It’s the dilemma anyone planning a holiday abroad will have faced.
Should you book early for the best deal and hope your plans don’t change – or leave it to the last minute in the hope of snapping up a bargain?
Well, according to Japanese economists, we should allstop dithering. To get the most for your money, book exactly eight weeks in advance –and buy your tickets in the afternoon.
The experts, who came up with the solution using the mindboggling mathematical formula ∏A =gUG + min(k – g, (1 – g)(1 – r)), where ∏ apparently equals profit, said:
‘When we book our flight to London weeks ahead we have to account for the possibility of Unforeseen events which make our trip to London impossible.
‘In order to make consumers take their chances, airlines have to offer advance purchase discounts. As a consequence, ticket prices increase as the travel date approaches.’
Booking more than eight weeks ahead may seem like the best option, but it could mean you risk having to pay to alter your booking if your plans change.
However, if you leave it later, there’s an increased risk that prices will go up or the flight could be fully booked.
The discrepancy between the times of day may be to take advantage of business travellers who are less concerned about price, tend to book trips from the office earlier in the day.
Holidaymakers will book at home later on, the economists suggest.
But although the formula from Makoto Watanabe and Marc Moller, published in the latest edition of The Economic Journal, will be invaluable to holidaymakers, it’s not a complete answer to our indecision.
The economists note how differently you must act when booking flights compared to tickets for a West End show.
In theatre, last-minute bargains can often be available on the day of the performance. But then you run the risk it will be sold out.
The report states: ‘The purchase of airline and theatre tickets are both examples where individual demand uncertainty and rationing risks interfere.
‘However, there is empirical evidence which shows that airline ticket prices typically increase overtime while theatre tickets are often sold at a discount on the day.
When we purchase our theatre ticket last minute, there exists the possibility that the event has sold out.
In order to make consumers bear this risk, theatres implement a clearance sale by offering last-minute discounts.’
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