Holidaymakers hoping to book last-minute getaways to green list countries could be contending with more than just changing government guidelines this summer as secretive algorithms use our online habits to hike prices faster than the click of a mouse.
The Government is set to review its green list later this week with most popular European holiday destinations currently rated as amber, meaning holidaymakers have to self-isolate for 10 days on their return to the UK.
Speculation around previous announcements have already seen wild spikes in pricing, with some flights to Portugal increasing 10-fold ahead of the country being added to the green list last month.
Experts have warned computer algorithms which monitor search traffic as well as potentially utilising customers’ browsing histories, location and shopping habits mean travel firms are likely to stay one step ahead as customers look to find affordable deal.
Dr Bruce Wardhaugh, senior lecturer in competition law at the University of Manchester, told i: “Prices will jump as countries fall on and off amber and green lists.
“This will cause spikes in demand, which will cause increases in prices. Consumers will notice this – ‘Yesterday the price was X, today it’s Z, the airline companies are ripping me off’.
“We already saw it happen when Portugal was suddenly removed from the green list. So in this sense, these algorithms will be more relevant.”
Airlines use dynamic pricing algorithms – which adjust flight prices based on demand for specific flights or destinations, the date and time of booking and the number of remaining seats.
Experts believe the vast majority of airlines, price comparison and holiday sites can also deploy algorithms to present visitors with different prices based on what it estimates an individual is willing to pay.
This can be based on a user’s IP address, which reveals their location, and internet cookies which reveal previous web browsing and online shopping behaviour.
How to minimise companies’ web tracking
1) Delete your cookies
“There are several ways to try and get around these sort of algorithms,” says Dr Bill Mitchell. “One is to regularly clear the cookies from your web browser. Using cookies basically allows companies to have access to information you’ve left lying around on your computer that tells them about your previous behaviour. For example, if you’ve previously booked business class, they can infer you might be more likely to book it again. Regularly clearing your cookies will make it harder to track this past behaviour.
2) Use a VPN to mask your IP address
“Airlines have historically charged different prices depending on your country of origin, which they can determine online from your IP address. Using a VPN (a virtual private network designed to create a secure private network connection to a public internet connection) masks your geographic location, meaning you may get charged less for a flight than you would otherwise. Slightly smarter VPNs can tell the website you’re looking at that you’re in a different country entirely. Alternatively, you could ask a friend who lives abroad to book your flights for you.
3) Use incognito mode
“The whole point of using a privacy mode in a web browser is to prevent it from collecting cookies, your browsing history or site data, which you can combine with a VPN. This will give you quite a lot of protection, though you’ll need to be careful to use each incognito window for a single purpose. Logging into existing accounts stops that anonymity, as the browser knows who you are again.”
Dr Bill Mitchell, director of policy at BCS, the Chartered Institute for IT, said: “Airlines want customers to pay the highest price that they can, but you don’t have any information as a consumer.”
You trust that this platform is providing you with objective, impartial, independent information about the minimum price of a flight, which is not the case.”
We don’t have travel agents any more, who did their best to find you the cheapest flight because you were their client. Whereas when you have an online platform, you’re the product.”
The Office of Fair Trading deduced that while personalised pricing was technically possible, there was no evidence of it being used by UK firms in 2012.
The Competition and Markets Authority (CMA) expanded upon the study six years later and found no evidence of personalised pricing, though it conceded it had not checked for variations in the geographical location of the user or their purchase and browsing history.
Regulator Ofcom has described personal pricing as a “sophisticated form of price discrimination,” and the Competition and Market Authority (CMA) recently published a report warning how the systems could generate and exploit consumers’ insecurities, weaknesses and biases.
“If personalised advertised pricing is as limited as it appears to be, this may be due to businesses’ concerns about the potential reputational impact of personalised pricing and reflect a belief that consumers will view personalised pricing as unfair,” the CMA said in January.
“They may therefore employ other techniques to personalise prices that are harder for consumers to detect.”