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07/02/2020

Marketing Your Hotel in a Post-COVID World Requires AI

Michal Christine Escobar
Senior Editor (Hotels)
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Since the start of COVID-19, customer expectations have shifted, specifically to value safety and cleanliness. As travel begins to resume, however, each customer’s recovery roadmap and comfort level with travelling will be different. Some may crave a vacation immediately and will be willing to brave the airport whereas others might be more cautious. For customers to believe that their once trusted brands understand and care about them, hoteliers will need to ensure that the experiences they’re promoting to each customer are aligned with the individual’s expectations and that the incentives they’re offering are relevant as well. For example, an offer for a hotel in a big city would be much more suited to a more adventurous consumer while the more cautious customer might appreciate offers around future trips or secluded cabins. 

But how can hoteliers get this difficult aspect of marketing correct? With the help of artificial intelligence. To learn more about how AI can help brands adapt their loyalty and marketing strategies, HT spoke with Christian Selchau-Hansen, co-founder and CEO of Formation.ai.

How important is AI in marketing to travelers in a post-COVID world?

It’s hard to overstate the importance of AI when it comes to communicating with hotel guests and airline flyers as travel restarts. While many states and countries are working on how to open up, fear and uncertainty are understandably still present. Because of this, marketing efforts must adequately answer travelers' critical questions in order to make a decision on where - and if -  they’d like to travel. And each individual will have different comfort levels and motivations. This is where AI is not only useful in cutting down manual processes required of marketing teams, but also necessary in reaching the right individual, at the right time, with the right messaging. Relevance has always been an important factor in creating customer loyalty in the past, but when it comes to traveling in a post-COVID world, the right message targeted to the right traveler will be essential.

How will travelers differ in their comfort level with traveling?

Each individual’s preferences and comfort level for travel is highly varied given the broad range of factors at play. A few examples include the reason for travel, the local environment and regulations, method and duration of travel as well as a host of personal factors. The broad range of factors and preferences highlights the need to address individual travelers with personal messages and offers in order to assist customers and ultimately build stronger customer relationships. 

How can AI be used to market to these different comfort levels?

Instead of segmenting on just a couple of factors, the application of AI and machine learning enables the incorporation of many more factors, helping to better differentiate each customer, recognizing them as an individual rather than mostly the same. Additionally, AI can be used to create individualized offers far more efficiently than via traditional segmentation. Instead of a one-size-fits-all discount, with AI, marketers can deliver individualized offers based on a more nuanced customer understanding and subsequently, create the most appealing for the individual. As travelers begin to book trips again, the application of AI will be an important tool for marketers to better understand their customers’ comfort levels and deliver more relevant offers to their customers. 

Can you provide an example or two of this in action?

If companies think about travelers in segments, it can be easy to assume that college students and recent graduates are more willing to start traveling again and are looking for a good deal. and that the 50+ population might rather spend more and get more, or be wary of travel altogether. But individuals within a segment vary widely in normal times and motivations for returning to travel will vary person-to-person. Companies should focus on individuals.

One great example of how to do this is leveraging AI to recognize new customer behavior patterns. For example, take two customers. One customer is typically a frequent traveler, but hasn’t searched for a room since the pandemic began, while another customer, though entry-level, is actively searching for availability. This could indicate that the second customer feels it’s safe to start traveling, while the first has not yet reached that point. Rather than making a broad assumption about these two guests based on an average customer or the segment they fall into, with AI, companies can recognize how different customers engage with company offers and incorporate data reflecting local markets, regulations, and timing. From there, AI can utilize customer data before and after taking action, to optimize the communications to increase relevance with individuals as time passes, comfort levels change and new patterns emerge.

What kind of mistakes with marketing can AI help hotels avoid?

In a post-coronavirus world, loyalty will be even more important for hotels to reestablish relationships with their customers and, ideally, strengthen these relationships for a successful rebound. The most critical aspect of a loyalty program is that companies can communicate with more understanding about the context of each person, which is only possible with the help of AI and machine learning. This understanding will make it possible for customers to have access to the most relevant and helpful information when making their travel arrangements, rather than floundering in uncertainty and taking frustrations out on the brand. 

Additionally, given changes in individual customer purchase patterns, the hotels that are able to rapidly and scalably identify and act at the individual customer level with the most relevant benefits and value will have a significant advantage over those who cannot.

Any other thoughts?

Helping travelers understand and adjust to the changes in safe travel is definitely the first step. But as we all navigate the transition through COVID, the ability to address customers as individuals, and thereby strengthening relationships with each of them through relevant and valuable communications and offers will be essential for companies to win in the long term.