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David J. Danto

 

 

Business travel thoughts in my own, personal opinion

 

 

 

eMail: ddanto@IMCCA.org      Follow Video & Technology Industry News: @NJDavidD        

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Getting Even With The Greedy ____

Some years ago, Monty Python’s Eric Idle went on a “Greedy Bastard” tour of America.  Then last year, Mr. Idle toured parts of the US with John Cleese…and yesterday I saw Mr. Cleese chatting live at the NJ Performing Arts Center - at a showing of Monty Python and the Holy Grail (a brilliant man, and great to hear him reminisce.)   What does all this have to do with business travel?  Stay with me here for a bit.

I’ve written many times about how technological advances have allowed greedy companies to take advantage of consumers.  Things like using past data to gouge customers, charging different people different prices based upon a perceived ability to pay or perceived need, etc.  Instead of fairly pricing a product or service, these companies feel they should be able to charge whatever the market will bear for everything they do.  Airlines specifically feel that if there are only a few seats available on a flight, they should be able to charge a premium for that high-demand, low supply product.  That is exactly what they did after the recent Hurricane Irma.  Prices jumped from ~$600 to ~$3,500 for a seat out of the danger.  This wasn’t a case where the airlines intentionally wanted to gouge customers in the crisis, but it is illustrative of how unfair the automatic supply and demand pricing is in this (and every) industry.  Coast to coast fares to Las Vegas for the January 2018 CES Conference (the largest in the US) are already over $1k each – on planes that are nearly empty today.  The demand in this case is anticipated, not real based upon supply.  Taken to the nth degree, these activities are no better than charging $100 for milk or water during the hurricane.  Companies should be able to make a decent profit on their products and services by fairly pricing them on a consistent basis all the time.

There really isn’t an easy way (short of the much needed re-regulation) to fix this in the travel industry, but there is now a way to get a bit even with another industry that is employing this supply and demand pricing – the live entertainment industry.

When I wanted to take my son to a baseball playoff game a few years ago, and I (of course) didn’t win the lottery to buy the few tickets the team made available, I had to go to the legal secondary market to buy the tickets.  Ticket “scalping” used to be illegal, but not only is it legal now, even most venues keep inventory aside to sell at “premium prices” - again highlighting this supply and demand mentality.  For the playoff game, I went to a ticket exchange website and bought two tickets for about 400% over face value, assuming that someone lucky enough to buy them got them before I did and wanted to make a profit.  I was stunned to find out the tickets were being sold by the team, who was just using the secondary market to gouge.  Supply and demand again…

However, I’ve come to learn that the flawed supply and demand mentality works both ways.  Last year, during leisure travel, my wife and I wanted to see some concerts at large venues (The Rolling Stones, Barbra Streisand, etc.)  The prices were astronomical for decent seats, so we didn’t buy any tickets.  We checked again the day before the show and stunningly the prices had dropped dramatically.  The venues held so many seats as “premium” (and other scalpers had speculated on the demand as well) that there were plenty of good seats left.  We didn’t get to see the Stones, but we did buy floor seats to see Barbra at the very last minute (within an hour of the performance.)  Not only were they far cheaper than the gouging of a few days earlier, they were about 1/8th of face value – supply and demand, but this time in our favor.  That was a terrific lesson learned.

We live about 20 minutes from a large concert venue, and about an hour out of Manhattan.  Because we sometimes have the ability to make last minute plans we’ve now started using this knowledge to purchase premium tickets to events at the last minute.  We saw Paul McCartney last week with tickets that were 1/3 of face value, and we saw Mr. Cleese (as I referenced above) in ~$250 VIP seats for ~$40 a ticket – which we purchased three hours before the event.  And the tickets – purchased from a third party reseller site - came right from Ticketmaster (not some individual that speculated and lost the gamble.)  If one doesn’t mind the possibility of not going to an event, this is clearly the way to buy tickets to large venues going forward. 

Now you might ask yourself, “What will happen if scalpers and the venues continue to take losses on these overpriced tickets?”  I believe, if more and more of us wait ‘till the last minute to buy tickets, and the venues and ticket companies take significant losses in the process, we have the possibility of breaking the unfair supply and demand pricing model in this industry. 

My advice is that everyone should create an account with firms like Stubhub and the smaller and less expensive TickPick and take a look at their local venues for shows they’d like to see.  Maybe they’ll be sold out, but maybe the greed of those involved have “supplied and demanded” them into last minute fire sales.  Go enjoy a night out at movie prices.  If enough of us do it then maybe the supply and demand gouging might be rethought.   

So, instead of arguing or complaining about supply and demand pricing (“You want to complain! Look at these shoes. I've only had them three weeks and the heels are worn right through….If you complain nothing happens, you might as well not bother...”) you can actually do something to effect change – at least in the live entertainment industry.  Buy as many last minute tickets as you can.  Let the players know you intend to take advantage of their broken and unfair supply and demand system and make their losses pile-up.  Use the savings for something else – like paying for overpriced airline fees…or buying shrubberies.

 

This article was written by David Danto and contains solely his own, personal opinions.

All image and links provided above as reference under prevailing fair use statutes.