Farefetch is Trying To Change the Travel Booking Game: Will It Work?

Have you ever sat next to a passenger on a plane and started talking about how much you paid for your seat? During the conversation, you discover that you paid $750 for that flight from Los Angeles to New York, but your seatmate only paid $375. After you swallow your frustration, you find out that the passenger who got that great deal either knew someone in the travel industry, or maybe just happened to book two weeks before you did. But is that fair?

Is the travel booking system rigged against the ordinary traveler? That’s the premise behind the creation of Farefetch, a new mobile app that is aiming to change the travel game and give the power back to people who don’t have insider access to obtain fantastic airfares.

How Do Air Carriers Set Their Prices?

Before diving into how Farefetch is trying to level the playing field for customers who want to find low airline tickets, it is first important to understand the basics of how carriers set their prices.

The truth is that most people only have a vague idea of the factors that airlines take into account when they establish a price for a ticket.

Although there is some variance, the most common factors for the price of an airfare are:

• The base fare
• Airport fees, surcharges and taxes
• Fuel surcharge
• Ticket service fee
• Food (international flights only)
• Seats
• Baggage

It’s important to remember that for many lower-fare carriers, food, seat selection and baggage are options, which means that there is an additional cost to have them included in your airfare.

Ticket prices are also determined by demand, so it stands to reason that if you book well in advance, there is wider selection and a higher likelihood that you will obtain a cheaper airfare.

However, as the departure date draws closer and less seats are available, ticket prices tend to be more expensive, because carriers know there is more demand for less available space.

That is typically true for what carriers refer to as “high season,” in which more passengers tend to want to travel, creating high demand for relatively few seats. High season usually occurs during the summer when more families plan vacations because their children are out of school, and the holidays, which is usually the busiest travel time of the year.

There are some other ways you can lower the price you pay for a ticket, such as departing on a Tuesday, Wednesday or Thursday and staying through Saturday, as well as leaving at more inconvenient times, since there is lower demand for these departures.

How Farefetch Works

With traditional online booking services or apps, you submit all the requirements of your flight and wait for a display of the lowest fares currently available.

And while this may seem like a smart way to find the cheapest airline ticket, you are typically at the mercy of travel agents or travel professionals who are not incentivized to find you the best deal. Or you simply end up buying the cheapest flight you find online on a site like Google Flights, Kayak, Expedia or other comparable travel aggregator sites.

Farefetch aims to change all that by putting the power in the hands of anyone who thinks they can obtain low-fare tickets for customers.

Customers access the app and enter their destination, the airport from which they want to leave, the airport where they want to land, the dates they want to depart and return, the number of passengers and the maximum price per ticket that they are willing to pay.

After submitting their request, their email is sent to what are known as farefetchers, basically anyone who has access to obtaining low-cost airfares. These farefetchers have three hours to find a ticket that matches the maximum price that the customer has selected, and to book that flight.

Let’s say a customer requests a ticket from New York to Atlanta with a maximum price of $400. The farefetcher who grabs that request must find a ticket for that price within three hours, or the request is sent to the next farefetcher in line.

But because farefetchers get paid the difference between the fares they find and the fare a customer requested, they are incentivized to find the lowest tickets possible.

So in this example, a farefetcher would want to book a ticket that costs less than $400, so they pocket the difference. If that farefetcher finds an airfare for $275, he/she would earn $125 for that transaction, minus a 10% service fee.

Farefetch operates under the principle that these types of transactions are a “win/win,” because the customer gets a low-cost ticket, and the farefetcher gets paid for having access to that low-cost ticket.

Customers who want to make changes to their itinerary after their ticket is booked must contact the airline directly, and are solely responsible to pay fees related to making those changes.

How Do Farefetchers Find Low Airfares?

Farefetch allows anyone who is at least 18 years old and who has access to low airfares to join the app as bookers for free. They can reside in Chicago or London or Sydney or anywhere in between (no location restriction.) However, farefetchers who continually claim customer submissions and can’t deliver that airfare may be penalized by having their access restricted to customer requests.

But the question most people will have with this app is this: How do farefetchers find amazing deals?

And the answer that Farefetch seems to have is this: Who cares?

As long as farefetchers are obtaining their tickets through legal means, it doesn’t seem as if Farefetch really cares how they do it. Farefetchers have two options at hand.

First, they use digital tools to find the best deal and share the details with Farefetch via an online form. Then Farefetch uses the information and books the ticket (with their money!) for the customer. One week later, the Farefetcher gets paid via direct deposit / Paypal for the difference between the requested price and the final price they found the ticket for.

Second, Farefetchers can book the flights directly on behalf of the customer without revealing the details to Farefetch. However, if they choose this path, they will not get paid until 2 days after the traveler completes the flight (for fraud purposes!).

Clearly, some farefetchers will take advantage of award mileage programs to find fares for low prices. Farefetch did tell us that they “encourage farefetchers to use their creativity and the tools at their disposal to get the best possible deal and make money in the process.” This means, to us that Farefetchers can indeed cash in on their personal miles. We wonder how airlines would react to this model.

And the other question in terms of sustainability is whether or not Farefetch’s margins (of only 10%) will provide enough revenue to keep the service viable.

But it is clear that Farefetch is already catching on, judging by the fact that the app is on track to have 1,000+ farefetchers when it goes live on iOS / Android and online by end of this month. A farefetch representative confirmed that in the month of May “more than 600 people have already signed up with our service as Farefetchers. It’s free, it’s convenient and it will help democratize the travel industry.”

Anyone interested in signing up to become a booker for Farefetch can visit http://www.farefetch.com/farefetchers for more information. We signed up ourselves out of curiosity!

#Farefetch #Cheapairfare #Travelapp