Artificial intelligence and the future of travel retailing

The post-COVID aviation industry is a true “wild, wild west.” The recent past is no longer useful for forecasting demand and informing pricing strategies, given the historical impact of the pandemic and the reliance of forecasting models on past performance. The current scenario of pent-up travel demand versus pandemic-affected seat supply is equally anomalous. Also, The researchers estimate that more than 90 New airlines have emerged globally in several service categories, including low-cost, long-haul, ultra-low-cost and reasonably priced premium. As a result, airlines must rethink how they compete for once-loyal travelers. A detailed review of your technology toolkit provides some answers.

AI and the movement of offers and orders

Artificial intelligence (AI) and machine learning (ML) are among the short list of technologies that can help airlines, accommodation providers and online travel agencies improve their performance and win back customers. AI (the ability of computers to simulate human thought) and ML (the ability of computers to continuously adapt to data) align with a larger industry move toward highly flexible technologies that offer intelligence, choice and ease of use. use.

AI and ML support the bid and order model, which simplifies airline booking, delivery and accounting systems. Offers & Orders aims to replace the limited visibility into traveler preferences, and the challenges of selling and servicing personalized offers and managing complex partnership agreements, with the ability to create, fulfill and deliver higher quality, more personalized content services. margin. AI and ML enable real-time data streams to help optimize conversion, reduce costs, and forge new partnerships that improve customer choice.

Where airlines are investing their AI/ML resources

While the potential of AI and ML is virtually limitless, airlines have begun to focus on its value across multiple retail use cases, including dynamic pricing, personalized offer generation, and screen personalization. Air Serbia recently partnered with software and technology provider Saber, using its retail intelligence products to generate relevant offers by analyzing the airline’s real-time purchasing and revenue management data combined with market information.

“Creating products that better meet the expectations of travelers and help improve airline profitability at the same time is more important than ever,” says Bhaskara Rao Guntreddy, vice president of product for offer optimization at Sabre.

AI and ML are also improving airlines’ ability to test specific scenarios, such as what happens when an airline adjusts ticket prices up or down for a particular seat on a specific route. Using smart technology, the airline can infer patterns about who buys and buys tickets at various price points across multiple channels and apply those learnings and assumptions in real time. AI and ML also enable airlines to continually experiment at scale, identifying opportunities in various markets and maximizing revenue potential. As with any experimentation framework, price is just one of many variables to test. AI and ML can assess and improve service, compliance, and many other scenarios.

The potential increase in conversion and scalable data-driven insights only represents a fraction of the benefits of AI and ML for travel providers. Continuous experimentation and real-time feedback give airlines a much smarter way to run a business. The insights provided by AI and ML—learnings that humans could never analyze at scale as quickly or efficiently—allow airline employees to focus on activities that require a “human” touch. They allow airlines to personalize offers for a specific passenger through small, consistent discoveries that are immediately testable, and they allow a critical and risk-averse industry to get comfortable with a new kind of decision science.

The value of technological alliances

Partnerships with travel technology companies help bring innovation to life faster and at scale for travel retailers. For example, airlines with various levels of data science sophistication can leverage a suite of AI/ML tools as their business needs dictate. Acquiring AI capabilities through a travel technology company also helps travel providers address some of the challenges and requirements of AI and ML implementation. Examples include testing new AI algorithms in a sandbox with clear KPIs, assessing the quality of data needed for AI testing, and assessing AI bias. Travel technology associations also help employees, customers and regulators understand the benefits. of AI and the importance of choosing the right AI and ML platform.

Saber’s AI and machine learning solution uses Google Cloud, leveraging the technology leader’s computing power, reliability, security and advanced capabilities. Google’s Vertex AI, for example, provides fully managed ML tools for any use case. For example, when an airline wants to run an experiment on whether loyal customers would be more willing to upgrade their cabins if offered a specific incentive, Saber can run the test using an existing platform, practices and optimized infrastructure.

Dealing with the pain and pleasure of traveling

The future for AI and machine learning in travel retail is bright. Better targeting and engagement with customers will manifest in better pre-trip experiences, which could include destination, route and travel date recommendations, alerts for preferred destinations, price predictions for desired itineraries, and virtual travel planning assistants. Upgrades on the day of travel could include loyalty-based seat upgrade offers, optimized user experiences on airline websites and apps, rebooking flights due to delays or cancellations, and streamlined security, customs, boarding and check-in checks through the facial recognition and biometrics. From a post-trip customer experience perspective, potential improvements could include outreach to customers who have experienced trip disruptions, assistance with claims, reimbursement for lost items, special offers on frequent travel routes, and problem resolution. of the rewards program.

AI-enabled chatbots will be able to provide customers with increasingly sophisticated levels of service and ease much of the pain travelers feel today. While the travel industry has used robotic processes for years, for example when checking for lower fares or better seats, smart bots will go beyond chatbots that emulate human conversation to bots that act independently on behalf of travelers. Travellers. perform tasks such as planning, booking and managing entire trips using autonomous agents. There may also be more AI-enabled robots on the horizon to help travelers with services at the airport, such as flight boarding, seat changes, and rebooking of missed flights.

What is happening now is just the tip of the iceberg. The application of AI and ML is the first proof point for an industry charting new territory. However, leadership, broader industry momentum and strong technology partnerships are giving airlines and other travel providers the choice, intelligence and ease to retail as leaders in other verticals and remain competitive. in a volatile and complex world.

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