Company aims to ease turbulent fare search
Even though airline passengers have been scouring the web for cheap deals for decades now, finding the best deal is still unpredictable. Passengers are always wondering if the person sitting next to them paid much less for their trip.
Prices fluctuate wildly as airlines try to squeeze the most revenue from every seat. This system, known as dynamic pricing, means the fare for the same economy seat will change depending on demand. If more people want a particular route on a specific day at a specific time, the seat will cost more. If demand begins to weaken, prices could fall.
Enter Hopper, based in Montreal and Boston, which collects billions of data points to try to determine the best fare on a certain route, the cheapest times to fly and even the best days to buy.
“It is still a completely unpredictable process. The average consumer looks at this arcane thing, prices are changing all the time. Everybody feels when we bought something, we still got a bad deal,” said Hopper president Frederic Lalonde.
Funded with capital financing from OMERS Ventures, Brightspark and Accomplice, Hopper aims to take the guesswork out of fare pricing.
“We started collecting flight data that had never been assembled. It took five years to build this technology,” Lalonde said.
Consumers usually take about two weeks going on various websites or apps to look at fares, but they end up paying about 5 per cent more on average than if they bought the first thing they saw, Lalonde said.
“That’s because we do it sporadically at certain times of day,” he said. “We looked at this problem and said there has to be a way to solve this.
“What we do is we advise you to make the right decision, which might be not to buy something,” Lalonde said, adding it can sometimes be smarter to wait before you buy a ticket, depending on the route.
“Every market is different,” said Lalonde, adding that prices can go up or down by between 5 per cent to 20 per cent day by day, seat by seat.
He boasts about a mistake that Qantas made this summer, when it offered round-trip flights between Australian cities and Los Angeles for less than $500 (U.S.). “We found it and sent tens of thousands to the site,” he said. “We found it faster than the airline. That is an extreme example.”
Hopper has launched the ability to buy on mobile devices that use iOS and Android. Right now, even though many people will search for fares on their smartphones, when it comes time to make the purchase, they usually still go to their desktop because of all the information that needs to be inputted.
“It’s all about speed and efficiency. When you see the price, which may only be available for a few minutes, you need to click buy,” said Lalonde, “all while waiting for the bus.”