It pisses me badly when I see travel websites promoting their "price match" feature as a benefit to their customers. It is amazing how, in fact, price match policies take advantage of travelers, help keep prices higher, and create tacit collusion opportunities among industry players.

Put yourself in the shoes of a travel website owner now. If your real objective is to provide the lowest prices in the market, you just try to do it. Then, 100% of your customers get that same lowest price. Also, your competitors will need to follow suit if they want to allure their own customers by claiming "lowest prices" for themselves. So, it seems like this competition for lowest price provides an efficient market for customers to find even better deals. But, what happens when you instead provide the price match promise. Well, as a travel website owner, you don't worry about lowering your prices at all. You declare a high price in your website along with this price match commitment. Then, eventually, only a fraction of your customers will continue to research the prices in other travel websites and get back to you to use the price match feature. So, instead of having 100% of your customers getting the lowest available price, you trick your customers to do a lot of extra research (visiting competing travel websites one by one and getting the prices for the very same booking) and to report back to you. Amazing model for the travel website owner.

From customer perspective though, this is tricky. Usually, competitive intelligence is something the travel website owner has to do to keep their prices competitive. But, with the price match policy, the travel websites transfer their competitive intelligence burden to the customers. Also, if every travel website provides price match guarantee in the industry, then you know that prices are being kept inefficiently high. If travel agents are not willing to provide a really low rate but only the price match guarantee, then no one will drive the prices down.

I am really surprised how travel websites are flying under the radar of anti-trust scrutiny with these doubtful practices.