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Do I book at exactly the right time? Airfare forecast accuracy across three price-prediction platforms

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  • Tenghui Huang

    (University of Delaware)

  • Chih-Chien Chen

    (University of Nevada)

  • Zvi Schwartz

    (University of Delaware)

Abstract

Customers are uncertain about the best time to get the lowest airfares due to the practice of dynamic pricing in revenue management. Even with the help of price-prediction platforms, the optimal time to buy the lowest-priced airfare remains unclear. This study compares airfare forecasts across the prediction outcomes suggested by Hopper, KAYAK, and FareHack. The data were recorded daily over a 77-day period, focusing on ten one-way route airfares during this time. The results show that, despite the importance of accurate forecasting, there is no best website for the optimal recommendation—prediction accuracy varies based on the number of days before the departure date.

Suggested Citation

  • Tenghui Huang & Chih-Chien Chen & Zvi Schwartz, 2019. "Do I book at exactly the right time? Airfare forecast accuracy across three price-prediction platforms," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(4), pages 281-290, August.
    • Handle: RePEc:pal:jorapm:v:18:y:2019:i:4:d:10.1057_s41272-019-00193-7
    DOI: 10.1057/s41272-019-00193-7
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    References listed on IDEAS

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    1. Claudio A. Piga & Enrico Bachis, 2006. "Pricing strategies by European traditional and low cost airlines. Or, when is it the best time to book on line?," Discussion Paper Series 2006_14, Department of Economics, Loughborough University, revised Jul 2006.
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    2. Erdmann, Anett & Ponzoa, José M., 2021. "Digital inbound marketing: Measuring the economic performance of grocery e-commerce in Europe and the USA," Technological Forecasting and Social Change, Elsevier, vol. 162(C).

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