Post Covid-19 pandemic, businesses across the world are on a recovery curve. The travel and tourism industry is already witnessing improved demand compared to the previous years. However, complete recovery is still some time away. According to a global survey conducted by the UNWTO in January 2022, most experts feel that the recovery to pre-pandemic levels is likely only after 2024 or beyond. Such being the case, the traditional forecasting methods of relying purely on historical data points to map future demand will become grossly insufficient.
Revenue Managers and key decision makers from business verticals across the travel and tourism industry are scurrying to find a repertoire of tools that can help them effectively gauge upcoming demand to help plan the future course of action.
Identifying Future Demand through Artificial Intelligence
There is a strong need to identify core demand areas and plan for future demand, as organizations need to be aware and equipped to deal with a sudden outburst of demand as well as plan ahead in case of a dull period by adjusting staffing and inventory requirements accordingly.
Common traditional methods of forecasting airline travelers include consumer searches on meta channels, understanding capacity data published by Aviation bodies etc. However, in the post-pandemic world, this data is likely to be inaccurate as people might be searching for flights in large numbers but not proceeding with the bookings due to regulatory uncertainties and other apprehensions. Even with regard to airline capacity data, higher capacities do not necessarily translate to utilization, as last-minute cancellations. etc. are not taken into account.
Increasingly Airline intelligence consumer needs to leverage a mix of top, middle and bottom of the funnel data to take more accurate decisions
With most past indicators rendered useless, a shift to an augmented approach, relying on Artificial Intelligence (AI) and Machine Learning (ML), has been observed. Having data models that can automatically acquire and analyze multiple data points across the funnel such as Capacity, Bookings, Rates, Search Queries, Covid Data, Travel News/Sentiment/Advisory, Local Occurrences, Business & Leisure Events can help improve the quality of demand forecasting.
Enhancing forecasting through ATF on Demand-AI
Having launched Demand-AI last year, we’ve been able to successfully gauge demand trends for over 60 cities across the world. The AI-assisted engine of the solution takes into consideration the extreme volatility in recovery and focuses on forward-looking, real-time indicators such as flight capacity, current events, Covid restrictions, booking parameters, etc. to provide a numerical index of demand, thus helping businesses forecast demand for up to 90 days ahead.
Today we’re happy to share a breakthrough update to our Demand Forecasting solution at RateGain – Airline Traveler Forecasting.
Anticipating Travel to Plan Future Demand
In the current scenario, granular analysis of airline travel data is often overlooked. This is quite surprising actually, considering that such in-depth analysis would lead to valuable insights for demand forecasting. Higher demand for airline travel would subsequently trickle down to increased demand for hotels and car rentals.
One could argue that the lack of automation tools to acquire such data and the tediousness of manually scouring through data even if it were made available, could be a reason for the low adoption of such practices. However, we’re changing all that with the introduction of our Airline Traveler Forecasting (ATF) dashboard within the Demand-AI platform.
ATF is a RateGain proprietary model that helps users forecast and anticipate travel in the near future based on inbound airline data aggregated from 3rd party sources such as flight schedules and GDS bookings, as well as internal data collected through Demand-AI that includes OND Airfares, Macro-level data such as Current Events and Covid related news.
Source Market Intelligence
The dashboard includes several tools including Source Market Intelligence that provides granular level data reports of up to 90 days on Source Markets that are driving traffic into the Destination City. The indicators for the next 30, 60, 90 days and total expected traffic is shown in a tabulated format. Comparison against the past couple of years is also possible.
Destination Comparison
Destination Comparison helps to compare how different competitor destinations are performing with respect to varied source markets, thus giving an overview of which markets need attention while planning anticipated demand, and to what extent the cities nearest to you are attracting traffic from these source markets.
One can also get insights into the kind of airlines that the travelers are taking. This includes intelligence on Scheduled Passenger Flights as well as Scheduled Charter Flights.
Day Wise Intelligence
Day Wise Intelligence provides an opportunity to identify which days of the week are performing better than the others with regard to airline travelers, shown in a monthly aggregate format, with data from the past year also available for comparison.
In addition to forward-looking data, past performance indicators containing actual data including pre-covid years are also sourced from airports and aviation bodies to give a comprehensive overview of the market with a high level of accuracy. Given the dynamic nature of the aviation sector, this report is presented weekly, letting you have the latest comparison against past performance.
Relevance across Industry Segments
The ATF dashboard isn’t solely restricted to usability in one segment. ATF finds several use cases across multiple industry segments and roles, thus making it an effective tool for the travel and tourism industry as a whole.
Apart from obviously helping Revenue Managers and Digital Marketers from Airlines to forecast the load factor, thus being able to come up with specific promotions targeting the right set of travelers, ATF holds a lot of potential for Hotels, Destination Marketing Organizations (DMOs), and Martech agencies too.
Hotels:
ATF helps Revenue Managers forecast occupancy levels, RevPAR, and peak booking dates; along with the origin of travelers thus enabling them to craft targeted strategies such as special rate plans, pricing, and promotion that work in favor of the hotel to increase occupancy. The Operations team can use the available data to prep up their inventory and perform the necessary staffing and manpower management tasks. Using the available ATF data, Digital Marketing teams too can decide which target markets should the marketing dollars go towards, thus capturing a chunk of those travelers.
Destination Marketing Organizations:
Marketing Managers from DMOs can utilize the insights provided on the ATF dashboard to identify the source markets where the marketing dollars can be spent. By identifying which market segments are gaining traction and where those travelers are coming from, marketing managers can chalk out an effective plan to obtain a large market share that would otherwise have gone to their competition.
Marketing Technology Agencies:
Campaign Managers from Martech agencies can use the available ATF data to modify and optimize the bids accordingly. Based on information about peak travel dates and source markets driving traffic, they can effectively spend the available budget on markets and dates bringing in the most traffic, thus getting the highest value for the marketing spends.
Data Scientists from RMS teams can also benefit from the data points provided within ATF to help improve their pricing recommendation mechanisms.
Accurate Forecasting for Efficient Demand Preparedness
Armed with accurate travel forecast data for 3 months, it is possible to understand the dates and time intervals that lead to the highest demand and the ones that have lower demand. ATF also lets you obtain intelligence on which top airline carriers including scheduled charters are driving travel.
Additionally, knowing which source market contributes to the demand can help determine where to spend your marketing focus on, and how best to be prepared for this forecasted demand. Through this data, you can plan an effective strategy to achieve whatever marketing or analytical goal you have set.
Airline Travelers Forecast is just one of the benefits of our Demand forecasting solution, Demand-AI. To learn more about the advanced capabilities of our solution which can help you accurately predict demand, visit here.
Source: https://www.statista.com/chart/24108/expected-timeline-for-recovery-of-the-tourism-sector/
