How to improve your forecasts and deliver better results in 2023
Travel and hospitality companies need to remain efficient, profitable, and customer obsessed as they deal with today’s uncertain and dynamic market challenges, from supply chain challenges to capacity constraints to economic uncertainty. One way travel and hospitality companies can increase profitability is through improved forecasting, but many are still looking for tools to optimize forecasts and improve resource planning.
Acquisition & Forecasting solutions from Amazon Web Services (AWS) provide travel and hospitality companies with the tools that they need to better estimate inventory, resources, and talent that they require to operate efficiently. Actionable forecasts bring tangible value: estimating the number of guests and arrival times, staffing accordingly, adjusting inventory positions, modeling the impact of promotions and events on business performance, optimizing pricing-revenue management, and projecting revenue and cash flow.
What is driving this acquisition and forecasting priority?
Vast amounts of data from multiple sources (sales, labor, loyalty programs, yield and revenue management, and others) have made accurate forecasting more important—and more challenging—than ever. Forecasting cycles that were once monthly are now weekly, weekly cycles are daily, and in some critical cases, forecasting might occur throughout the day to monitor dynamic inputs. However, legacy forecasting processes and systems weren’t designed to handle this volume of data, requiring companies to modernize their infrastructure.
Furthermore, many travel and hospitality companies are looking to update their revenue management practices and retailing approaches to offer more dynamic pricing and personalized bundles, all of which rely upon accurate demand forecasting.
How can travel and hospitality customers benefit?
Travel companies (airlines, airports, ground transportation, travel sellers, and travel tech) and hospitality companies (restaurants, catering and food service, accommodation and lodging, cruise lines, casinos, leisure services, and hospitality tech) of all sizes and industry segments stand to benefit from optimizing their acquisition and forecasting solutions.
- avoiding resource inefficiency, including buying too much product, facing spoilage or waste, and missing opportunities to invest capital elsewhere;
- avoiding missed sales opportunities and poor customer experiences from resource shortages; and
- optimizing forecasts for workforces, ordering, inventory, and operations while reducing cost and delighting the customer.
What should travel and hospitality companies consider?
In evaluating their current acquisition and forecasting capabilities and how they can improve, travel and hospitality companies should consider questions such as:
- What metrics do you include to evaluate the forecast currently?
- What business impact do you want your forecasts to have? How do you measure them?
- What data will you have available to use for building a forecast model? Of this, what will be available when you want to predict the forecast horizon (future)?
- How far ahead do you need to use the forecasts that were developed?
- At what level do you need to forecast based on location and product hierarchy?
- How much effort can you put into model refresh/rebuild and at what frequency?
- What level of granularity will result in valuable forecasts?
- Is perfection expected? Or is reliable and robust performance that will guide your business in the right direction sufficient?
- Will your business accept the forecast as is? Alternatively, will you want to adjust it?
Consider cost, return on investment (ROI), revenue lift, and time to launch as key factors in evaluating potential solutions.
What travel and hospitality customers are doing this well?
Sweetgreen brings together data from 31 separate sources on AWS to produce sustainable ingredient production forecasts. It deploys single-purpose, short-lived data clusters to solve complex models without a dedicated data engineering team. Using AWS, the analytical teams have the elasticity to optimize analysis for a fraction of the cost—and produce more accurate forecasts that prevent food waste and ingredient shortages.
Korean Air uses AWS to optimize the use of its 50+ years of past operating data to proactively forecast its maintenance needs. This produces insights that include the cause and impact of unexpected defects. The company also generates predictive future maintenance requirements for thousands of individual aircraft and engine components. This helps the airline keep its aircraft in service, improving its on-time performance and customer experience.
Deputy software, a shift-worker scheduling and workforce management platform for travel and hospitality, uses AWS to forecast scheduling plans by recommending each individual’s optimized schedule. This includes sentiment analysis so that workers are kept at the forefront to create a positive employee experience. By empowering staff to be stakeholders in the scheduling process, workplace engagement increases, which helps travel and hospitality companies stay competitive in today’s labor market.
Get started with acquisition and forecasting on AWS
Mastering acquisitions and forecasting alongside AWS helps travel and hospitality companies cope with the impact of the future’s uncertainty. Using AWS, travel and hospitality companies can improve planning activities and facilitate service continuity, reducing waste and operational costs.
Acquisition & Forecasting solutions for travel and hospitality from AWS are curated for the industry and include AWS services such as:
- Amazon Forecast, a time-series forecasting service based on machine learning (ML) and built for business metrics analysis;
- Amazon SageMaker, where developers can build, train, and deploy ML models for nearly any use case with fully managed infrastructure, tools, and workflows;
- Amazon Rekognition, which offers pretrained and customizable computer vision (CV) capabilities to extract information and insights from images and videos;
- Amazon Comprehend, a natural-language processing (NLP) service that uses ML to uncover valuable insights and connections in text;
- AWS Travel and Hospitality Competency Partners, providing technology products and services to accelerate the industry’s modernization and innovation journey; and a library of industry-specific reference architectures and implementation guidance to show what’s possible.
To learn more, you can also read 21st Century Forecasting for Travel and Hospitality Companies or check our series of revenue management guides.