Seattle based airfare prediction service Farecast is testing what the company calls its first retail product beyond basic price forecasts; the company is now offering to lock in ticket prices against an increase for one week for $1. When the testing period for the product, called Fare Guard, has ended the price will become $10. See details below to test out this product.
Farecast uses millions of observations of past airfare prices to predict whether a ticket price between two cities for a particular date is expected to decline or increase in price over the next seven days. If the price is expected to go up, then Farecast recommends that you buy your ticket now. If it is expected to go down, then the service recommends that you wait for a lower price. The company currently offers predictions for flights originating in 75 US cities.
The company says that it is correct in its predictions about 70 to 75% of the time. If Farecast tells you a ticket’s price is going to drop and recommends that you wait, you can pay the Fare Guard fee to lock in access to the lowest price of that day for the next week. If you have purchased Fare Guard and the price instead goes up, Farecast will send you the difference between what you ended up having to pay and the price you locked in with them. If Farecast’s prediction was correct and the price does drop, you can buy the ticket at the lower price and they make $10 from the Fare Guard service.
This is just the first of several value added products the company says it hopes to offer as revenue generation beyond lead generation and contextual advertising. To test out the Fare Guard product, follow this link and login as username “techcrunch” password “fareguardtest.” See also our previous coverage of Farecast.
Will Fare Guard be a success with consumers? It may be a little difficult to explain clearly, particularly given that it’s only one way movement that will be guarded against. If Farecast predicts that a ticket price is going to go up, so I buy at the current price, and in fact the price goes down – Fare Guard does not offer to compensate me for the money I could have saved if I had ignored Farecast’s recommendation. That, according to the company, would be yet another product and this current one needs to be tested first. The current product will probably be much easier for users to understand than it is to explain in the abstract, sometimes you’ll be offered Fair Guard protection and sometimes you won’t. It’s fascinating to see what kinds of value added “products” can be placed on top of data mining.
Not sure exactly why this is considered news on diff
I love farecast, and have been using it since you guys wrote about it first. Very easy to use.
This is fantastic! $10 is a small price to pay for that kind of assurance. I’ve also been using farecast since you first wrote about it and have found it to be a very well-designed, useful site.
This is definitely a unique service being offered by Farecast. However, do you really think that the mainstream audience will get what Farecast is doing and switch from Expedia?
When I think of a new travel service, I need something that is going to make me switch from my existing service like Expedia to Farecast. I think the $10 figure is considered a tipping point in the travel industry for a consumer to switch from one airfare to another. But the challenge is that Farecast needs to get its message across in a simpler way that the mainstream consumers can quickly get.
Good luck!
Another farecast user after seeing it here this summer. It’s great not only for predictions, but for filtering for prices too. I find it better than other travel sites for filtering.
love farecast, very cool feature, nice way for them to make a few bucks and backup their prediction model.
It is amazing that this seems to be a composite product formed from fusion of Insurance with Options. I wonder if the SEC will allow this in the long run.
Fare Guard sounds too much like stock option. I think it will be hard for consumer looking for air ticket to understand.
On the other hand, since it predicts the price will go down, that means customers can buy a ticket at a price lower than anybody else can offer on that day. Perhaps they can repackage themselves as a cheap ticket agent. That surely sells.
How would Fare Guard compensate customers if the price not only goes up but tickets are actually sold out?
I love this idea. My wife is from Alaska so we fly there around once a year, and choosing when to buy a ticket and which one is a hassle.
Nice feature on top of a nice service. Key will be keeping it simple enough for masses to understand. Keep up the good work.
Will it work for international flights or just domestic?
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