Uggg...
The dreaded “SDC” – Second Day of Conference. Actually – for Phocuswright, it was actually the "Dreaded Third Day" because they had some other lame pre-Phocuswright session that many people also went to.
The highlight for FMV was the FareCast session where Hugh Crean presented some interesting facts and characteristics:
* Farecast has 5 different suggestions for customers when they look at fares, and it turns out that they will recommend that a customer “Buy” their flight 85% of the time...
* Although customers can search Orbitz, Travelocity, Hotwire, Expedia and other Online Travel Agents – FareCast still sends a customer to an airline website 85% of the time. Honestly – we really can’t understand that those other 15% of the people are doing – unless it’s some sort of multi-carrier flight.
* It turns out that FareCast is correct in their prediction approximately 75% of the time, citing an audit that sampled 44,000 quotes.
Question: Is 75% accuracy good? Especially given the fact that you would predict a Buy 85% of the time. Fares going up is the default - therefore FMV things the REAL guage of accuracy is what percentage of the time can you predict that the airfare will go DOWN.
Hugh repeatedly says that Farecast is data-driven, not marketing driven. FMV likes that they are pretty much trying to tackle the most relevant problem of the traveler “when should I buy a ticket?”. However, what would be the difference if you had a site that just said “buy” every time?
2 comments:
It's just not Novemeber without PhoCusWright. Thanks for sharing what happened, since I no longer get to go.
Interesting that 85% of the time they tell people to buy. I suppose that makes sense, because they only review flights within 90 days. During that window, you would expect that fares would go up more often than not. Of course, these guys can't predict if an e-saver is going to pop up, so it doesn't take that into account.
It also shows that their $10 guarantee (if they still have it), won't actually cost them much. The idea, IIRC, is that if they tell you to wait, they'll guarantee the existing price for a week if you pay them $10. If only 15% of the people searching can buy it, that limits their exposure dramatically.
I'd be interested to see what percent of the time they're right when they tell the shopper to wait. That would really show us their exposure, but I don't imagine they'll share that with us.
I would say that 75% is not bad, but it confirms what I've always found to be true - you just can't predict airline pricing very well.
BTW, I wouldn't be surprised by the 15% of people buying through OTAs. I bet they have plenty of itineraries that are either multi-carrier (as you say) or don't offer the airline website as an option. Besides, now with Priceline's no booking fees and diminishing mileage bonuses on airline sites, the reasons for going to the airline sites are disappearing.
Farecast is an interesting service, but there are limitations.
One limitation which is not immediately obvious is that Farecast does not cover all airlines. For example, you will not find any fares there from Southwest, Allegiant or Skybus. Additionally, sometimes the airlines offer special deals only on their own websites which never make it into the database which Farecase uses.
I personally have found that a much more useful site is Airfarewatchdog.com. These guys search thousands of fares by hand every day to come up with the best possible deals. They cover all of the discount carriers as well as specials listed only on airline websites. Plus you can sign up for a daily newsletter which let's you know about the best fares from your city.
Worth checking out...
Mike Martin
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