Attempting to cash in on the capricious rise and fall of airfares is like trying to handicap a horse race or time the stock market: an exercise in frustration. But by analyzing historical pricing data, a new breed of travel websites promises to help consumers decide whether to click now or hold tight and hope for a better deal later.
Seattle-based newcomer Farecast.com uses fare data, seasonal trends and other factors to predict whether prices will rise, fall or hold steady on flights from 75 U.S. airports.
On Monday, the company will roll out a service that gives money back to some purchasers if Farecast's advice to wait because fares are dropping or staying the same turns out to be wrong.
"We're not clairvoyant," says CEO Hugh Crean, who says predictions have been accurate between 70% and 75% of the time. (A Seattle Times survey last fall pegged its accuracy rate closer to 61%.)
But by letting customers lock in the cheapest fare for one week, "we're putting our money where our mouth is."
How it works: You do a search between, say, Chicago and Miami for specific dates in March. If Farecast thinks the lowest fare of $300 will go down or hold steady, you can buy a Fare Guard (for $3 now, going up to $9.95 Feb. 1) that's good for a week and guarantees $300 is the most you will pay, assuming you're willing to take the cheapest flight offered. You'll get a daily e-mail that tracks fares for your trip. If the $300 fare drops, you saved money. If it rises, buy through Farecast, and it will pay the difference between the old and new lowest fares.
Another site, Farecompare.com, tackles the buy or hold question with a two-year history of fare changes for 77,000 North American and 200,000 international city pairs, rating the current best fare one to four stars. Four stars means the fare is at or near the historical low for that route.
Meanwhile, Hotwire.com just introduced TripStarter, a feature that shows two-year seasonal pricing trends for hotel rates in 80 destinations and for airfares in 5,000 U.S. and international city pairs.
Skeptics say the chaotic, complex nature of airfare pricing and inventory control means the sites will have a tough time beating airlines at their own game.
"There are so many variables. If a new airline enters a market, all bets are off," says Bob Cowen of InternetTravelTips.com. Using past data to shape current decisions "is like driving a car while looking in the rearview mirror."
See for yourself: Pros, cons of sites
With an estimated 40% of airline tickets sold online last year and a prediction by industry consultants PhoCusWright that more than half of all travel purchases will be made via the Web in 2007, more travelers are turning to sites that crunch historical data to ease buyer's remorse. (Most of these sites don't sell tickets, but they link to airline sites and online agencies for booking.) USA TODAY's Laura Bly looks at some major players:
Site Pros Cons
Farecast.com Uses historical airfare data and "predictive technology" to forecast fares on most domestic routes over the next seven days. Color-coded arrows show where prices are headed, with how much confidence Farecast has in the predictions. Flexible searches let you compare fares for flights departing within a 30-day range. Since it advises "buy now" 80% of the time, new Fare Guard (available when Farecast predicts prices will drop or hold) could have limited appeal. Like others, the site doesn't display prices for Southwest, though it does give schedules and considers Southwest in fare predictions.
Farecompare.com Live fare updates multiple times a day; fare-trend graph shows whether the lowest prices have been increasing, decreasing or holding steady. Good tips on how to nab the best deals; separate tool searches for "Y-up" or "Q-up" fare codes that let you buy a first-class ticket for as little as an unrestricted coach fare. Though scheduled for an overhaul soon, current site is confusing and cumbersome; displayed fares don't include taxes and fees.
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