InsideTrip Goes Mainstream, Rates Itinerary Quality, Provides Broad Lessons in Online Travel
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He has vast experience in the travel industry. He was previously an executive with America West, TWA, and Alaska Airlines. The last airline brought him out to Seattle—right after the terrorist attacks of September 11, 2001—to run pricing and revenue management during a devastating period for aviation. Pelter spent three years with Alaska Airlines, which he calls “an innovative place,” and then joined Seattle-based Farecast in 2005. He was Farecast CEO Hugh Crean’s first hire (employee #6), and was in charge of building relationships with airlines, among other things.
Farecast is the company, co-founded by computer scientist Oren Etzioni at the University of Washington, which pioneered airfare predictions in travel search. If you go to Bing Travel today, it’s the technology behind the recommendations to “buy now” or “wait” because fares might be dropping. You can imagine airlines might not have loved the idea of predictive algorithms crawling their pricing trends and shedding light on their ticket-selling secrets. But Pelter and the Farecast team managed to convince them that the site could help boost ticket sales; Pelter argued that it made sense, because at the time, something like 90 percent of consumers would leave travel websites without buying anything. He says Farecast got to the point where “the industry is not only not shooting us in the head, but is being supportive.”
Pelter left Farecast in May 2007, about a year before its $115 million acquisition by Microsoft. He served as an advisor to Seattle-based Yapta, the airfare and hotel price tracking site, where he helped CEO and co-founder Tom Romary (also a former Alaska Airlines exec) build relationships with airlines. But he also began to think about starting his own company in the travel sector.
Pelter realized that “nobody has done a quality analysis,” he says. So he could use his “airline guy background and back-office experience” to provide a new kind of flight search experience. That was the genesis of InsideTrip, which he began in earnest in the fall of 2007.
The company’s core technology is based on relational databases that hold information on those 12 metrics of flight quality, which then get boiled down to one number from 1 to 100 (higher is better, and you can adjust which metrics you want to include or not include). The data itself comes from both public and private sources, including airlines, the U.S. Department of Transportation, and the Transportation Security Administration.
The idea, of course, is not that people will choose flights based only on quality, but that they will factor in how much better the experience would be for just a few more dollars, say. You can imagine this could be particularly important for making decisions about long international flights or complicated, multi-stop itineraries.
InsideTrip’s business breaks down into two parts. The first is the consumer-facing website, InsideTrip.com, which is the airfare shopping site. It makes money through ticket-sale referral fees, through a key partnership with Orbitz, and advertising. The second part of the company’s business is … Next Page »