What Everyone Ought to Know About Group Travel

Recently we got a phone call from someone in a company who wanted to take 40 people to Las Vegas.  It was a corporate trip of some kind, maybe the participants won an incentive.  Maybe they were going to attend a conference.  Maybe the company was betting next month’s payroll.  I have no idea.

Anyway, point is that they needed to take 40 people to Las Vegas.  Of course the secretary did her due diligence in looking at prices online before she called us.  (This was not someone we already had a relationship with. She found us online.) She priced 2 people with air at the hotel they were considering.  She made note of the price.  Then she called to ask our assistance in getting all 40 people booked.

She was quite shocked to learn that the per person price for the 40 people was higher than the per person price for the 2 people she priced online.

Why was the price higher?  It has to do with inventory control.  Primarily, it’s the airline.  They sell certain number of seats at a lower price on each flight, then the price for subsequent people goes up in stair steps until finally the last few seats on the plane go for quite a high fare.  They aren’t going to sell you 40 seats for that loss leader price you see for the first two people you price.  The group of 40 will get a per person price that is an average between that low price you see for the first two, and the really astronomical price you don’t see yet for those last few passengers.

Doesn’t it make logical sense, though, that the 40 person group would get a better price than what they would give 2 individuals?  That does seem to make sense, but remember, we’re dealing with airlines here.

They wouldn’t have that flight operating in that market at that frequency if they didn’t already know from historical data that they could fill the plane up at the price that makes it profitable for them.  If they didn’t already know that they could fill that plane up, they would have already moved it into a route where they could.

Or, they’d ground the plane.