Hotel booking sites overcharge Bay Area customers

That exists, it's called "Linkensphere" and more generally an antidetect browser. They even have a marketplace for browser fingerprint profiles which include language, timezone, user agent, etc. But they're often used to look like real Americans to avoid fraud detection systems.

Location based price discrimination has it's own affectionate nickname here, the 'Australia tax'.

When I travel it is often cheaper (hundreds of dollar cheaper, even after currency conversion) to book parts of a trip from a UK or US based device, than from an Australian one, directly through the airline or hotels website. Same for digital goods -even for services that do not have a business or support presence locally ie no local overheads, we still get charged a premium.

I understand this is only a nitpick, but I'd point out that if you've spent any time in "deep china" you'll realize that there isn't connection to much of anything beyond the firewall. Even if you're in a western hotel, you will be hard pressed to connect to anything other than your in-country company VPN. Having a foreign phone helps a bit too with mobile data. The great firewall treats cloudflare, GCP, AWS and many other ip ranges as damage to be "routed around". Azure is a bit better, presumably because many computers still have to do windows update regularly.

have been booking 3 weeks last fall for a road trip exclusively with "Booking". The more I booked, the higher the discounts became, going from 15% to a staggering 30% off. When sharing the location with my partner (via verbal communication and without us being on the same network) they got an even lower price for the same spot without her having gone through the same booking history (or barely any booking history).

I still wanted to see what the price was for each test. Maybe the author didn't want to say which hotels IRL, so call them Hotels A-E.

> if consumers are willing to pay 1.5x, you are leaving money on the table by charging x

That’s the same argument for charging thousands of dollars for insulin. It’s also the same argument landlords are using to charge more to victims of the LA fires.

I dont like the idea that person A and person B will be given 2 different prices for the same commodity. It is discrimination.

I'll disagree with your assessment about having zero dollars left over. Not everyone will want to spend everything they have But also a lot of people are willing to pay 1.5x for something until they find that others aren't. Yes there are somethings I don't mind paying now for, so someone else can pay less. But there are other things that I'll refuse to pay more for if someone is paying less.

> In fact in a fully optimized system, once consumers have all of their wants and needs met, they will have zero dollars left over.

What are your parameters for optimization here? If the point is to maximize extracted revenue then this is a reasonable outcome but we could optimize for any number of targets. We could optimize to make the best use of resources, we could optimize for best consumer reviews, we could optimize for the ideal buyer/seller price that makes both entities in the transaction walk away with the best deal for each of them.

But there's this persistent notion in the current business zeitgeist that the only metric worth optimizing is profit maximization and it's one that we should reject. Companies need to make a profit and workers need to take home a salary and that's fine, but we get to build the world that we live in. Living in a world where we care about quality of life and equity in transactions is much more interesting to me than living in one where all we care about is the velocity of extraction from anything that isn't nailed down.

I would guess that most dynamic pricing won't work in a competitive market. By "competitive" I mean that there are a large number of buyers and sellers and something close to perfect information (namely that buyers know the prices goods are being sold at).

Also, it needs to be framed properly. I propose to name it: value based pricing.

How much value does this room provide you? If you can pay 2x, then it implies value you get is also 2x.

Third degree price discrimination is not as catchy. https://www.investopedia.com/ask/answers/042415/what-are-dif...

>If consumers are willing to pay 1.5x, you are leaving money on the table by only charging x.

What about other businesses that are willing to charge x-1?

This is a rather capitalistic and self-centered way to think about pricing. Under our current paradigms, a "fully optimized system" would behave in the way you described, but I would argue that it is optimizing for the wrong things (same as the larger system). To me, a "fully optimized system" would be one that is capable of providing products & services at an equal price to all people. It wouldn't care about who can afford to pay more because it doesn't require the additional profit. Instead, it is efficient at a predictable and stable price point.

Those who politically advocate for "equality of opportunity" should favor a future where this is how things work, not one where everyone ends up with $0 spending money. In fact, the latter is exactly the opposite – equality of outcome.

I mostly agree with this, but with two exceptions. First, I've had surprisingly good experiences with booking.com (no affiliation, just a satisfied user). And second, if you're booking a cruise, it's actually better to book through an agent. The cruise lines all have deals with agencies that forbid the cruise lines from undercutting the agents. If you find the right agent, they will give you kickbacks on their commissions so you actually end up paying less than you would booking direct.

I agree with this for _purchasing_ things, but not aggregating. I use a lot of these services to aggregate results and then visit airlines/hotels independently to see if the price is reasonable.

