This is going to fuck itself up. The predictions are based on what has happened before this information was made easily available. Making it easily available will change booking habits, and thus the prices on offer at different times. Especially as the airlines can (try to) anticipate an avalanche of bookings at particular timepoints and so know that they won't necessarily need to lower prices to fill the flights.
It will be interesting to see how this pans out.
Hopefully it does fuck itself up. Enough for airlines to abandon algorithmic pricing rather than try to outsmart Google
thats how it will pan out: google is just adding an extra step to flight booking: making it booking with extra steps.
Fortunately, most travel (in the US) is tied to school schedules and I don’t think this will impact those travel patterns or routes. Perhaps shorter weekend trips will see some changes though but I think most people have a decent sense of good prices vs bad even without this type of enhancement from google flights.
It's not about when they fly, it's about when they book the tickets.
It’ll be like when everyone started using Google maps and now they just drive 40 mph through the neighborhoods instead of waiting an extra minute on a major road.
But there are times where many people really want or don't want to travel to an specific location because of the weather, events, etc. There is a natural higher demand for some dates, i.e. Christmas, etc., while others have lower demand, i.e., summer in some places.
I suspect people that travel without time constrains will be most benefited, ofc, but don't underestimate the number of people who travel with time constraints.
This isn't about when they travel. It's about when they book the flights.
Google has an advantage, though, because they bought ITA several years ago, which runs the main database that several major carriers use to schedule flights. Their data is not limited to Google searches, they have all the historical pricing in their database for every possible flight.
That does not make any difference. The act of making the information available changes what will happen in the future. The past becomes a very bad guide.
It's the same sort of thing as with high frequency trading. Quants find a way to profit off particular market movements and in doing so, change the way the market moves. They have to keep updating their models to stay ahead. The difference for Google and flight prices is they don't get new information every microsecond, they can only update on an annual cycle. I don't see how they can possibly make a good job of it.
Airline ticket prices do resemble futures or options contracts a bit, though, in that they have a relationship to a certain date, and once past that date they are worthless. Furthermore, futures contracts on commodities (like FCOJ, right, Winthorpe?) are also subject to catastrophic yearly weather events that can wipe out a whole crop.
I think its naive to assume the Quants can't model airline prices given the massive amount of historical data ITA and Google have.
They can model the airline prices.
What they can't do is predict how they will change in response to customers having the data now.
This is going to fuck itself up. The predictions are based on what has happened before this information was made easily available. Making it easily available will change booking habits, and thus the prices on offer at different times. Especially as the airlines can (try to) anticipate an avalanche of bookings at particular timepoints and so know that they won't necessarily need to lower prices to fill the flights.
It will be interesting to see how this pans out.
Hopefully it does fuck itself up. Enough for airlines to abandon algorithmic pricing rather than try to outsmart Google
thats how it will pan out: google is just adding an extra step to flight booking: making it booking with extra steps.
Fortunately, most travel (in the US) is tied to school schedules and I don’t think this will impact those travel patterns or routes. Perhaps shorter weekend trips will see some changes though but I think most people have a decent sense of good prices vs bad even without this type of enhancement from google flights.
It's not about when they fly, it's about when they book the tickets.
It’ll be like when everyone started using Google maps and now they just drive 40 mph through the neighborhoods instead of waiting an extra minute on a major road.
But there are times where many people really want or don't want to travel to an specific location because of the weather, events, etc. There is a natural higher demand for some dates, i.e. Christmas, etc., while others have lower demand, i.e., summer in some places. I suspect people that travel without time constrains will be most benefited, ofc, but don't underestimate the number of people who travel with time constraints.
This isn't about when they travel. It's about when they book the flights.
Google has an advantage, though, because they bought ITA several years ago, which runs the main database that several major carriers use to schedule flights. Their data is not limited to Google searches, they have all the historical pricing in their database for every possible flight.
That does not make any difference. The act of making the information available changes what will happen in the future. The past becomes a very bad guide.
It's the same sort of thing as with high frequency trading. Quants find a way to profit off particular market movements and in doing so, change the way the market moves. They have to keep updating their models to stay ahead. The difference for Google and flight prices is they don't get new information every microsecond, they can only update on an annual cycle. I don't see how they can possibly make a good job of it.
Airline ticket prices do resemble futures or options contracts a bit, though, in that they have a relationship to a certain date, and once past that date they are worthless. Furthermore, futures contracts on commodities (like FCOJ, right, Winthorpe?) are also subject to catastrophic yearly weather events that can wipe out a whole crop.
I think its naive to assume the Quants can't model airline prices given the massive amount of historical data ITA and Google have.
They can model the airline prices.
What they can't do is predict how they will change in response to customers having the data now.