You may be paying more for travel because of where you live. Here's how you can save
WASHINGTON (7News) — If you're planning to travel this summer, there's a chance you'll pay more for your flights, hotels and cars --- not just because prices are up --- but because you're in the United States.
Turns out, your geography may dictate what you pay because of algorithms companies use that generate what they call “dynamic pricing.” It's a way of maximizing profits by changing the price depending on who's buying when, and from where.
“Richer countries, we see that they tend to often overpay for same offerings elsewhere," said Gerald Kasulis, Vice President of Business Operations for Nord VPN
“If you are looking to book a flight and then you recheck that same flight, you know, a few hours later, the price will be different,” Kasulis added.
READ | Record 42 million Americans expected to travel Memorial Day Weekend: AAA
His company recently commissioned a study using a Virtual Private Network or VPN to trick travel sites into thinking they were in countries other than the U.S. when booking cars and hotels. A VPN is a common security tool that encrypts data and hides your IP address.
“We were shocked by the results,” said Kasulis.
Using the VPN to make Hotels.com think they were in Mexico, researchers saved a whopping $57,415 on a luxury Los Cabos hotel that cost 68% more using a U.S. server.
Using an Italian server to access Booking.com, they report saving $543 on a family vacation to Venice and often were able to pick up rental cars for a third less than what identical sites were offering when they detected a U.S. server.
“Those algorithms are being used against us to potentially trick us into paying more than we should be paying for that particular flight, holiday, you name it,” said Kasulis. “So, I think it's time that we take control into our own hands as well and start using those algorithms to our own advantage."
7News put it to the test, comparing identical car rentals and hotel stays, for a family of four, using a U.S. IP address and then using a VPN to make the websites think we were in another country.
ALSO READ | Planning to catch a flight? Check these travel tips first
Most of the time, the prices were comparable.
But occasionally, there were some real money-saving opportunities.
London's Royal Garden Hotel was $6,286 for an eight-night stay for a family of four when 7News used a U.S. IP address. But when we used the VPN to switch to a server in the United Kingdom, we saved $352.
On average, our savings were around 7%.
“I flew from Vietnam to the United States and then from the United States all the way to India. It was somewhere between $500-$700, so that's a heck of a deal. I always use VPNs,” said Brock Blohm.
Blohm is a travel writer who’s been exploring the world and writing about it since 2016 on his site SoloTravel365.
He said over the years, he’s developed a lot of tricks for saving money, and using a VPN is one of them. But he said you must be patient because you won’t find discounts 100% of the time.
“Don’t be discouraged when using a VPN,” said Blohm. “There are going to be people who use this and they don't see a change. It's either option one: that website is not using dynamic pricing. Or option two: they are, but you're just choosing the wrong areas. You’ve got to keep bouncing around until you find the right server.”
For international travel, Blohm recommends choosing a server that is close to your destination and for domestic travel, try VPNs where airlines are headquartered, or in cities away from expensive metro areas.
And Blohm said VPNs can help you get around all kinds of dynamic pricing to outsmart the industry and get some savings satisfaction.
“AirBNB uses it. Amazon uses it. Major League Baseball has used it. Ticketmaster uses it,” said Blohm. “So, it's not just traveling that you can benefit by using a VPN. There are other websites that use this as well.”
Of course, the number-one reason to use a VPN is to protect your privacy and data, so outsmarting websites is really an added money-saving bonus.
Step-By-Step instructions to maximize a VPN search for travel deals:
- Log into the travel website using your own location to get a baseline for the price
- Close the website
- Clear your browsing history, cache and cookies
- Turn on your VPN
- Choose a location outside of the U.S. and close to your international destination
- Go to the travel website and see if prices are different, now that you’re logging in from a non-U.S.-server
- (Remember that you will need to convert foreign currency into U.S. dollars for an accurate comparison. There are many easy-to-use currency converter websites you can find with a quick search)
- Every time you move your server location, it’s a good idea to clear your browsing history, cache and cookies
