5 Questions with Mike Fridgen, VP Marketing & Product at Farecast
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Written By Reprise Media | August 16, 2006 | Share This
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We didn’t plan it this way, but this week it’s shaping up to be a 5Q’s bonanza ’round here. Today’s installment is a chat with Mike Fridgen of Farecast, a site that makes predictions about airline fares based on past trends and advises you whether to buy immediately or hold out for a markdown. Right now it’s in beta, serving the Seattle and Boston markets (we made sure to ask when we’re likely to see adoption nationwide).
1. We’ve certainly been burned by waiting a day or two too long to book a flight, only to have the cost go up by an obscene amount. How often and how much do ticket prices typically fluctuate? Does it differ by destination? What interesting or surprising trends have you found in cost patterns over the past three years?
Farecast has found that there are many factors that play into airline ticket price fluctuations. And in fact, our predictive technology looks at over a hundred price attributes when forecasting if fares are rising or dropping for a specific trip. But to keep things simple, here’s a look at how a few intuitive conditions impact price:
How far in advance you buy. If you are searching outside of 21 days to departure, prices tend to stay within a predictable range. Inside of 21 days to departure, prices become much more volatile, while generally trending up. This is where you are going to get the big price increases that frustrate travelers.
Where you are traveling. Generally, short-haul business markets (i.e., Seattle to San Francisco) tend to be more stable than trans-continental markets (i.e., Seattle to New York).
Trip type - business, leisure, or holiday trips. Another interesting finding is that we don’t generally see much of a difference in the pricing patterns for typical leisure and business trips (i.e., with and without a Saturday night stay). This also holds true for holiday trips. Although business and holiday trips are generally more expensive, airlines change the prices of these different trip types in the same way.
2. Some have questioned whether it’s possible to predict future airline fares with much accuracy, but with a number of former airline people on staff, Farecast has credible expertise to help quiet such doubts. Still, is Farecast right more often than it’s wrong? Either way, is that ratio improving?
We do have a pretty unique mix of skill sets here at Farecast. Our founder, Oren Etzioni is a serial entrepreneur, recognized internet search expert and Professor at the Computer Science Department at the University of Washington. He helped to recruit a team of PhDs that, over three years, have developed a complex set of algorithms that predict if fares are rising or dropping. As you mentioned, we also have folks with airline and online travel experience with companies such as Alaska Airlines, Expedia, Yahoo Travel and Priceline.
To your question on how often Farecast is right. When looking across all airfare predictions in all markets, Farecast has on average around a 75% accuracy level. (By the way, you will see our historical accuracy for a specific airfare prediction displayed on the website in the form of a confidence percentage.) And, yes, the percentage of the time we are right continues to improve.
3. What’s your long-term vision for Farecast? Stand alone or part of a larger biz? Ad-supported, or subscription based? We know some analysts are predicting that travel start-ups will get swallowed up by bigger players.
Right now, we are all about empowering people with better information to make more confident and smarter airfare purchase decisions. With our current website experience, we are answering questions such as: should I buy now or wait for this specific trip? We also provide trip planning tools that help answer questions like: where and when should you travel? Over time, we will look at new markets, other travel categories, new predictive innovations, etc.
My hope would be to partner with larger brands and build our consumer brand at the same time. Sure, we will be ad-supported and plan to generate revenue from supplier referral fees as well. We also have unique opportunities with our predictive technology (more details to come).
4. There’s language on the Farecast website explicitly stating that you’re “pro-airline.” Are you getting flack from the airlines, or are most of them playing nice?
Farecast is “pro-airline.” We know and want more people to realize, the best place to book airline tickets is at the airlines’ websites. When people book direct they avoid booking fees, get free bonus miles, and are guaranteed the lowest fares. In addition, airline websites offer email reminders about great services like web check-in.
Now of course, many people like to see all the options in one site, and that’s where we come in. Farecast.com shows you all the flight options for your specific trip and an easy interface to find the right flight and click through to the airline website for booking. Early on, we made the decision to offer a search vs. agency-like shopping experience because we believed it was the right thing to do for customers.
I would say on the whole that airlines are reacting quite positively to Farecast. In fact, we have content agreements in place with multiple airlines that give us access to their lowest fares.
5. If we slip you a $20, can you get New York listed any faster? (No, seriously… what are the most requested cities, and what’s your timeframe for adding new destinations?)
Our stated timeline for getting out to the rest of the country is by the end of the year. By far our number one request from users has been to add cities. So, we created an “add my city” link in the header and I posted about how we decided which cities to add on the Farecast blog. Looking at our analytics, the top five cities visiting Farecast (excluding Seattle and Boston) in the month of July were New York, San Francisco, Los Angeles, Chicago, and Washington D.C. You can bet that airports surrounding these cities and their major destinations are at the top of our list.
Mike Fridgen is currently the VP Marketing & Product at Farecast and is a strategic advisor to TripHub. In addition to having held executive positions with multiple venture backed travel start-up companies, Mike has spent time at Expedia, NLG, and Alaska Airlines in various roles. He also covers emerging travel companies in his travelstartups blog.
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