Book now or wait? Websites offer airfare price predictions

Kayak is now offering travellers advice on when to buy their airline tickets by predicting whether the price for a flight will rise or fall during the next week.

The fare comparison site's new feature provides a recommendation to "book now" if the ticket price is expected to rise in the next week -- or to "wait" if the price could drop.

The new recommendations for travellers are based on calculations about the pricing history from more than a billion queries a year that the online service says it conducts.

"We want (travellers) to get to the best decision for their needs as easily as possible," says Robert Birge, Kayak's chief marketing officer.

Kayak says it developed the forecasts with algorithms and mathematical models that are based on past pricing history from two reservation services, online travel agents, wholesalers and low-cost carriers.

But Kayak can't guarantee the predictions will be correct. So if a traveller clicks on the prediction, the site will have an overlay explaining how confident Kayak is in the prediction. And, the site always tells travellers: "If you see a good price, book it."

Still, Giorgos Zacharia, Kayak's chief scientist says that the feature "provides the most accurate and most comprehensive information."

"It's yet another information tool that we provide our travellers," Zacharia says.

The concept of giving fliers advice on when to buy isn't new to the airfare comparison and booking business.

Norm Rose, president of Travel Technology Consulting, says the concept of price predictions was introduced by Farecast, which Microsoft bought in 2008 and which became the foundation for Bing Travel.

Rose says a key question is whether the predictions are accurate. Another question is whether a traveller has the flexibility to wait before buying a ticket based on the site's advice.

But Rose says Kayak is technically savvy and the predictions are likely based on solid technology. "If consumers try out the service and it is not accurate, it will likely not gain strong adoption," Rose says.

Bing says it analyses millions of fares daily and filters the information for the best deals.

Bing Travel Price Predictor advises travellers whether fares are rising, holding steady or dropping, and whether to "buy" or "wait."

Bing, which launched in 2009, uses billions of price observations to predict patterns in ticket prices, according to spokeswoman Kari Dilloo. Besides price, the site also will connect travellers with Facebook friends and Twitter experts to make suggestions about where to stay and what to do on a trip, she says.

"And since Bing doesn't actually sell travel, our only focus is to connect you with helpful information that can keep you coming back," Dilloo says.

Kayak, however, says its predictions will be more comprehensive because they tap more information than Bing does.

"You need to use your judgment," Kayak's Birge says. "What we want to provide is as much information as possible."