Forecast starts offering unusual insurance on air fares
Forecast started the unusual practice of offering one-week air fare guarantees. The cost: $10.
The company’s Fare Guard is a service that guarantees that an air fare listed on the site will remain valid for a week or Farecast will make up the difference, said The New York Times.
“The hitch is that customers are subsidizing that promise with a fee of $10 a ticket — essentially making the service an insurance program,” wrote the newspaper.
But analysts said that many consumers could embrace this apparently novel idea, since it helps take much of the risk out of a transaction that is notoriously rife with price volatility.
“You’ve got to give them credit,” said Henry H. Harteveldt, an online travel analyst. “To my knowledge there’s nobody else out there offering you an insurance policy for airfare.”
With Fare Guard, users search for airfares as they would on most other travel sites. But alongside the fare results, Farecast displays a graphic showing the likelihood that each fare will increase in the coming week.
Farecast will offer the Fare Guard service only on about half of the fares it displays.
Mr Harteveldt told the Times the service introduces a new element to the airline ticket category on the Web, which is slowing considerably compared with 2004, when bookings increased by 22%
Last year’s online air bookings reached about $44 billion, or 14% more than 2005, and Forrester predicts the market will grow by about 11% annually over the next three years.
Report by David Wilkening
David
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