Yield management for travelers: Hubskip predicts the lowest fare for your trip

There are several factors that can cause a lot of anxiety when planning a trip, in previous posts we have explored ways to tackle fear of cancellation and a new approach to preventing check-in hassle. Today we present an innovative and anxiety-free way to get the best air fares to your destination of choice.

As The Netherlands today celebrates a very special Queen's Day, we could do no less than join the celebration by presenting, Hubskip, an Amsterdam-based startup that rocked at the latest The Next Web conference.


Hubskip has devised a system that I am really looking forward to try myself, because...raise your hands those who haven't experienced some degree of anxiety when trying to get the best air fares for the next trip!

As airlines are constantly trying to optimize the yield they extract from passengers by putting technology to work, Hubskip, the startup we are presenting today is turning this around, making the same very dynamic fare environment to work in favour of travelers.

How they do it?

Hubskip has developed predictive algorithms that they claim, given enough data to crunch, can anticipate the future evolution of air fares on a particular route and find the lowest price. 

According to research conducted by Hubskip, air fares fluctuate the most between 2 and 12 weeks before the actual fligh, so the trick is that, once you have decided where and when you wish to fly, Hubskip doesn't actually book your ticket until fares reach the lowest point. Both traveler and Hubskip then share the amount they have saved by waiting to book until the optimal moment.


What if the air fare does not actually go down at all?

Hubskip guarantees your place on that flight, even if they have to make up for the difference or put you on business class. Which gives a measure of how confident Hubskip is about the predictive power of its algorithms (according to the company it got an accuracy of 81% during testing). So, total peace of mind for the traveler that, in the "worst case" scenario would get upgraded to business class!

I was curious to learn more about this project so I got in touch with the founder, Alexander Mans to learn more about it, what follows is my interview with him:

Q: Alexander, could you please tell me a bit more about the origins of Hubskip? How did your project start? 

A: I started the project around Hubskip in March 2012. After having performed a lot of research about the feasibility of predicting airfares, In August 2012 assembled a great team of developers, designers and researchers.

We received a $300k angel investment in September 2012 and set up partnerships with the University of Nijmegen to develop the algorithms. Also we work with Airtrade for all the fulfilment (ticketing, customer service and market insights) and Travelport GDS to have access to all the pricing data from Airlines.

Q: How would you describe, in your own words, your unique selling points? 

A: Hubskip gives travelers complete peace of mind when it comes to buying their airline ticket at the best price possible.

We don't charge anything more than the airlines themselves, don't try to up-sell any other unnecessary products, and share the refund with customers after the price goes down after making a booking.

Q: What is the team behind Hubskip?

A: Our core-team consists of 4 people: Joel Helin, our Lead Designer (graduate of Hyper Island design school in Stockholm), Tiziano Perrucci, who is our software architect (he has a degree in Computer Science and about 15 years of experience), Saiden Abbas, our Lead Researcher (two degrees in Computer Science and Machine Learning) and myself, Alexander Mans, in charge of strategy and founder (I've founded several other companies in the past, sold some of them successfully).


Next to the core-team, we work with the developers of Starter Squad in order to build our software. And we also work with two professors and several PhD students at the University of Nijmegen that help us achieve the highest accuracy for our algorithms.

Q: At the moment I see that only a few cities are covered in your flight search engine, is Hubskip going to be available globally?

A: You'll be able to buy airline tickets from and to anywhere, but we only leverage price fluctuation on the world's main long-distance routes initially. Once we scale, this predictive coverage will be increased.

Hubskip is currently raising it's seed round of around $1M to increase our coverage and enable our booking engine on June 1st.

Q:  When am I going to be able to book my flights via Hubskip?

A: On June 1st we enable booking, after which anyone can buy their tickets. 

Hubskip is currently raising it's seed round of around $1M to increase our coverage and launch our booking engine. 

Q: What are the main obstacles you face?

A: Since prediction requires a acquiring lots of pricing data and computing power, our challenge is to scale our architecture while keeping the costs low.

Q: What is your long term vision for Hubskip?

A: Our go-to-market strategy is based on 3 things.

First, we have Hubskip.com which is a direct sales channel to consumers and allows us to implement, test and prove our technology and improvements.

Second, we will allow direct integration of Travel Agents with our back-end. They will be able to push bookings over our API, or integrate directly at a GDS level.

Third, we will release an open API allowing anyone to integrate airfare search and booking into their applications while we handle all payments and ticketing and leverage the fluctuation on airfares.

We feel that airfares are only the first application of our prediction technology. In the future we would broaden our view to other perishable travel products like hotels, rental cars, cruises, you name it...