Wacky package price blamed on “anomaly” in program

When you buy a travel package through an online travel agency, you expect the price to be significantly less than if you booked each item separately, right?

So did Thao Tran when he was shopping for a trip to Chicago on Orbitz. But just for kicks, he asked for a price quote for the hotel and airfare.

Shockingly, the a la carte price was less than the package rate.

What the …?

Tran explains:

While booking a trip to Chicago, I noticed that the “packaged” price for a flight and hotel on Orbitz was priced at $585.81.

However, using Orbitz to price the two items separately, with the exact same information, the flight was $250.69 and the hotel was $319.44. This totals to $570.13 — almost $16 less than the packaged price. Of course, I could easily book it separately to get the lower price, but I had a coupon code for $50 off a hotel and flight package, and I wanted to maximize my savings.

I called Orbitz to find out why this may be. The person in sales confirmed my findings and said it was the first time he has seen a package price be higher than the sum of the individual components. However, he had no idea why that may be, and there was nothing he could do about it.

He then transferred me to customer service, who didn’t even bother looking into my inquiry but dismissed it as “the dynamic nature and variability in prices”. This explained nothing to me, as I expect any hotel and flight package on any site to be, at the very least, equal to what I would purchase on that same site in separate bookings at the exact same time.

I then requested to speak to a supervisor, who also mentioned that this is the first time she has seen a package priced higher. However, she insisted that there is nothing she can do, that there is no one else I can talk to, and that the system is just the way it is.

I also want to ask… is this common practice?

No, it is not. I asked Orbitz about it, and a representative blamed it on “an anomaly in the algorithm related to variable nature of hotels and airlines setting their prices.”

Packages should always cost less than the sum of their parts.

Tran’s experience makes an important point about doing your due diligence when you’re booking a travel product: shop around. Compare the price on another Web site and on the site you’re on.

Packages are typically a great deal. But not always.

(Photo: Refracted Moments/Flickr Creative Commons)

  • Thomas Brenneman

    Nothing new, I’ve seen it numerous times. The air fares are the best example. Flying to Hong Kong in business, the round trip fare was around $4800. When I priced it as one-ways, it totaled just over $4000.

    I use Orbitz, Travelocity, etc. to check prices, then go to the carrier directly. Often times, it’s less. Also, if something happens like a flight delay due to mechanical or weather, the airline will put you up at their exspense. Try and get that out of Orbitz!

  • hmmm

    I’ve seen that happen recently as well. The package price did not have the lowest airfare available and was about $100 more.

  • y_p_w

    There are all sorts of pricing anomalies. I tried booking a flight for two passengers, and the airline’s website and other booking engines were consistently giving a fare $40 more per passenger compared to booking a single passenger. The booking engines like Orbitz and Expedia were stating that there was only a single ticket left at (about) that same fare. So I booked once at the low fare on the airline’s website then figured I’d be paying the higher fare for the next ticket. I got the same fare. Of course after I’d got that fare twice it was giving the higher fare even for a single passenger.

    I also like checking with the services then going to the carrier. It’s one less layer of blame to go around. I typically find the price is almost the same, and (with the airlines suffering) I actually feel better that the airlines don’t have to give a cut to a third party.

    As far as I can tell, the only advantage to booking together would have been that we could have shared a single change fee if we changed together. Still – the additional fare would have been $80 more total and the change fee is $75.

  • Noah

    Every month I buy a pass for San Francisco’s Muni public transit service. It is effectively a package deal — it entitles me to as many rides on Muni as I want in a month. During months where my life requires that I use a car more often, I pay more for this package than I would if I paid for Muni a la carte. It is clearly worth more to pay for the package because have to deal with the hassle of having the right cash.

    Just pointing out that sometimes it makes sense for a package to cost more than its parts.

  • SandyC

    The travel companies have succeeded in getting everyone to believe they will get a better deal by purchasing a package. That’s how they make money. In some cases, such as Hawaii, it usually is cheaper. But for a lot of domestic city packages, you’re better off purchasing the items separately. For one thing, if your plans change, you can usually cancel a hotel reservation with just a 24-48 hr. notice without penalty. And change your airline ticket with just a $100-$150 penalty (unless you’re flying with WN, in which case, there’s no penalty). If you have purchased a package, you stand to lose as much as 100% of the package price for cancelling so close to departure. Unless, of course, you have purchased cancellation insurance….which adds even more to your travel costs.

