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Fare Forecast - KAYAK.com Buying Advice

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Fare Forecast - KAYAK.com Buying Advice
Fare Forecast - KAYAK.com Buying Advice
Courtesy KAYAK.com

Stock brokers and budget travelers have at least one common question on their lips -- when should I buy?

Like stock prices, airfares rise and fall with little or no notice. Making a fare forecast is difficult, because the price changes frequently make little sense.

Prior to the Internet, most travelers followed this simple advice: if it's a reasonable airfare, book it.

That's still very good advice today. But most of us still want the best price possible for flights.

KAYAK.com is a travel search engine that allows consumers to shop for travel products and then provides links for making final purchases.

Although owned by Priceline.com, it connects with a host of airlines, hotel chains, car rental companies, cruise lines and other travel providers. KAYAK has an easy-to-use feature called Explore which allows travelers to see low fares by destination and compare the costs of alternative airports.

KAYAK Price Forecasts

In January 2013, KAYAK.com launched a feature that attempts to advise airfare shoppers on that all-important buying question as the search unfolds. Along with the results, KAYAK offers a green-colored "buy" indicator, or an orange-colored "wait" advisory. At this writing, the forecasts only come with searches for destinations in the U.S. and U.K.

"Our algorithm incorporates data from multiple faring and availability providers across the over one billion annual queries performed on KAYAK sites and mobile apps," says KAYAK Chief Scientist Giorgos Zacharia in a company blog post about the new fare forecast system. "As we continue to collect data and test the algorithm, the forecast accuracy will continue to improve."

How It Works

Perform an ordinary search on KAYAK between destinations within the U.S. or U.K. Along with the results, the advice to buy or wait will appear in the upper left section of the results page. In the example above, you'll note that the advice is "buy now."

Click on the color-coded advice and you'll see a pop-up window with more information. KAYAK will express a percentage of confidence -- let's say 85% -- that their forecast is valid. The text adds that the "forecast is based on analysis of historical price changes and is not a guarantee of future results." That reads a lot like an investment disclaimer.

If you still want further illumination, you can click on tip explanation and reach a new page with more details about how the forecasts are calculated.

Note that on some routes, no fare forecast is given. When that occurs, it's because KAYAK did not have enough data upon which to form their educated guess.

A Fare Forecast Competitor - Bing

Bing.com travel powers its airfare search with KAYAK. But it has a separate fare forecast system called Bing Price Predictor.

This system has been in place since Bing acquired it from Farecast in 2008. It provides five color-coded shades of prediction, from a bold green for "buy right now" to a bold red for "wait."

Bing will also show you the lows and highs for fares on your chosen route (economy class only) and a percentage of confidence.

Watching Airfares

Another service doesn't predict fares, but tracks them and notifies you when changes take place. Yapta is short for "Your amazing personal travel assistant.

Because many fares naturally rise as the departure date approaches, people who do their searches within a month of the trip are likely to see the "buy now" advice. Many skeptics might also reason that KAYAK wants you to buy now simply to close the deal. Is this merely a sales tool?

It will be difficult for anyone to answer that question objectively. But long term, the survival of this feature will depend largely on the public's experiences. Those who track fares after purchase and get bad advice from the KAYAK fare forecast are not likely to be silent. In the same way, if the forecasts are accurate, there will be similar reactions of support.

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