Lock Price and Pay later (Make My Trip)
I was booking a flight on the Make My Trip website and came across the “Lock Price and Pay later” feature.
At first glance, I was impressed with the feature. I can reserve a seat with a minimal amount given that my plans were spontaneous and prone to cancellation. This feature got me thinking. What is in it for the user? What is in it for MMT? What is in it for the airline companies? What is the target group? Is it for domestic as well as international? And thus began short research on the feature.
A brief description:
When you are booking a flight, you can pay a token amount to book a ticket. If the ticket price drops, you pay the lower price. If the ticket price increases, you pay the price you had locked initially. The booking has to be completed within 7 days & the ticket has to be one-way.
I was looking for flights from Delhi to Mumbai on 29th July 2021 and checked the ticket prices and the respective token amounts.
One thing that struck me was that there is no transparency in the determination of the token price. On observation, it can be seen that immediate flights are being charged around Rs 310. A week later, it is Rs 699, and post that it is fixed at Rs 499.
But why was this feature needed? What were the data-driven insights that prompted this?
My best guess is that MMT saw an uptick of people checking flights within a month (impromptu plans) which also saw (high?) non-bookings and wanted to increase bookings and/or monetize the (high?) non-booking rate.
Let’s try to understand what the target groups(TGs) for this feature can be.
In a broad sense, there can be 2 types of travelers. One that plans and books months in advance and the other that makes a plan in a shorter horizon, let’s say within a month, and book tickets accordingly. The second group appears to be the TG for MMT for this feature. Among the second group, this feature looks more targeted towards the users which are indecisive in nature.
Let’s try to understand the user journey while booking a flight on MMT for this feature.
When the user tries to book a flight, the following options are possible.
1. The user avails of the Lock Price & Pay later feature
The user now has to pay a token amount for booking a flight at a later date. This amount varies based on how much in the future the flight is being booked.
Now, the following options are possible:
1a. The user pays the remaining amount within 7 days & books the ticket successfully.
Now, let’s see how the user & MMT are affected because of the rise or fall in the ticket price.
Ticket prices went up(↑)
From a user perspective, it’s a win. They saved money by paying a token amount.
For MMT, it really depends on what the goal of this feature is. If it’s to get an indecisive user to buy the ticket, then it’s a win. But they could have sold the same ticket to another user at a higher price in the future. So it really depends on what the end game is.
Ticket prices went down(↓)
From a user perspective, it’s a win. They did not have to worry about prices going up. The fact that it went down is even better.
For MMT, again it depends on what the end goal is. After all, they made an indecisive user buy a ticket.
1b. The user does not pay the remaining amount and the ticket stands canceled
From a user perspective, it’s a loss of a small amount but a win in terms of saving an even bigger amount.
For MMT, this is pure profit. Since the user has to pay within 7 days, they will still have time to sell it if it’s not sold during that time. (Follow-up question: If they are not able to, will the airline ask MMT to pay for the seat? Would be interesting to see what the agreement is in place.)
2. The user does not avail the feature
For some reason, the user has not availed of this feature. Now, the following options are possible:
2a. The user books the ticket on the later date
Ticket prices went up(↑)
For a user, it’s a loss depending on how expensive the tickets were. This could have been avoided by availing of the feature earlier.
Ticket prices went down(↓)
For a user, it is good because the prices went down but the uncertainty could have been avoided by using the feature earlier.
2b. The user does not book the ticket
Note: If the user chooses to avail of this feature, they would not be able of any discounts/ coupons.
Update: You can avail discounts/ coupons when you are paying the final amount!
Some of the pain points that I encountered using this feature were:
1. No transparency in the advance price determination:
I get a box stating the price. More information regarding how this price was determined. Is it refundable if I cancel it earlier? Can I avail myself of any discounts on top of it? These are some of the add-ons I feel can be useful.
2. Constant pop-ups:
Once you select a flight for a particular date, you get a pop-up for this feature. But now, if you change the date, you again get a popup. And this keeps coming up, every time! For me this was cumbersome, involving an extra click (to close the popup) every time.
Some questions that are still going through my mind:
1. What was the need for such a feature? Any data-driven insights?
2. What are the target groups?
3. How are the prices calculated?
4. Coupon code can not be applied — is it intentional?
5. Is the revenue shared with the airlines?
6. Why is it a website-only feature? ( Edit: It is available in mobile as well)
7. Can this be extended to round-trip flights?
8. Can this be extended to other MMT offerings like hotel bookings?
9. What other businesses can this be applied to?
I would love to hear your thoughts on this. Please feel free to reach out!
