A friend was looking to book a Hawaii flight this week. They looked once, but the next time they looked, just hours later, the price had gone up dramatically. So what gives?
We came to believe there was a prevailing price when buying flights to Hawaii or elsewhere, and at one point in time, that was true. Now, however, the world, together with airlines flying to Hawaii, vacation rentals and Hawaii hotels, too, employ sophisticated dynamic pricing of their inventory.
Read on for some of the things you can do to prevent this from raising your Hawaii airline tickets even further.
What it comes down to is this: pricing of flights to Hawaii is based on contextual signals.
Airlines don’t have one price for a flight to Hawaii. They’ve implemented products such as Architect to help refine their “revenue management.” We know these products well, and are addressing them today from the viewpoint of the consumer. We want you to understand what is happening, and how you can best manage it from the buyer’s perspective.
Dynamic pricing will yield much higher Hawaii airfares this summer and beyond.
In looking at summer prices for Hawaii airfares, across all of the airlines, we got a dose of sticker shock. Prices are on the climb and are set to return to previous levels and beyond. Honestly, the only thing keeping fares in check at all at this moment, is Southwest Airlines. Their entry into Hawaii flights has remained a disruptor that, to a greater or lesser degree, suppresses Hawaii flight prices. In markets where Southwest flies, you’ll still find up to a 50% suppression in prices. That’s where the best deals are, no matter which airline you choose or which season.
Alaska is just one of the airlines moving to the most sophisticated dynamic pricing. The airline recently announced they have partnered with APTCO, and will use their Architect pricing tool going forward. Airlines can spend less time on fares using such tools, which find the best yields using extensive data about our shopping habits, among other things.
Alaska Airlines’ revenue manager Kirsten Amrine said, “When ATPCO showed us the capabilities of Architect, we saw a clear vision that aligned with the way Alaska Airlines imagines the future of pricing management. Architect’s capabilities enable us to be even more strategic, and we are taking advantage of the efficiencies Architect offers to unlock the full revenue potential of our network and pricing strategy.”
Pricing of flights to Hawaii before dynamic pricing.
Airlines used to use what’s termed “static pricing.” Airlines created fare structures containing a limited number of prices, which were then widely published. With static pricing, the fare from Los Angeles to Honolulu remained relatively static, at least for a certain number of hours or days. Flights from Honolulu to Los Angeles, on the other hand, wouldn’t necessarily be priced the same, even with static pricing. Variability existed with static pricing for seasonality, nonstop versus with stops, days of the week, and other factors.
Enter dynamic pricing on flights to Hawaii.
With data-driven dynamic pricing technology, and tools such as Architect, airlines can thoroughly analyze the competitive environment, and use constantly changing actionable analytic data to segment pricing granularly. These tools are now deemed imperative for airlines, hotels and vacation rentals to remain competitive and achieve maximum profitability.
Real-time pricing changes to adapt to current market conditions.
With dynamic pricing, the cost of your flight to Hawaii is in a constant state of flux. The airlines evaluate competitor pricing, events and other things causing spikes in inquiries, your personal searching and booking patterns, and so much more, to determine and show you “your price.”
Airlines selling flights to Hawaii want to sell the most seats at the highest possible price.
To determine what prices they can charge, airlines dig into the nuances of passengers’ online purchasing behavior and greater market demand.
Ancillary charges will also now be dynamically priced.
The airlines reap more than $50 billion annually on these extra charges that can include baggage, seat selection, meals, internet, and more, depending on the airline. These fees are ever escalating, as you’re well aware. The problem for airlines is that until recently, these products were managed separately, outside revenue management. Therefore, they’ve been offered using static pricing without regard to who the customer is or the circumstances of their purchase.
The industry is now moving to an approach they call continuous or total dynamic pricing.
Continuous pricing is the ultimate method of adjusting prices in real-time based on contextual signals. IATA has named it “Dynamic Offers” and this is becoming the new standard for pricing with its holistic approach to revenue management and greatly improved demand forecasting and personalization.
Using artificial intelligence and machine learning.
