Developments in dynamic tracking of airfares and room rates mean buyers can make the most of price volatility...
AIR FARES ARE LIKE A HEART MONITOR. There are various peaks and troughs fluctuating between the date they are announced and actual take-off.
Today, these fluctuations are becoming more erratic. In the past, countless blogs would attempt to predict the best day of the week to buy your ticket, but advances in yield management, combined with legacy carriers’ unbundling moves and the growing number of no-frills carriers have put paid to this practice.
Step forward fare-tracking tools. For the leisure market, the likes of Skyscanner and Kayak have been offering fare alerts for several years, but technology start-ups are only now targeting the corporate sector.
They come armed with alarming stats. Fairfly – one of BBT’s 2017 ‘ones to watch’ – claims its data shows flight prices are so volatile that they change an average of 92 times over their lifetime.
Meanwhile, Hopper – an app that uses ‘big data’ to predict and analyse air fares – claims that more than two out of three ticket prices will drop at some point within 24 hours of the original search or booking, with an average saving of 14 per cent.
Kayak – which offers a price forecast tool – goes further. Suzanne Perry, travel expert at Kayak, says new research has revealed that prices can be up to 80 per cent cheaper.
Recent technological advancements, most notably in automation, are paving the way for companies to help TMCs save billions of pounds by using tracking.
When plugged into a TMC, innovative start-up Fairfly will automatically rebook flights that have dropped in price. “We recognised automation is the best way. It’s taking the heavy lifting away from the customers, and closing the loop,” says CEO Aviel Siman-Tov.
“We all know there are large fluctuations, [but] no one can predict when it’s going to happen – every ticket has a different story,” he says. Price variation today is due to many factors, which is considered a plus. “The more complex it will be, the more our algorithms can do the magic,” he says.
Siman-Tov says Fairfly works with Sabre and Galileo, and is in talks with Amadeus. “We will be GDS agnostic in a few months,” he notes, adding it is also working with travel management company BTD, with more TMCs in the pipeline.
Within the hotel sector, Tripbam has been applying the same principle for a few years now, with customers split between TMCs – including HRG, CWT and more recently BTD – and corporates.
Founder Steve Reynolds argues rates have in reality been changing for decades. “The challenge back then was acceptance,” he says. “It was difficult to get people to pay attention to a different rate, and there was no email.” His company launched in 2013, targeting consumers, but after a year it pivoted into corporate travel, which now makes up 95 per cent of its business. “Individuals tend to be more reactive, as in ‘it’s my money, I care’; with corporates, you have to word things to get their attention.”
Tripbam monitors hotel room rates, and rebooks when prices drop. Its patented a “cluster” approach where similar rooms located nearby will be monitored, too. It has also partnered with Fairfly for certain clients, with the latter also now offering a tool where the prices of similar routes, rather than a single route, can be tracked and automatically booked if necessary,
One concern to constant tracking is the burden frequent price requests can place on the GDS. However, new generation fare-tracking tools are starting to create a profile of fares to look for, based on historical data – so lowering the request ratio.
Another question, perhaps, is why now? The consensus is that advancements in big data have only just allowed for this type of technology to be developed. Fairfly, for example, spent a year developing its system. So why don’t airlines do it themselves? “That’s a question we should ask airlines,” replies Siman-Tov.
As for airlines offering refunds themselves, he believes even if one airline solves this issue, it does not solve the problem. “If you don’t find a solution globally, across the board, it’s not relevant. Fairfly is already taking action, in real-time.”
Meanwhile, OTAs and metasearch sites appear to be taking more of an interest. At Skyscanner, content manager Sam Baldwin says the company is looking to “disrupt” the TMC sector. It has a corporate booking tool – Travelpro – that is currently in beta, being used by staff and clients including online food ordering company Deliveroo.
Baldwin says: “We are looking to partner with SMEs and technology companies... Corporate travel is [also] definitely an area where we think we can disrupt.”
It also has well established relationships with airlines, and already offers them a travel insight tool providing access to user behaviour. Its own ‘price alerts’ tracking tool is now six years old, and while the consumer product does not rebook fares after a price drop, Baldwin says “never say never”.
Skyscanner has 50 million users a month, and last year was acquired by China’s Ctrip for £1.4 billion.
Meanwhile at Hopper, chief data scientist Patrick Surry says his company has been asked to offer an automated booking solution. “Hopper will sell you the ticket, but we are being asked for a ‘limit order’ function - for example, if the fare goes below a certain threshold.”
Hopper itself spun out of Expedia, and since launching in 2015 has been downloaded more than 12 million times. It receives from its GDS partners real-time “shadow traffic” containing the results of consumer air fare searches. It can collect 5 to 8 billion price quotes every day, it claims, and has built a historical archive of several trillion prices from over the past several years. It includes flight options from 250 airlines worldwide, and is now targeting the UK and more European carriers.
It’s more proof of the power of big data, and a technology that should set the pulses of travel buyers racing.
AS WELL AS FARE TRACKING, other variables can also be plugged into systems. For hotel rate-tracking tool Tripbam, ‘traveller sentiment’ can now be factored in. It has partnered with Munich-based review website Trust You. While a travel buyer or TMC may stipulate three-star hotels only, the system can ensure only those with high ratings can be valid, tracked or rebooked accordingly.