What is price discrimination?
Being a keen traveler you have probably noticed that prices for one and the same service or product vary in different countries. The phenomenon is called price discrimination and includes several aspects. If reaching out to any qualitative economics help, you will see that price discrimination affects charging different prices for one and the same product.
The charge depends on the following characteristics:
Time of use
When unit is bought
All these reasons mean that the price is lower when buying larger quantity, not at peak times but in advance, you are an OAP. In all other cases or cases contrary to these, you will have to pay extra money for one and the same unit or service. In such a way any company offering some goods or services tries to make higher profit with the help of an inelastic demand. Providing a customer has a very inelastic demand, he/she is willing to pay extra money for the same output. If a firm can set higher prices for its goods or services, why won’t it make so? In such a way any firm or a company can increase its revenue or profits. For receiving revenue from elastic customers too (whose number is much higher if compare it with the inelastic ones) companies launch special offers and prices.
Airline practice of price discrimination
Let’s consider the system’s work through the example of Airline practice of price discrimination. Here are some of the commonest factors:
- It’s not a secret to anyone that if buying a ticket some months in advance, it will be cheaper.
- The higher the demand for a particular flight is, the higher prices are.
- The lower the demand for a particular flight is, the lower prices are.
- The price for an airline ticket changes from hour to hour.
- Some flight times of a particular route are less popular, therefore such flights tend to be cheaper.
- Whereas traveling at peak times is much more expensive. In this case traveling during a working week will be more expensive, as soon as this time is primarily oriented towards businessmen whose expenses are covered by their companies. In contrast to this traveling during the weekend is targeted at mere elastic customers and costs cheaper.
- The same happens with different days of the week. If compare a ticket cost from London to New York on Sunday morning and evening the difference makes practically $500.
- Prices also differ from country to country, which occurs due to the variation in economic advancement. Therefore, people living in Canada and traveling to Latin America can buy cheaper tickets in comparison with the US citizens.
Use a VPN for changing your geo-location
In such a way most airlines have invested in very expensive ticketing systems in order to make sure they gain as much money as possible from the customers. In this regard some advanced users have got a shot at using a VPN for changing their IP addresses. There are even some examples how it works: when renting a car or flights from Russia or Argentina you save a lot of money; when buying tickets from Europe or Latin America instead of the US, you also save up to $150; when booking a hotel in France, Italy, Germany or any other country from the Philippines or Latin America the price will be $20 less for a night than from the US. The same happens with tickets from Canada, when buying a flight from Canada instead of the US you have a chance to save up to $1000.
How does a VPN work?
As you see, a good VPN can make your expenses for airline tickets much smaller. All you need is to find a high-quality service and subscribe for it. If you are far from up-to-date technologies you need some competent assistance in the issue. So, a VPN service is a virtual private network, which has been designed and is still being developed for sensitive data protection online. Any VPN has some automatically installed functions that make it possible to provide a high level of protection for your network and all the confidential data you transfer. So, a highly professional VPN company offers numerous servers located worldwide. Having connected to one of the listed servers, your true address is automatically changed for a server’s one. In such a way, you are able to shift your true geo-location, as well as to make your authentic address invisible. Besides, a good VPN service runs a set of well-designed protocols used for encrypting your incoming and outgoing traffic. As soon as you send something through a connected VPN server all your data is routed through a secure tunneling passing through which all the data becomes inaccessible for any adversaries. Moreover, a good VPN service provides a highly anonymous connection through keeping no logging data and making all your data ciphered. In such a way having changed your true IP address and shifted your geo-location, you are able to buy cheaper tickets, as if you are physically placed in another country.
As soon as the phenomenon of price discrimination depends on point-of-sale factor, many customers find it dishonest to buy tickets paying twice more than making the same manipulations from their native country. In such a way one and the same flight can cost $300 in the US and only $30 in Bangkok. So, if you’re looking for saving money on tickets ordering without traveling somewhere physically, you need to subscribe for a good VPN service to shift your virtual location and ‘fake’ the point-of-sale’ system applied by many airline companies. Before revisiting an airline website through a VPN for buying some tickets at a lower price, you need to clear your current cookies for not to be detected. It will be also helpful to run an Incognito mode of your browser to set even more intense defense. So, this is you who holds the keys to the kingdom, therefore open the ‘doors’ and spend your money on something more useful than just an upcharge.