2013
30
December
Where all inclusive prices come from, and why Canadians waste a lot of time searching
30
December
Around this time of year when the temperature drops I often see people asking a similar question, 'What website(s) should I visit to get a good deal on an all inclusive package?'.
And with good intentions, I will often see people reply with something along the lines of 'Check out X site, Y site, and Z site. Those have the best deals!'
But here's the thing. X site, Y site, and Z site will have identical all inclusive package prices. In fact, every Canadian based travel site has identical all inclusive prices.
Why?
Well, this might be easiest to explain with a picture, which should theoretically save me a thousand words.
Here is a diagram that shows where all inclusive package prices come from in Canada, and how they make their way to the consumer...
How time is wasted
The mistake people most often make is thinking that 'The Websites' have control over the prices. They do not. It is the '6 Suppliers' who dictate the prices. 'The Websites' cannot and do not compete against each other on price.
For that reason, the all inclusive package prices displayed on each of 'The Websites' are identical to each other (unless a site is a little behind on getting the latest price updates from 'The Central Hub').
And since The Websites are all displaying identical prices, people often waste a lot of time searching multiple websites.
Adding to the confusion for Canadian consumers is the fact that The Websites all dearly want you to search for and book your next all inclusive vacation through them, to earn a commission from one of the 6 Suppliers.
Their marketing goal is to try and convince you that you will get the best deal exclusively through their website, which is clearly at odds with the technical fact that they are displaying the same prices from the same 6 Suppliers as every other site.
Hopefully this helps a bit in explaining where all inclusive prices come from. I've tried to keep it simple and focus on just the Canadian Tour Operators as the suppliers. There are technically other sources of package prices, such as when sites automatically combine flights from the major airlines with all inclusive hotel rates, but for the most part, when Canadians book an all inclusive package it's from one of these 6 Canadian Tour Operators.
And you may have noticed that I have my own all inclusive package search tool right here on YYC Deals, called the Ultimate All Inclusive Deal Finder.
Just like the other websites out there, it's using the same price data, although I have tried to do some interesting things with the data, such as merging it with other large data sets, like TripAdvisor review data, to help analyze the millions of prices and figure out which specific deals are an extraordinary value at the moment (see 'Value Scores' after searching).
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2 Responses to "Where all inclusive prices come from, and why Canadians waste a lot of time searching"
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This is not true.. I just gave your theory a test drive on itravel200.com & expedia.ca. Same week, same resort, same airline a difference of $80 per person. A savings of $160/couple. The middlemen can cut their prices if they like.
Jo,
You can think of Expedia has having two sections when it comes to displaying package prices.
In one section, they are displaying package prices from the Canadian Tour Operators. Similar to every Canadian based travel site. Let's call this Section 1.
In the other section, they are combining the latest flight prices from the major airlines with the latest available hotel rates to dynamically create package prices. We'll call this section 2.
Do you happen to know if the package you saw on Expedia was from Section 1 or Section 2 ? Can you share the resort name and dates you tried? I'd be interested to take a look at it.
Thanks!
Chris