Some large chains will only give you rewards points or honor your status if you book directly.

My wife and I just spent several days finding and booking hotels for a 2 week trip with several stops. We searched on aggregators (Booking’s “king size bed” filter was particularly useful) but always defaulted to booking directly with the hotel. Oddly enough, one hotel had no means of booking directly; they only supported booking through an aggregator. One other hotel was offering the same price via Chase Travel, so I took the extra bonus Chase points.

Same.

I feel so strongly that I built a site to help with finding those prices.

https://directbooker.com

Nah often third party hotel rooms are cheaper. I've literally been in a hotel lobby, asked about the rate, only to see that it's about 20% cheaper on Hotels.com, ask the front desk person why they can't match, only to then use the app to book right in front of the clerk and then get my room.

The backend system lots of hotels uses will sell rooms at what is essentially the market rate, based on occupancy, demand, etc..., whereas the posted room rate is more stable, for better or worse (better if the hotel is close to full, worse if it's empty).

Flights...agreed, but hotels sometimes have such shitty booking interfaces that I'd rather use the one from Booking which is solid and already has all my data.

I on other hand prefer the added security from Europe from getting both from same agency. As long as they are packaged.

I travel in Japan a lot and quite frankly Booking/Agoda have been comparable in most cases and extremely accessible for making reservations and even communicating with hotel staff.

I used to use sites like Expedia for flights but lately i just book those directly through the carriers and i think the experience on that end is better.

There were news about that really happening a decade or so ago.

Doesn’t sound crazy. Plug a vector that includes the user agent into a model used to determine price sensitivity and that’s what you’ll get.

> I had theory long time ago that booking hotel or airlines tickets from mac used to be more expensive than windows.

I currently work remotely for a company based in California and they issue MacBooks by default to employees. We can request Windows devices but our IT department prefers to have as many people on Macs as possible for admin efficiency reasons.

We hire remote workers from all around the world and so this Mac-first policy has raised quite a bit of discussion about what the majority of our workforce is accustomed to and has been trained on. It has come up time and time again that Macs are really popular in California but outside of that state Windows still dominates by a large margin.

Now, not all parts of California are affluent of course. And like every state the demographics are all over the place in terms of income. I bring this anecdote up because I wonder if both the Bay Area discrimination discussed in the article and your hypothesis about Macs stems from California stereotypes. Outside of the state, even though wildly inaccurate and unfair for a great many Californians, a lot of people tend to think of California as if everyone in the state is extremely privileged.

Trying to distinguish between what I consider good and bad discriminatory pricing, I think a useful litmus-test is whether it is being done secretly or has secret criteria.

Their(hotel) tech is 5 years behind.

It's still true. Recently looked at hotels and airline tickets on my droid while a friend checked the same with their iPhone and the prices they saw were 15-20% higher for the same rooms/seats/etc.

This was also true after we logged into loyalty accounts (the discounted loyalty price on iPhone was still higher than the general public price on Android).

In my experience it used to be direct booking was often more expensive. Often absurdly.

Now I find it is almost always the opposite. Outside some more super low budget hotel options. Booking direct on the direct site more often than not is cheaper than the travel / third party sites.

I like the new trend, the third party sites were too disconnected and wonky.

I recall working as contractor in 2000s to a company that had one arm trying to compete in a used car market niche and they had a laptops pretending to be consumers in the usual ways crammed in in shelves that were scanning craigslist and other websites to repackage and resell the info to used car dealers. IIRC craigslist blocked naive dedicated scraping at the scale they were doing it so I assume but don't know that they needed to mix up the IPs in way that required that volume of laptops to do it nation/world wide. This sort of thing probably has been going on as long as the web browser have been commonly available.

At that point why even bother making it legit? Just use dev tools to edit the price you want into the page and send a screenshot to the hotel…

“Oh, you don’t see that price too? Sorry Mr Manager, I guess it must be because you’re booking it from another location. Nevermind then, I’ll continue to book through this partner instead…”

Some places have worse service than booking.com - mostly cheaper and / or smaller places. Most real hotels indeed have quite good service on their own.

I have run into a hotel where the staff sent people to the third party booking site. They had decided to bite the bullet and cut the booking function from their in-house staff. Third party booking is expensive so they might as well drop their in-house staff and realize these savings.

Most hotel chains won't price match due to agreements with third party entities that account for a majority of their bookings.

