2022 was the year of General Technology Acknowledgment
The pandemic has fast-forwarded technology and data evolution in the Travel Industry. Those who hope the good old 2019 times will come back must realize the effect of technology and data on our lives, processes, and the tools we use.
Let’s have a look at how data reshapes our businesses.
Hotel Revenue Management
During the pandemic, many Revenue Management Systems spent on upgrading their functionalities. Distorted historical data created the need to seek new data to forecast. The outflow of specialist employees created the need for automation. Changes in customer expectations created the need for personalization. And personalization is only possible with data.
The shift to online changed the way people do business, travel, and communicate. That enhances the role of the Internet, online distribution channels, brand websites, and mobile apps. The change has happened, and those dreaming about returning to 2019 should rather prepare for 2023.
In Revenue Management, we will hear a lot about:
- Demand and new ways of predicting the demand
- Automated price optimization Bundling and unbundling offers according to a personalized approach
- Following that, a bigger focus on total revenue management External data sources (hotel and market prices, reviews, events, flight data)
- Everything of course, will be under the Artificial Intelligence and Big Data blanket
- Real-time distribution
Airline Revenue Management
The pandemic caused an economic shock that affected airlines and produced an incredible ‘V’ shape recovery that we can observe for most airlines today; it also created the need for airline revenue systems to speed up.
The traditional fare booking class availability driven approach, is being replaced by fast, big-data reinforcement learning. This creates the need for big data, all data that is managed by Artificial Intelligence algorithms, automatically changing fares and immediately pushing them to distribution. The change in travel behavior and the number of passengers willing to travel, combined with staff shortages and issues, creates the need for seeking help in technology. That change has happened, and so looking into 2023, we will be familiar with these aspects:
- Reinforcement learning
- All data predictions (internal, external, and e-commerce data)
- Ancillary revenue as value to a personalized approach
- Fast real-time distribution
OTAs become data centers aggregating bed/fare/package banks. Popular before 2019, Price Parity has been affected by OTA driven marketing actions and loyalty programs. Product Parity becomes important, where OTAs incentivize the ability to make sure all hotel and air products are distributed through them. Globalization is in competition with localization, which becomes the challenge in big brands’ race to create a Travel Super App.
As customers change, without the data we are not able to track these changes. Not being able to see customer changes creates a tendency to think that what worked before will work now as well. And this may be a slippery slope to going out of business.
Big brands understand this, and they heavily invest in tech and data. Small brands and start-ups are born with tech and data and are driven by them already. It is the middle section of the industry that has problems adapting technology and data.
According to the survey created by Euromonitor International: Big Data/Analytics and Artificial Intelligence are the top two technologies to impact the travel business in the next five years (by 2027).
So, there is a possibility that if you don’t know your data today, you will be out of business in the future. Travel businesses need to be able to see the values that data and technology bring, not just focus on the cost and effort needed to implement them – especially the brands from the middle sector.