The Cost of Search

As someone who majored in Economics in college (or at least that is how my Chapman College Bachelor's degree reads although I have to confess that toward the end I was taking more religion and poli-sci classes than economics), I know the "cost of search" is a very real part of any equation for value, even if someone like my sister would claim that digging through sale racks for the occasional perfect outfit or pair of shoes that she might wear someday is entertaining as well as cost-saving.

Economically, "search" is not considered fun but time-consuming, frustrating and problematic.   That's why a dress at Nordstrom's is worth more than the same dress at Ross Dress For Less. 

Obviously, if you drive to Seattle to get a good deal on fish at Pike's Marketplace, then the cost of taking a few days off work, gasing up the Corvette and buying food and lodging en route would eat up any marginally insignificant price difference between buying that "bargain," which by the time you return home and cook is no longer fresh, and just going to Fleming's to order the fresh catch prepared by a gourmet chef.

That trip to Seattle might be fun, but from an economic standpoint, it would be considered the price of search, and a more thorough search might have taken you in a private jet to Juneau or Boston, which would have made it even costlier.

In the internet age, however, it is easy to flip through sites and search prices.  I even see people at Best Buy scanning camera prices with an iPhone and, after thoroughly examining the real thing at Best Buy, which had to pay rent for the storefront, interest on their flooring of merchandise and for hiring and training experts to help their customers, go home and order the "same" product online to save sales tax or some other marginally insignificant amount compared to how much Best Buy saved this person in their cost of search.  After all, if the internet really had all the answers, why did they want to go to Best Buy and actually hold the camera in their hands?  I predict this sounds the death knell for many stores shoppers enjoy visiting.

I would be a fool to believe this doesn't happen in the world of cruises.  I help clients find exactly the right product for them, most often narrowing it down to two or three excellent choices of which I know one is clearly superior, and make a professional presentation of the benefits of each. In order to give an accurate price, I have made it my policy to option rooms on behalf of my clients, so that if they come back to me in two days, I still have the room they wanted at the price I quoted.  Most other reputable agencies follow the same policy.

Recently, however, I have been forced to re-think my process.  A few weeks ago, a potential client phoned me to ask pricing, and knowing that Royal Caribbean would hold a cruise sale that would give them $100 onboard credit if they waited three days, I gave them the choice between gambling that the price wouldn't change to get the onboard credit or locking the room right then.  I didn't hold a room for them at that time, as I knew under new strict promotion rules that Royal Caribbean might consider that to be "cancelled and re-booked," which would not allow the onboard credit.  They chose the former, as I probably would have myself, and all went well, I thought, in that the price didn't change in the interim and they benefited by the half priced deposit under the promotion.

Fast forward to yesterday, when that client phoned me to add transfers to their cruise which leaves in about a month and as an aside asked about the onboard credit, which they had the impression might be even higher based on some ad they had seen.  Royal Caribbean, however, shocked me by saying there was no onboard credit because the clients did not qualify for the credit due to having cancelled through another travel agency before booking with me.

In fact, my clients had not cancelled with another travel agency, but they had checked a different travel agency for pricing, trying to be thorough in their search for the best deal.  Because I happened to have a group on that same cruise with $50 onboard credit, Royal Caribbean generously allowed my clients to have that, as if they were in that now "closed" group, but the cost of search reared its ugly head in a way I haven't seen before, as $50 lost onboard credit (which should have been $100).

All of the cruise lines have strict policies against presenting prices or rebates that vary from their official prices, with substantial penalties for violation.  A good agent can go through the cruise line promotions and find better deals for past guests, seniors, residents of specific states or some other categories, but we aren't supposed to wing it, because the cruise lines understand that makes decision making harder for the consumer, who will bog down the system doing a "thorough" search of travel agencies that results in the ship appearing to have more sold rooms than it does, since most couples don't require more than one room on any given trip.

Add the special one day promotions into the mix, along with the prohibition to cancel and re-book, when in fact cancelling only means that you checked the price, and you can see that the cost of search expands into twilight zone dimensions.  If you want to work with a travel agent like me and benefit from our insider experince and knowledge, please do, but do us all a favor and just work with one.  The cost of search is higher than you think, and now it comes with backfire costs.