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Last Updated : Feb 24, 2020 05:56 PM IST | Source: Moneycontrol.com

AI is the key ingredient for travel and hospitality sectors' business strategy

Artificial Intelligence, is proving to be useful for a number of processes and functions across businesses in the travel and hospitality space, both in terms of internal operations and enhancing the experience for the end-users.

Moneycontrol Contributor @moneycontrolcom
travel, leisure, hospitality
travel, leisure, hospitality

Bhanu Chopra

The very essence of travel and hospitality lies in connecting people to each other as well as to places and experiences. However, consumer behavior is constantly changing, competition continues to heat up, and the industry, though witnessing consolidation at various levels, continues to be highly fragmented. So, as new and emerging technologies are playing a pivotal role in the rapid digitization and automation of this increasingly ‘connected’ world, it only makes sense that players in the space are frontrunners in terms of their implementation. Artificial Intelligence, in particular, is proving to be useful for a number of processes and functions across businesses in the travel and hospitality space, both in terms of internal operations and enhancing the experience for the end-users.

With its extensive capabilities, AI is able to take a deep-dive into several data sets, unearth otherwise hidden patterns, identify opportunities and deliver actionable insights. This is enabling businesses to improve their offerings across the board, helping them deliver customized experiences for travelers, cut down costs and boost revenue at the same time. With this, it is no surprise that the global market for AI in the travel and hospitality space is expected to grow to over $11 billion by 2024, according to a report by Industry Arc. Let us look at some of the key areas where AI is influencing large-scale changes and positive impact within the industry.

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Helping travelers plan the perfect trip

While there is an abundance of data available today, one of the primary challenges companies face is continuous and consistent access to data which is relevant to shaping their offerings. This is where technology companies who are realigning themselves to become travel companies have an advantage. With AI and advanced analytics tools, they can use the data they collect first-hand from consumers through devices and applications to predict the perfect itinerary for the user based on behavior and purchase history.

Google is one such company which is playing to its strengths and doing this with ‘Google Travel’, the company’s consolidated travel site. Once a user begins making their travel plan, it leverages historical data to map preferences of a particular consumer and present a guide and/or recommendations about the destination. Additionally, once you’re done, it collates all the purchases you’ve made to present a complete itinerary in one place.

Improving efficiencies and pricing accuracy

There are multiple variables involved when a user is planning a trip. Of these, weather and events are amongst the most unpredictable and can cause both a fall in demand and a rise in demand at the same time. However, it is difficult for travel companies to keep track of these and understand their impact, which could lead to top-line erosion. Here, a well designed ML framework, which uses predictive algorithms based on SARIMA/ARIMA models combined with advanced Deep Learning models, can enable revenue managers to accurately predict, understand and identify these red flags. This helps them ensure that they monetize the increased demand well in time or reduce the impact on their forecast by proactively adjusting prices.

Getting the right demand

While the perfect trip is curated by consumer technology companies, distribution and e-commerce teams in hotel chains also need analytics and software that allows them to establish connectivity. Therefore the application of AI to identify and recommend the right distribution channels will continue to gain more importance in hospitality as impulse travel continues to rise. For instance, certain companies have come up with innovative smart distribution solutions which help chains discover new demand channels by leveraging AI and ML.

By incorporating features like automated channel discovery and auto-mapping for rooms, this is helping hotels gain valuable insights into, and optimize source markets and demand channels. Additionally, it is allowing hotels to benchmark themselves with their counterparts in real-time. This is enabling them to strategize proactively and bring about greater automation-led innovation into the process.

Delivering the right experience

Social media plays an integral role in most people’s lives, be it mindlessly scrolling or actively posting, most of us use it every single day. For travelers, it’s the best place to showcase photos from their trips, as well as to find inspiration from other sources, post feedback, reviews or complaints. Using AI and natural language processing tools to directly tap into this large data pool of consumer insights can do wonders for businesses in the travel and hospitality space. It can help them gauge individual preferences, analyze sentiment and categorize customers effectively to provide tailor-made experiences at a more granular level, based on both data from their social media behavior and previous visits. This includes information like preferences for travel and locations, patterns of enquiry etc.

In this way, the resulting data gathered on each consumer can be used to create a strong reference framework and enhance their experience in real-time, with personalization at the core of their stay, recommendations and offers. Moreover, this also helps enterprises identify challenges as well as new opportunities that may otherwise go unnoticed, which can be rectified/implemented to positively impact future strategies and initiatives.

Conversational bots for greater engagement and insights in real-time

While in earlier times customer service was driven by human agents, today, conversational AI, more commonly known as chatbots, are coming to the fore as a preferred customer service tool for businesses across industries. Backed by AI and machine learning (NLP), these tools are available 24x7 and have the ability to respond instantly to hold human-like conversations with customers over chat. As per research by HubSpot, 71% of people prefer chatbots when looking to get a problem solved quickly.

The travel and hospitality space, in particular, is ridden with customer queries at any given time, across the travel purchase cycle. This is where chatbots are proving to be extremely effective in being at the frontline of communication with customers, be it flight/hotel bookings, schedules, or any additional information. They can be programmed with predetermined data, according to the purpose they were built for, and become smarter with every interaction, picking up on customer preferences and behavior to personalize the experience for every individual. They can answer most FAQs pertaining to the business’ offerings, offer personalized recommendations, record feedback and even present tailor-made offers and promotions. Moreover, if a conversation requires human intervention, the bot can also be programmed to seamlessly alert a human agent who will then take it forward.

Several hotels are implementing chatbots to optimize the guest experience in real-time. For instance, Marriott International’s Aloft Hotels brand launched its chatbot, ‘ChatBotlr’ which helps front desk staff by taking over customer queries and demands during their stay. Through the bot, customers can text to ask for room service, schedule wake-up calls and ask about hotel amenities, amongst other things. This effectively augments the role of human teams, helping them deliver better service while simultaneously collecting several valuable data points on each guest.

Creating engaging, personalized experiences for customers is the ultimate goal for any business in the travel and hospitality space. However, in order to achieve this, businesses must simultaneously work on optimizing their back-end processes as well. With AI being the backbone for the implementation of most other technologies, a larger number of businesses are choosing to use it to kick start or enhance their digital journeys. It is helping businesses utilize data in a manner that effectively augments the roles of human teams to deliver experiences that customers enjoy as well as influencing their decisions by gaining a better understanding of their requirements. In the long run, the deeper, more accurate insights and actionable data lead to reduced costs for the company, improve customer satisfaction and ultimately help unlock additional revenue across various touch-points.

The author is founder and chairman at RateGain – a global provider of B2B SaaS products for the hospitality and travel market.

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First Published on Feb 24, 2020 05:56 pm
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