By: John Rauser - Farecast Fareologist
Every morning I review the day’s price activity in a display where price increases show up red, and price decreases show up as green. Today I awoke to this:
That is a lot of red, far more than we see on a typical day. That image shows just a small piece of the US domestic travel market, and every one of those little red spots is a price increase, darker red means a bigger increase. The green band on the top is a sale United launched between Los Angles and Atlanta.
Summarizing, prices for travel after September 1 have increased from $15 to over $150 for a wide range of cities. These price increases bring us back in line with 2006 prices, ending the period over the last couple of weeks where fares were tracking 10% lower than last year. The good news is that our models are predicting that many of these price increases will reverse, dipping back down on at least one of the next seven days.
What does this mean for the average traveler? Well, suppose you live in Philadelphia and have to book a ticket for a friend’s wedding in Atlanta. If you search right now, you’ll find that the lowest price is $322. If you search somewhere other than Farecast, the $322 price is probably all you’ll get. If you’re lucky, you might have a friend who flies to Atlanta often, and watches airfares like a hawk. She might tell you that Atlanta is an AirTran hub, and AirTran typically runs fare sales that last for a week or two. When an AirTran sale ends, prices go up for a week or two, before they launch another deep sale. She’d tell you that this pattern has been quite consistent for many months.
If you’re not lucky and don’t have a friend who is an airfare expert, you can be smart, and use Farecast. If you ran your Philadelphia to Atlanta search on Farecast, you’d see this:
The graph shows you the price history for your trip. Knowing that prices bounce around from time to time, and that prices were recently significantly lower might make you inclined to delay your purchase for a little while. Our prediction confirms your intuition. Our models have seen AirTran’s periodic sales and can tell you to wait. The odds are pretty good that the price will drop on at least one of the next seven days.
In essence, Farecast is your expert friend for about 2,000 city combinations across the US. We price well over a million trips every day, and build sophisticated predictive models using that data. As our CEO says, “We’re not clairvoyant,” but an audit has found our accuracy to be 74.5%. So use Farecast and “Know When To Buy.” It’s better to be smart than lucky.