In considering the fare forecasts made through KAYAK.com, the attempt is made to answer a key question.
Stock brokers and budget travelers have it 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. Few want to buy if prices are falling. We want to wait until the cost hits rock-bottom.
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 the Priceline group, 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.
It's an online tool that has been used millions of times. So when KAYAK taps into its own data and begins to draw conclusions about when to buy tickets or where prices are likely to go, a budget traveler should pay attention. Their findings won't be flawless, but they are based upon much experience in the marketplace.
Travelers have made more than one billion search queries on various KAYAK sites.
KAYAK Price Forecasts
Several years ago, KAYAK.com launched a feature called Explore that attempts to advise airfare shoppers on that all-important buying question as the search unfolds.
"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. 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 degree of confidence that their forecast is valid. Here's a "buy" message that appears in one pop-up window: "Our data scientists think these are the best prices you'll see for the next seven days. Like weather forecasters, though, they can't be 100 percent certain. Their confidence rating, shown above, is based on an analysis of current and past prices."
Another buy message might be price-specific: "our model strongly indicates that fares will rise more than $20 during the next 7 days." 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.
Searches for flights that are less than one month away are quite likely to get the "buy now" advice.
As your lead time increases, you'll see more "wait" messages, which are printed in blue with a downward-pointing arrow. You'll be advised prices are likely to drop in the next seven days.
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.
KAYAK also allows you to set up a fare alert for your chosen route with a single click.
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."
As noted above, 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 transactions. 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 likely to vocalize complaints. In the same way, if the forecasts are accurate, there will be similar reactions of support.