Blind booking: The effects on passengers' purchase decision, airlines’ profitability, and tourist destinations

Juana M. Alonso and M. Pilar Socorro

Research in Transportation Economics, 2024, vol. 105, issue C

Abstract: Blind booking consists of selling cheap surprise trips with a set of possible destinations, but without revealing the real destination until the payment is made. In this paper, we develop an economic model to analyse the social and private optimality of this pricing strategy in the airline industry. We perceive opaque products as a pricing strategy managed directly by airlines (without intermediaries) and simultaneously applied with other pricing strategies. Blind booking allows airlines to sell all their seats while maximising revenues and charging different prices in two parallel and independent markets: the transparent and the opaque market. Considering consumers’ risk attitude, airlines must optimally choose the number of seats of each destination to be sold in each market in order to maximise their profits and create an attractive blind product. Our findings suggest that, in general, selling tickets in both markets is optimal for airlines. We show that, even when it is not optimal, it may enhance social welfare. Thus, policymakers, especially those of low-demanded destinations, should encourage airlines to introduce blind tickets. In these destinations, blind tickets imply an additional source of demand, attracting new customers and generating positive economic impacts.

Keywords: Blind booking; Opaque products; Risk attitude; Pricing; Air transport; Tourist destination; Social welfare; Economic impact (search for similar items in EconPapers)
JEL-codes: D21 D81 I31 L93 L98 Z30 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0739885924000398
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:retrec:v:105:y:2024:i:c:s0739885924000398

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_2&version=01

DOI: 10.1016/j.retrec.2024.101444

Access Statistics for this article

Research in Transportation Economics is currently edited by M. Dresner

More articles in Research in Transportation Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().