"Don't Miss The Deal" for travel savings - 13 WTHR Indianapolis

Have you ever wondered how much the person sitting next to you paid for a flight and why? Before you book your next vacation, we can save you thousands of dollars. 13 Investigates uncovered a little known business secret that can cost you big time if you don't know how to avoid it.

"So we're gonna be packin' on the pounds while we're in Russia, definitely," said 13-year-old Andrew Sanders.

Sanders and his five year-old brother Sam are packing for a summer trip that will surely eclipse their friends' vacations.

"I'm pretty excited," Andrew said.

And so is their father.

"Going to Russia. Being able to go to six countries in a matter of two weeks is a pretty big deal. Especially for all of us who have really never been over there," says Chris Fletcher.

And especially for a family of five, any trip can be expensive. Fletcher began planning a year ago for their 14-day international cruise.

"(It's) very expensive. I mean, it's one of those things where you try to price it out, you save. And you just try to get the best deal you can," he said.

He wanted deals for airfare, which most people typically go online to purchase. The game of finding a good price can have you going to several sites over and over again, looking for a bargain. The airlines want to make sure they get the most of your hard-earned money. How much you pay can change, almost in an instant, based on the demand, type of customer, or even the state of the weather.

The strategy is called dynamic pricing - which is widely used in the airline industry.

"Dynamic pricing is really a mechanism where the seller matches demand to the price. So they make adjustments in the price based on the amount of demand," John Talbott, Associate Director for the Center for Education, Research and Retail said.

It's a complex system based on computer technology and algorithms.

Here's how dynamic pricing works:

You and I can be on the same flight, sitting next to one another. I paid one price for my seat, you may have paid double, and you don't know it. The key to what price we paid is when we each purchased tickets.  The amount can vary based on  things, like time of day, how many days in advance you buy, even last-minute buys can be high or low.

All of it is based on supply and demand. For example, during the recent NBA Finals, a flight from Miami to Oklahoma started at $809. A week later and the same time of day, it was $300 cheaper.

Why?

Fewer people were going to Oklahoma City. With no game, there's less of a demand. When demand is high, the industry figures people will pay more - whatever it takes to get there and not miss any of the action.

Fletcher didn't want to miss out on a deal, so he began searching several times a day for cheap tickets.

"The price does fluctuate. It'll go up, you know, a couple hundred dollars within an hour," he said.

So to try to beat high dynamic pricing to get a good airline deal, Fletcher signed up for a price alert. The computer told him when the price went up.

"You were able to set up a reminder, basically saying, 'This is where I want to leave from and this is where I want to go. And it'll remind you," he said.

But make sure if you're doing repeated price searches on the Internet, clear your cookies after each search, because your browser sees and remembers that you may have rejected an earlier lower fare and automatically offers you the next higher price the next time you search.

Dynamic pricing is not just used by the airline industry. Now, some 17 Major League Baseball teams use the strategy. Just this March, the Indiana Pacers began using the system, specifically during the latter portion of the season. Ticket prices varied, based on whom the Pacers played, the night of the week the game took place, and overall demand.

"I would look at several games that maybe are around the same time frame and look at the same seat and see if the price is different. And obviously, you will get a quick sense of who the popular teams are in the NBA. You can do the same thing with hotel rooms if you're going on a vacation," Talbott said.

With the cruise dates set, Fletcher just needed the flexible pricing for the flights and, thanks to his price alert, he finally snatched up five tickets before the cost went up again.

"We were able to get our tickets for the five of us for a little under $4,000," he said.

The savings, he says, is about $2,000 back in his pockets, which is money he now plans to use on the cruise.

"I feel like we got a pretty good deal from the system. I think if you just check them every day and are very persistent about it, then you'll find a good deal. As long as you plan ahead," he said.

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