One off hotels in popular supply constrained tourist destinations are the exception.

My roommate works front desk at a hotel, a common problem is that a third party site books things incorrectly or promises things that don't exist, then the customer is in the hotel lobby mad at the hotel over something they had nothing to do with

> Hotels generally dislike third-party booking sites, because they're just skimming off profits while offering a worse service

The problem is, the customers tend to want said third-party sites. Hotels have, at least for the masses, become a commodity - 99% of people just need a place to crash because they're out all day - and so customers expect to be able to shop around purely based on price and a bit on the location.

> designed to offer discounts, not charge higher prices.

And some of this has always existed. Think of stores which always offer a coupon. Customers only pay full price if they are in a desperate rush or if they don't know. But the fact that it has always existed doesn't make it any nicer.

I don't think it is actually in business' interests to stop VPNs here.

Using a VPN, with the associated hassle, likely indicates the person is stingy and very price sensitive, so you want to keep giving them the cheaper prices relative to others.

> ways to neutralize the use of VPNs

Probably - unfortunately - and so we can expect buying online to become ever more cumbersome. Great /s. Although diminishing returns might save us: the platforms will focus on "most buyers" and hopefully leave techies alone. But we can see in the youtube story that in some cases there is sooooo much money that even the techies will be beat back through pharaonic efforts.

I will have to have my mother in law in Kansas book our hotels.

Another thought on that, if you use tmobile LTE data and tethering (or just book directly using LTE data on your phone, using firefox as a browser on android, with the user agent switcher extension installed to perfectly mimic a desktop useragent), it's near impossible for random websites to determine where you are at geographically. The CGNAT exit point for my tmobile service when roaming in Canada bounces around between IP space that geolocates to either chicago, texas or los angeles.

Whereas if you use a residential cablemodem or DSL or FTTH connection in some specific city, where you're likely not behind cgnat and the ivp4 /22 or larger sized IP block you are "coming from" remains consistent on a multi year basis, 3rd party geolocation providers are much more likely to say "yep that person is in the SF bay area"

> 80% of product diversity is really just pricing discrimination in disguise

Very good and yes: Think of it from the manufacturer / seller perspective. Why shouldn't it be? If the goal it to optimize profit or return (and it is), then anything less would be a waste of opportunity. Even kickstarters go to great effort to think up ways to "justify" "bonus offers".

This is often one of the great failures of new ventures not to try and offer versions or features that SOME customers would love to pay for.

Except not pricing discimination in that these prices apply to everyone (who doesn't know the discount code). Just "differentiation" and "price point". Offering a different price to someone who "calls" from San Francisco, Kansas City or Mumbai is a different issue, and less palatable.

Often the hardcover version comes out well in advance of the paperback, so if you want the book as soon as it comes out, you have to pay the premium for the perceived "premium product". Only later does the paperback come out at a lower cost, while the hardcover retains its higher cost -- I'm not sure if it drops a bit when the paperback comes out or not.

This is a lot like back in the movie rental days. The VHS cassette for a new release would be $120 or something, and only a few months later could you buy it at the grocery store checkout for $25.

I remember when I was looking for new cookware a while ago, there were rumors that Kitchenaid was selling rebranded Demeyere pots and pans. It sure looked like the exact same cookware in the photos. But Zwilling is known to disguise the same pan in 30 different ways, and for anyone willing to trade the "Demeyere" label for a "Kitchenaid" label, they were getting a steal of a deal.

Is that really price discrimination?

“Enthusiasts” might have legitimate reasons for preferring hardcover (durability, aesthetics, etc) and are willingly and knowingly paying extra for that.

How much it cost to manufacture is mostly irrelevant.

Coming from the hardware world, wait until you learn about e-fusing chips to lower tier products!

I've worked at a place where there was exactly one chip and ~8 ways to disable different things to make the whole product family, with nearly 2x difference in cost between low and high. This is usually done by disabling bad sections of the chip, but if yields are too high, you just disable functioning bits of good chips. Our yields were great. :-|

American publishers tend to give one a choice: hardbacks, more expensive, clumsier, but made for heavy duty; paperbacks, less expensive, handier, but not holding up as well under wear. And in general the first year of publication one can buy only the hardback--which is why I don't like book clubs that want to read only new books.

> I'm starting to think that like 80% of product diversity is really just pricing discrimination in disguise.

I think the term used for this practice is "market-segmentation".

A lot of luxury products are like this. For example a lot of wine on shelves are literally the same wine under different labels and price points.