The Daily Telegraph - Saturday - Travel
Tourists are being unfairly targeted by ‘surge pricing’
We are all used to peak-time price hikes – but when pubs are getting in on the act, it has gone too far, says Nick Trend
As travellers we are used to costs going up when things get busy. We call it peak-time prices. What’s more, travel companies have been at the forefront of maximising the potential, developing “dynamic pricing” so that the cost of an airline seat, a package holiday or a hotel room is adjusted up or down according to demand.
But the way this kind of flexible pricing is now being expanded and applied is starting to feel personal. It’s as though consumers, who are already vulnerable to the expense of high season, are being cynically targeted for extra revenue. The phenomenon has even been given a new name: surge pricing and a recent survey by Barclays suggested that nearly half of us have noticed an increase in the phenomenon.
The latest example of this was last week’s announcement that ticket prices on the Paris Metro will virtually double while the city is hosting the Olympic Games. Between July 20 and Sept 8 2024, the cost of a single ticket will rise from €2.10 to €4 and a 10-ticket “carnet” will jump in price from €16.90 to €32. This is happening despite growing concerns as to whether the city’s transport system will be able to cope with the sharp increase in passenger numbers.
Locals with monthly or annual passes will be protected from the rise, while other residents can stock up with carnets in advance to avoid the increase. So it will be tourists and sports fans – those who have come to celebrate the Games in the host city – who will foot the bill. Even though they will already be paying through the nose for their hotel rooms. A report published last month by the Paris tourist office suggested that rates will soar during the Olympics – up 366 per cent compared with summer 2023 in two-star hotels and 475 per cent for three-stars, for example.
The cynical move on the Metro comes as dynamic pricing is starting to spread to other areas. Recent examples have been rock gigs priced according to demand and pubs upping the cost of beer at busy times – as proposed by the Slug and Lettuce chain a few weeks ago.
Obviously, there can be a positive side. Those of us who are flexible enough to avoid peak times may find prices come down. I suppose the drinks industry could argue that happy hours, which have been a thing for many years, are an example of the opposite effect – prices falling during quiet times. But I’m not sure that rings true. Happy hours simply extend drinking hours to get people into pubs and bars before they would normally think of going, and then hope that customers stay on and drink even more at “normal” prices.
Overall, my beef about surge pricing is threefold. First, it penalises those of us who have fewest choices. Families with school-age children have long had to pay a high price because of the demand for holidays in peak season. Surge pricing could mean they have to pay yet more in restaurants and attractions. Some may celebrate the marketplace as efficient, but it can also be brutal to those who are least able to be flexible and often least able to cope with soaring prices.
Secondly, surge and seasonal pricing means we end up paying yet more for an often significantly worse experience. It’s harder to get a table, service is slower, airports more unpleasant, delays longer, pistes and ski lifts more crowded – you don’t need me to go on. Frankly, most businesses are making good money at peak times. Sure, they have to work harder, but by definition they are already well-rewarded for it.
Finally, confusion is never good for consumers. If prices go up and down all the time, it makes them very complicated to understand and very hard for us to know when we are getting good value. Although, of course, there won’t be much to be confused about in Paris next summer. The Metro will be hot, extremely crowded and you will be paying through the nose for it.