices fluctuate as well. So while you can breathe easy knowing that airlines are not stalking your data, there are still many factors that could impact the price of your next plane ticket.
