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Can Bing.com’s Farecast Really Predict Future Airfares?

09/22/2009 | Permalink
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Air Travel Crystal Ball: Predicts if airfares will go up or down. Never buy too early or late again. Best of all, it's free.

If you saw this ad on Craigslist, would you be tempted? The managers of Microsoft's Bing.com travel portal hope so, because a digital version of a crystal ball is what they claim to offer.

Microsoft says they gained this capability when they acquired the technology of a website called Farecast.com. They've now added it to the travel portion of their Bing.com search portal. Farecast.com's claim to fame was that it could predict whether a specific travel plan would cost more or less in the future. Bing.com now makes the same claim.

Farecast.com has garnered rave reviews. TIME Magazine named it one of their 50 "coolest" websites. And the Arthur Frommer organization noted it as an "Editor's Choice." Individual reviewers were even more enthusiastic. Expressions like "this site is awesome!" and "pure genius" abounded on review sites and blogs.

The genius label was applied most directly to the way the technology operates ... by using the enormous ability of computer programs to aggregate information and then to detect patterns in the data.

Back-testing to Predict the Future

Farecast computers constantly monitor fares and how they move in major cities. More than 100 billion individual fare decisions have been monitored since the program's origin. Each is analyzed for whether the fare went up or down after the purchase was made.

The patterns discerned are then back-tested by entering a hypothetical booking at a past date. The prediction generated by that booking is then compared to what actually happened to gauge the validity of the pattern applied. A valid pattern translates into a recommendation to buy now or wait for a better price.

How right are the predictions? Microsoft says independent studies show they're on the mark more than 74 percent of the time.

The Seattle Times (Farecast.com was a Seattle startup) ran its own tests, however, and got a different result. "A review of nearly 30 plane trips found an accuracy rate about 61 percent," wrote Seattle Times technology reporter, Kim Peterson. "And the vast majority of the time, Farecast had one piece of advice: buy."

Former Farecast.com executive Mike Fridgen defends the 74 percent accuracy level, saying it was based on a far larger sampling than taken by The Seattle Times. He added, however, that "we're not clairvoyant. We are as transparent as possible with what we're seeing."

Others have noted how difficult it is to predict what airfares will do in the future, even given past results. Factors such as competitive moves, changes in fuel prices, and other factors not present in the past can sway what happens now.

"The airfare economy is very volatile and extremely difficult to predict," observed the website Killerstartups.com. "Farecast has got its work cut out for it."

The Surest Path to the Lowest Price

Of course, the best way to ensure the lowest cost of air travel (right down to free) is to use the airlines' own policies to secure your deal. That's the primary focus of our flagship newsletter, First Class Flyer. It's finding the anomalies, loopholes, and shortcuts that enable readers to upgrade their travel, either free or at tremendously discounted prices.

First Class Flyer, we're proud to say, has been at this for more than a dozen years, and as such, has satisfied tens of thousands of subscribers. It's also received highly favorable notice in top media outlets, including The New York Times, Wall Street Journal, CNN, USA Today, and Conde Nast Traveler. That's the reason its founder and publisher, Matthew J. Bennett, has earned the nickname, "Mr. Upgrade."

Matt has asked us to invite you to try First Class Flyer on a no-risk basis. The cost is reasonable (it pays for itself with the savings from one discounted ticket purchase) and your credit card won't be charged for 14 days while you try it out. Plus, your trial subscription includes 11 free Special Reports on getting the most from your award cards, frequent flyer programs, and much more. Keep these 11 free Special Reports even if you choose not to continue the newsletter.

For more insider tips and strategies on how to make your travels more comfortable and productive, visit the Wing Tips archives page.

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