Can AI Help Hospitality Brands See the Future in Turbulent Times?

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Can AI Help Hospitality Brands See the Future in Turbulent Times?

By Sean Byrnes, CEO, Outlier - 04/09/2020

One of the keys to effective marketing is knowing how your customers are going to behave so you can communicate and run your business based on their anticipated and real-time actions. But none of us has a crystal ball and in the current market there are more unknowns than ever

Traditionally, hospitality companies have used historic data to make educated guesses on everything from potential room and event space demand to foodservice and staffing. While technology has improved to include more data from more sources to manage revenue forecasting, this approach still has its blind spots. Most importantly, it doesn’t account for the unexpected.

To better understand how consumer behavior will impact business in the coming months, hospitality companies are starting to look at tools driven by AI (artificial intelligence) to add a new layer of intelligence that can identify and flag unexpected changes in data or consumer behavior. This “early warning” detection system is proving to be much more effective than traditional business intelligence dashboards or forecasting recommendations because it takes into account behaviors that other systems simply can’t track.

Expanding our Vision

The idea that we can automatically detect small changes in consumer behavior that foretell larger trends is called automated business analysis. It’s a strategy of continuous data analysis that elevates and proactively reports on the unexpected. Automated business analysis can look at all the data that a revenue management system can see, such as year-over-year data, current bookings, weather, social data and more. It then uses AI to compare customer behaviors to normal or expected results and flags on activities that fall outside of the unexpected.

Personalized insights are then shared each morning to leaders and managers based on data from the last 24 hours, highlighting exactly where they should be looking and what they should be looking for in the data.

This approach delivers a couple of important benefits. First, it adds context and timeliness to insights by delivering, proactively, only the reports that indicate some level of unpredicted change. It points to something specific that needs further review. Second, the reports drive the day’s action items in a way that allows managers to address activity and adjust quickly, shortening the time-to-action.

Guiding Our Attention to Drive Better Outcomes

This scenario is easy to understand when you look at our current landscape.

Nearly all travel and hospitality companies have been sidelined by the coronavirus pandemic. But a few organizations were able to prepare contingency plans in early February simply based on reports from their ABA system.

For example, a major cruise company used its Outlier automated business analysis platform to start safeguarding their business from the potential impact of coronavirus when the system flagged unexpected cancellations in early February in a key market. In this case, the platform was looking at overall customer data related to bookings and cancellations. With traditional BI visualization, leaders in the region may have noticed a change in trajectory at some point, but the AI driven technology offered proactive, daily updates as key markets started seeing higher cancellations rates and slower bookings.

According to the business intelligence analyst for the cruise company, they learned that coronavirus was a growing problem in early February as the Outlier automated business analysis platform started to report unexpected changes in customer behavior and data for the Australian market. Two weeks later they saw the same lowered demand in the U.K. market. Upon analysis they could tie this to changing consumer behaviors related to coronavirus escalations in Italy. The following week the impact expanded to the Americas markets.

By having this early warning system in place, the company could start communicating to all its customers regarding changing travel plans, cancellation policies and more. They could also halt or revise outbound marketing programs to reduce unnecessary spend. In addition, they could quickly adjust customer service teams to meet the need in different regions as the impact of the virus rolled westward across the globe.

Helping Us Map the Future

Automated business analysis also works to identify positive trends that brands can take advantage of, in order to drive revenue. For example, comparing customer behavior related to online search data can reveal destinations that may be growing in demand. Hoteliers may not have up-to-the date information on special events, festivals or other happenings in every market, but with automated business analysis, these unexpected behaviors trigger an alert as soon as data falls outside of the expected range.

An automated business analysis platform also offers root cause analysis so managers can find out why a change occurred. For example, in the event of a pop-up music festival that prompts consumers to search for local lodging, hoteliers can proactively market special incentives, plan for increased staff and dining options and create opportunities for increased revenue.

Companies like cruise lines or tour companies can use similar data to identify potential new routes or destinations. Consumer behavior is often the first indication that a destination is heating up. But when considering a new offering, there’s no historical data to indicate future interest. Using an ABA approach allows a company to pull data from third-party systems such as Google Analytics, ads and email marketing data and any additional data within the organization, including a data warehouse.

As hospitality brands continue to find their footing in turbulent world, it’s important to understand behavioral change, and the impact of change, as it happens. While there are lots of tools available for historical reporting and general dashboards, only automated business analysis platforms have the power to direct real-time operational adjustments, meaning brands can understand, evaluate and change behaviors just as quickly as consumers.