Many people will have experienced the disappointment of going to book flights, only to see prices have shot up from when they last checked.
Dynamic pricing is a common practice, especially in travel. An expert explained what this is and how to have the best chance of getting the cheapest deals.
Personal finance expert from SaveMyCent, Fred Harrington, explained what to be aware of when searching for deals.
He said: "Most people assume flight prices are random, but there's actually a pattern to when airlines update their systems. Understanding this timing can be the difference between paying full price and snagging a genuine bargain.”
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|Dynamic pricing can make your holiday more expensive, but there are ways around this
Dynamic pricing as a practice is on the rise, with more than 260 airlines worldwide estimated to use some form of the strategy. This is a 20 per cent increase in the last two years, a recent report by OAG found.
The days and times that you book impact how much your flights will cost. While anti-social, a very early morning booking could get you the best deal. According to the expert, the best deals will be online between 12am and 6am, with the "magic window" around 3am to 5am.
Fred added: “This isn't just a coincidence. Airlines typically run their pricing updates overnight when website traffic is at its lowest. By booking during these quiet hours, you're often catching prices before the morning rush of bookings drives them back up.
“You're essentially shopping when the store is empty. Airlines know most people aren't browsing flights at 4am, so they're more likely to offer genuine deals to fill those seats.”
How does dynamic pricing work?
Dynamic pricing models used by airlines are the reason behind price changes. They involve sophisticated algorithms that monitor things like demand and competitor prices.
Fred said: “Think of it like a stock market for flights. Prices fluctuate based on supply and demand, but the updates happen at specific times. Airlines want to avoid crashing their systems when thousands of people are trying to book during peak hours.
“Dynamic pricing models have completely changed how airlines sell tickets, but most travellers don't realise they can work these systems to their advantage.
"Airlines use complex algorithms that factor in everything from historical booking data to current search volume, and these systems have predictable patterns if you know what to look for."
On why it is used, the Competition & Markets Authority (CMA) states: "Dynamic pricing is often seen in markets where supply cannot quickly adjust to meet demand, and where the product itself is ‘perishable’, and loses its value after a certain point in time (for example, a seat on a particular flight).
"In these circumstances, dynamic pricing can enable businesses to make better use of their capacity, invest in new capacity, improve efficiency and maximise profits."
Fred recommended acting strategically to still get the best deal despite this.
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GETTY | When you book will affect the price of your flights
He said: “While the strategic booking window is mainly about timing, it’s also about understanding when airlines are most motivated to move inventory. During those overnight hours, you're dealing with fresh pricing data and minimal competition from other buyers. It's like having first access to a sale before anyone else knows about it.
“I always tell people to leverage technology in their favour. Download airline apps and set up price alerts for your routes, but check them during those early morning hours when prices are most likely to have dropped.
"The combination of good timing and the right tools can easily save you hundreds on a family holiday. The airlines are playing a sophisticated game with their pricing - there's no reason you shouldn't play it right back.”
Booking during quieter times of the day can help you avoid peak fares, and it is worth combining this with other strategic money-saving tactics. Fred explained flights are often more affordable on a Tuesday or Wednesday, when demand is lower.
For domestic flights, he explained booking six to eight weeks in advance is usually the best for availability and pricing. He said: “The key is being flexible with your approach. Set price alerts for your desired routes and be ready to book when you see a price drop during those optimal hours.”