These advanced technologies are where the travel industry is headed. It’ll bring with it an attempt to closely match pricing and offers to exactly what contextual data reveals are the customer’s hot buttons. This will increase purchases while contouring offers just to what a customer might want, and either adding or eliminating options as indicated. Airlines will also know from your shopping experience whether, for example, you’d be open to an insurance offer, or a car rental or accommodation, purchased together with your Hawaii airfare.
Hawaii tickets vs. Hawaii offers: the new Hawaii packages.
A new product amalgamation is forthcoming for Hawaii-bound visitors and elsewhere, and that’s called offer management. Think of it as the next generation of Hawaii packages, if you will, but on steroids. The idea is to present to the potential buyer the exact mix of products at the most likely price to be accepted on the spot based on that particular user. The offers may consist of both basic services, together with options deemed appropriate, which we can then either accept or reject. And guess what, based on whether we buy or don’t buy, the airlines will then adjust the next offer accordingly.
What happened to airlines filing specific Hawaii airfares?
Airlines are moving to either increase the number of Hawaii airfare price points or to make them virtually unlimited. This is being called Dual RDB as proposed by ATPCO. It makes it easy for airlines to increase their options for pricing without requiring changes to scheduled filings. Fare filings are becoming automatic using this system.
How close are we to total dynamic pricing?
We’re nearly there. Going into 2022, airlines were slow to move from their traditional fare distribution systems. But as can be seen by Alaska Airlines’ partnership with Architect, times are changing quickly.
Tips we use and suggest to others to avoid higher than necessary Hawaii airfares.
First, always keep in mind that your browser contains a plethora of information about you. Sometimes that is very helpful, but in this case it can work against you.
Try using a “fresh browser,” one you never have used, or using your browser in the “incognito” mode. Google says, “In Incognito, none of your browsing history, cookies and site data, or information entered in forms are saved on your device. This means your activity doesn’t show up in your Chrome browser history, so people who also use your device won’t see your activity.”
Try using a VPN to appear to be in another country. We’ve used this trick before and it’s worked in multiple ways. You can appear to be in the UK when purchasing your flight from Los Angeles to Hawaii, for example. That’s done by using a VPN (virtual private network) on your phone or computer, then selecting a location other than the U.S.
Sometimes it works best to purchase when you first look at the ticket. When the price has risen the next time you look, consider waiting. We’ve had the experience of not purchasing on the rise in price, and then seeing it drop back down in the next day or two.
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Thank you for a thorough explanation of such a complex system. I need to fly there each month and have gone from paying as little as $124.00 round trip from LAX to $502.00 on Hawaiian. It’s just nuts !!
Why is any reasonable person still using Google?
dennis h
Dynamic pricing is no different from opportunists that cheat the public on the sale of water and other necessary commodoties by price gouging during hurricanes and other disasters…shame on Hawaiian Airlines! To earn the public’s trust, Hawaiian Air should know the cost of their service, set a fair profit margin and just stick with that price.
1- Its all airlines
2-Hawaiian Airlines is no different than other airlines. Should they leave $$ on the table that others are collecting?
Dynamic pricing has also greatly affected the awards ticket pricing. When we first started flying to Hawaii over a decade ago, I could get coach tickets for 20,000 miles on AA or 1st class for 40,000 no matter the routing. Now, while it is still possible to get flights for 20,000 AAdvantage miles, they are on horrendous routings that no one in their right mind would consider. A desirable routing can cost upwards of 50,000 AAdvantage miles in COACH! I was fortunate to get 1st class tickets for our trip in September for 50,000 AAdvantage miles about 3 months ago. Tickets for the same itinerary today is 115,000 AAdvantage miles – and those prices are each way!
Mahalo, BOH.
Hi Ed.
Thanks for that perspective. We’re have noticed the same thing. It is getting much harder to obtain rewards.
Aloha.
Interesting!
Hotels and condo rentals have yielded rates either by hand multiple times a day during peak seasons or with automated software for eons. The software that does it automatically at any moment day and night has been available at least 10 years. This is not surprising at all.