  • Victoria

    That happened to us last year on a trip to Hawaii. Continental will guarantee its price is cheaper, so I booked through them as it was about $25 cheaper per person–a savings of $100. For the hotel. if we booked directly with Hyatt, we were entitled to a AAA rate, which saved us approximately $75/night, and entitled us to a free breakfast buffet each morning. Got the AAA discount on the rental car too, saving 15%. Overall we saved several hundred dollars over the package price through Orbitz, Travelocity or Expedia (I checked them all).

  • Kevin M

    Noah,

    Your case isn’t the same sort of apples-to-apples comparison; an “all-you-can-use” ticket is not a combination of ten, fourteen, twenty-six, or ninety individual trips. It’s a convenience pass that says, in effect, “for a flat rate high enough, we’ll forego the hassles of keeping up with dollar balances on your pass, and you can forego having to monitor the balance and add money to the card when you need it.

    Even if you’d purchased a card entitling you to, say, fifteen trips at the price of ten as long as they were used within the month, skipping six of the trips wouldn’t mean they charged you more per trip taken – it means you bought tickets and threw some of them away.

    Package travel, for the sake of this discussion, means combining component A and component B of a trip together-airfare and hotel, airfare and rental car, hotel and rental car, whatever. Assuming each is supplied via its own company and it’s travel company C that sells them to you, there’s really no justifiable reason at all that buying A and B together from C should be priced higher than buying them as a package. What fool would buy them at a higher rate?

    Sandy’s examples aren’t of packages being priced higher, but the downside to the savings you *should* be seeing in a package price: packages are often noncancellable. But that’s a different issue than the price of bundled vs. unbundled components. And Victoria’s experience (combining special discounts) also skews the comparison because you expect the AAA price to be lower than the rate available to the general public. Again, not apples-to-apples.

    Chris’s original point is valid: If a travel company is combining Component A and Component B into a package, there is *no* reason that package should ever cost more than those *exact* same items, priced separately and added together. None.

  • noah

    Kevin M,

    You said: “Package travel, for the sake of this discussion, means combining component A and component B of a trip together-airfare and hotel, airfare and rental car, hotel and rental car, whatever.”

    Okay, I mean, if you want to limit the definition of package travel to that, I guess you’re entitled. I don’t that makes any sense, though. In these days of unbundled charges, anytime anybody is combining two things that you might ordinarily purchase as individual items should be considered a package, and, indeed, is considered a package by many people other than you. For people like me who do most of their flying on Southwest, even a ticked priced by a round-trip fare instead of two one-way fares is a package deal.

    Of course Chris’s original point is valid, but it goes a bit too far. SOMETIMES, it makes sense for a package deal (defined the way most people actually think of it) to cost more. But not often. My only disagreement was that Chris seemed to be saying that a package deal should *always* be cheaper. I just don’t agree with the “always.”

  • http://www.air-savings.com sonny chatrath

    This happens all the time. I have clients who come to me with pricing, and 6 out of 10 times it is cheaper to book air, and hotel seperately. Mr. Brenneman you are absolutely right about the part about booking directly to save the hassle at a later point, but I think if you use a travel agent to book your flights, and if they are in the premium cabin, your agent will go out of the way to ensure that you are well taken care of, that’s why online giants like expedia and orbitz don’t charge a service fee, because they don’t provide you any service. I recently had a situation with the snow storm in new york, where my client had purchased two seperate tickets to get a cheaper airfare. Delta from St Louis to New York, and Emirates from New York to Kolkata(India). He called Emirates to let them know that his flight on Delta was cancelled, but Emirates couldn’t care less. They told him that since the domestic leg was not a part of the itinerary, he would have to pay $200 per ticket (he had 4 tickets) plus difference in fare. He reached out to me on Sunday 12/20, and I got in touch with my rep at Emirates on Monday, got the fees waived and got his tickets re-issued. He was so paranoid, that he got the Delta tickets refunded, and flew into New York on Monday, spent two nights in a hotel in New York at his own expense, and flew out to Kolkata Wednesday morning. Moral of the story, use a professional to take care of your needs, you may save $20 – $50 by doing it yourself, but imagine the aggravation you can save by having a professional take care of you. My client called me from India to thank me, to me that is more than anything in the world.