Jimi Smoot Entrepreneur / Software Engineer

Everything has a cost but that cost isn't always a monetary one.

Remember that you get what you pay for

Everything has a cost but that cost isn’t always a monetary one. Unfortunately for travelers, cramped seats, overbooked flights, and lost bags are a few of the many costs “cheap” air travel.

Take for example a recent episode I saw online.

It was late and a family with two young children were on the last leg of their trip home from Disneyworld. They boarded the last flight of the night but were forced to deplane because one of the family member’s seats was oversold.

“But I paid for this seat” the father argued. The security guard didn’t relent. Another passenger was appalled and decided to take action by recording the entire episode and sharing it on social media. Everybody on the interwebs talked crap about the airline for a week while secretly going to cheaptickets.com to book their next flight with the airline, because “the flights on the others are too expensive”.

It’s easy to criticize the airlines for overbooking and bad service but it’s also easy to overlook one simple thing:

The market is very smart and it makes companies conform to its needs –not the other way around.

If customers valued good service then market forces would have pushed the airlines to optimize for good service. Instead, however, the market forces airlines to optimize for the price.

So in this case its just another case of “give the people what they want”.

Don’t believe me? Let’s look at the data.

Keywords Analysis

I pulled this data directly from Google’s Keyword planner. It shows Google’s monthly search volume estimate for phrases like “cheap flight” and “best airline”.

Search volume is important because it gives us a good idea of demand since people typically search for things that they need or are important to them.

In this case, demand indication is obvious. “Cheap flights” is searched for monthly 9900% more than “best airline”. So people want “cheap flights.”

This makes sense when you consider that there is an entire industry of Online Travel Agents (OTA) that are dedicated to helping prospective travelers find the lowest cost.

My assumption is that the OTA’s know their customers very well, so to get another proxy for how much the market cares about quality or service we can take a look at what the OTA’s talk about on their landing pages.

To figure this out I pulled up a couple of the OTA landing sites and ran a Command-F on the page for a few words. In the future I may do a deeper dive on these pages, however, here is the outcome of this naive experiment.

On Orbitz:

  • “Save” and “Savings” was mentioned 15 times
  • “Service”, was mentioned 1 times
  • “Quality” was mentioned 0 time

On Expedia:

  • “Save” and “Savings” was mentioned 10 times
  • “Service”, was mentioned 2 times
  • “Quality” was mentioned 0 times

On Kayak:

  • “Save” and “Savings” was mentioned 3 times
  • “Service” was mentioned 1 time “Quality” was mentioned 0 times

Those were the only OTA’s I knew off of the top of my head, so to find some others I did a search for “flights to NYC” –in incognito mode so that I got unbiased results. The top 10 results included the ones I mentioned and a handful of others; “cheapflights.com”, “cheapoair.com” and “farecompare.com”. I opted not to do my naive landing page analysis on these sites because their value propositions are all obvious by their names.

Just for kicks, I went over to NetJets to see how they market themselves and found that, front and center, they talk about a partnership that they just cut with a Michelin star chef José Andrés. Looks like their customers are very service oriented. I wonder how often they deal with overbooking issues.

I guess you really do get what you pay for. So the cost of that cheap airline ticket also could be that you are bumped from your flight. It’s probably best to make sure you can afford it.

Tags: markets and analysis