Aloha, I find this information disturbing and sad. I live on the Big Island now and am constantly looking for flights for family and friends. I guess it is more important than ever to go incognito. On another note, I tried to rebook my daughter’s Hawaiian Airlines one-way flight due to a stomach bug. Because it was a basic fare they would not do it. My daughter ended up flying and when she got to the gate the flight was overbooked and they were offering $1000 vouchers to give up their seat. This is ridiculous. They obviously knew they were overbooked and could have saved themselves money by allowing my daughter a different flight. There is no common sense anymore. Mahalo for your information.
Hi Tammy.
Thanks for sharing your experience. It seems we have had as many or more issues on interisland flights than on mainland ones.
Aloha.
Always delete browsing history and cookies each time you look at fares or use a private browser oage. Shame on all the greedy airlines. Greed is rampant everywhere. I’d say plan a road trip instead – but who can afford the gas???
I agree 100 percent with your statement that browser history is used by travel sites to “scare” the consumer into buying before prices go up further or sell out. The hotel room consolidators have been doing this for years. This is another example of Big Tech rigging the system to cause economic harm to the user.
I have been having second thoughts about ever going to Hawaii with all the jacked up pricing. High costs for flights, hotels, and parks. I feel like you are nickel and diming people to death. I can go lots of other places for a lot less. Thanks but no thanks.
Amen!
How much of this is your opinion vs. actuality? Your statement of “Ancillary charges will also now be dynamically priced”. There is no data to support this neither has there been any “talk” of this happening. Bag fees are static. Seat selection costs are static. They may change but they certainly don’t fluctuate from day to day. And there hasn’t any talk of this happening.
Just my .02
I guess the southwest will drive down prices myth has been debunked. Good luck to those who can afford Maui prices as a former 20 year resident hard to justify 2 nights at an average hotel for what I used to pay for a mortgage and rent. Oahu prices for hotels aren’t that bad.
I don’t think this is rocket science. You can see it in the price of gasoline. When we booked our trip to Kauai in late spring airfare was very reasonable, and now airfare to Hawaii is higher than anything I have seen in the past. It just reflected in the price of oil and the airlines are passing that cost along. Also, given that much of the world is now opening to travel after the pandemic, I don’t think Hawaii is going to need to worry about too much tourism. Given the fact that both cost and availability are being affected dramatically I think Hawaii tourism is going to see a decrease in the coming fall and winter.
Mahalo Guys.
I have a neighbor who lives up the street, he’s in the business of selling fuel to airlines. This is usually in about six month increments. Last time round the airlines got very good prices on fuel but, this time the prices are much higher. It’s a completed process with many variables.
There is one very large factor in determining the cost of airfare. Just over 80% of the cost to run an airline is the price of fuel. That info from the Wall Street Journal. Fuel cost exceeds the cost of crew, aircraft and airport. I remember when we came back from Kauai last time the plane had a total of 25 people on it. That airline lost its shirt on that flight.
I have had issues with the airline constantly changing my initial flights. I tend to book early and last year purchased and paid for a first class round trip to Maui going thru SF with a return at 9pm with a 2 hour layover in Denver.
After 6 unasked for changes, with the only options to make more than the initial 1 stop per flight, my return flight left at 11:00 PM with a 6 hour layover in Denver. To make matters worse the flight leaving Denver was running an hour late. A seven hour layover is uncalled for.
Have already had 1 “unasked for” change for my 2023 Hawaii flights. Will see how that pans out.
I know your hurt. Both Alaska and United are guilty of this nonsense, I do understand the reasons for those disruptions, it has to do with cost. However, I also feel they offer the nicer looking routing as a come on. Southwest does their booking process much later, it’s perhaps a bit more reliable, however they too will change routing on you. I hate sitting in an airport for long periods of time.
Which airline is this with al the changes ma’am?
I think some of teh flight changes also has to do with pilot and staff shortages, as well as equipment changes. I’m see this on the mainland a lot.
This has been going on for years. It’s not new, they just admit to doing it now. There were many times we would be looking at prices only to have it change, when looked at other times or hotels or even cars.
Mahalo !
How typical, spend lots of money trying to figure out how to raise prices and not improving anything for the customer. If they could figure a way for passengers to fly standing up, they’d do it.
“Sophistication” = Greed.
Hi maybe drop the Air price from Sydney to Honolulu under the $1000 mark they might get more bookings and I don’t mean $ 999