David J. Danto
Business travel
thoughts in my own, personal opinion
eMail:
ddanto@IMCCA.org 
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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.