Business Administration Education Guide

Tuesday, April 24, 2007

Yapta Dabba Do

Source: The next net


I have a variety of reasons why I love to drive from one city to the next. I love the solitary silence or the rock blaring music of my car. I love seeing ‘off the beaten path’ cafes and retail shops and I hate hunting for cheap airline prices.

Trying to find the best airline prices is so frustrating. Flight prices swing from reasonable to outrageous in the span of a few heartbeats to one day. I actually had to cancel a trip because I had waited too long for an acquaintance to make up her mind on rather she wanted to go or not.

How are you supposed to know when to book your flight?

Airlines have a new nemesis and the start up’s name is Yapta (Your Amazing Personal Travel Assistant). Yapta will soon let you not only track price changes on specific flights, but it will also help you get a refund for flights where the price drops after you've already bought the ticket.

The service is currently still closed in beta testing but is set to launch publicly on May 15th, 2007. Although there will be a central Yapta site for destination search engine searching, CEO Tom Romary said Yapta is not trying to be just another destination site to be frustrated with. Instead, the main way to use the service will be by downloading a plug-in for your browser that will let you tag any flight on most travel or airline Websites.

CEO Tom Romary said explains:

Our core idea is that people go to multiple Websites before making a purchase. We are allowing people to tag the trips they like, and then we track pricing for you.

Every time the price changes on the flights you have ‘tagged’, you will get an alert from Yapta. How is Yapta different?

Farecast tries to predict when prices will drop

Kayak gives you fare histories so you can try to guess what will happen in the future

Yapta will be the only commence who will continue tracking prices on a flight after you purchase it. Why bother?

“You can qualify for a refund even on a restricted ticket if it drops," explains Romary

There is an unknown consumer secret rule in the airline industry called the "guaranteed airfare rule." If you buy a ticket directly from an airline and the price of that ticket later drops, you are eligible for a refund or voucher (usually they give you the price difference minus a change fee).

The guaranteed airfare rule is a voluntary policy most airlines have agree on to calm angry customers and to create customer loyalty. Romary is very familiar with it because he used to be the VP of marketing at Alaska Airlines, where he oversaw the customer loyalty programs.

In just three months, his 275 beta testers have already accumulated nearly $30,000 in air travel savings.

Romary is philosophical about how the airline industry will react:

We recognize we are throwing a hand grenade into a big industry. There are airlines who get it and airlines who don’t in terms of building long-term relationships. Airlines looking to maximize short-term profits are not going to like us. Yield management systems are built to maximize revenue on a single flight, but the real win is building value over the long term. Look, as an airline I still keep your cash. I'm taking a short-term hit, and over the next 12 months I have the opportunity to turn that $100 coupon into a $500 ticket. I’ve locked in your loyalty.

The ecommence most affected and biggest competitors will be the online travel sites like Orbitz and Expedia. Yapta's trip-tagging software will work on those sites, but to qualify for the refunds you need to buy directly from the airlines' own Websites, not destination websites such as Priceline or Orbitz.

As Yapta evolves and learns the personal details about travel habits, they will be able to provide targeted travel-related ads that users are actually interested in. In addition, CEO Tom Romary plans to construct affiliate deals with airlines, and offer personalized alerts on travel deals where Yapta would get a small fee for every ticket sold. Future upgrades to the service could also include an alert system for frequent-flyer award seats.

The Yapta service for airline tracking and deal smoozing is based on a solid foundation and could expand to other areas of travel as well. The possibility to expand this type of service such as hotels, rental cars, and restaurants is a viable option. With prices in everything travel related skyrocketing, Yapta's ambition in putting the power of better travel decisions back in the hands of consumers is going to prove successful.

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