How the rental sector can use AI to succeed in the ‘new normal’
Anshuman Singh, vice president and head of consulting [Europe] at information technology and outsourcing firm, Mindtree, addresses how companies in the short-term rental space can harness artificial intelligence [AI] to navigate the ‘new normal’ as countries emerge from their lockdowns.
The Covid-19 pandemic has had an unprecendented impact across all industries, but the travel sector has been particularly hard hit.
While many travel organisations had crisis management and business continuity plans in place prior to the crisis, few could have predicted the extent of the Covid-19 impact. Travel agencies, tour operators, hotel groups, short-term rentals and airlines, plus many more areas of the industry, have faced a significant drop in revenue, with the sector seeing its turnover reduce by 56 per cent since last year, making it one of the worst hit sectors currently.
As lockdown restrictions begin to loosen in the UK, with hospitality businesses reopening and airlines having taken to the air again at the start of June, short-term rental businesses must begin to prepare for the ‘new normal’. By using this period as an opportunity to leverage digital transformation, businesses can ensure technologies are in place in order to achieve economic recovery and sustainable success.
The short-term rental sector certainly has the ability to bounce back in the coming months and revolutionise, but particularly if businesses choose to harness the full potential of data and artificial intelligence [AI].
Preparing for a post-pandemic future with AI
The Covid-19 pandemic served a stark reminder to businesses in the travel sector that they need to fully embrace digital transformation: it has never been more important. Though it remains unclear what normality will be for the travel industry, it is widely accepted that the use of technology — particularly greater AI capabilities — will be imperative for the future of short-term rental providers, both during and post-pandemic.
A recent survey on AI readiness, which surveyed 650 IT leaders in the UK and US, revealed that 51 per cent do not yet understand the data infrastructure needed to implement AI at scale. The data showed that 27 per cent of travel and transport providers across the UK and US have not trialled any type of AI technology, and 21 per cent have not fully deployed AI in their business. This demonstrates there is a valuable opportunity for increased operational efficiency within the travel industry if it can embrace AI more readily, in preparation for a post-pandemic future.
Not only can AI technologies increase demand, adapt at speeds quicker than human counterparts and drive revenue, it can also be deployed to save business considerable financial losses by providing solutions to problems which would otherwise result in full refunds.
Take disruption management as one example within the travel management and services vertical. Some travellers have experienced trip cancellations or been unable to travel home due to imposed lockdowns. If Covid-19 re-emerges as a second peak, leaving travellers stranded again, travel businesses could use AI to analyse the impact on changes in booking and reservation management, and dynamically provide alternate safe and local accommodation solutions. This would provide customers with a safe space to say for a short period while they rearrange their travel plans.
Disruption management is only one example where AI can shape the future of the travel industry to improve the customer experience and ensure business success. Businesses that utilise technology to help customers through times of need will help to retain them — which is crucial at a time of financial difficulty.
Navigating the ‘new’ customer journey
With the modern traveller expecting a seamless journey from start to finish, demanding high quality digital and mobile experiences and real-time responses, it is important for short-term rental businesses to recognise how data and AI can shape the customer journey and the overall experience.
Customer experience in the travel industry is not a new concept; travel brands have long provided experiences to differentiate them from competitors, largely standing at the forefront of this wave. Digital transformation has enabled this, with businesses implementing technologies to ease online purchasing and searching services, realising results through higher precision in segmentation and audience targeting, and optimising customer experiences through personalisation.
However, the pandemic has enhanced the need for investments in the customer journey, with engagement paradigms, booking patterns and customer expectations having shifted dramatically. It is crucial for short-term rental businesses to recognise this and re-evaluate their customer experience strategy, in line with evolving customer expectations in the post-pandemic era.
As travel queries for the later part of 2020 start to appear and searches for holiday bookings in early 2021 begin to rise, short-term rental businesses will need to create strategies to encourage bookings and, more importantly, prevent the cancellation of existing bookings in case travellers are worried about a seasonal spike in Covid-19 infections.
To provide the best customer experience, it is important to build customer journey mapping. By incorporating customer data platforms [CDPs] or journey orchestration tools into their technology portfolio, businesses can introduce algorithms to analyse customer data insights. This allows businesses to assess and understand changes in customer behaviour, and enable them to provide contextual, relevant offers in response so travellers can maximise their trip experience anywhere in the world.
These AI capabilities would enable short-term rental companies to ensure post-booking interactions, as well as responses to enquiring customers, are personalised, real-time operations. By being flexible on existing bookings and offering customers the option of re-booking at a later date, short-term rental companies can place customer retention at the core of their business strategy. Maintaining an existing customer base is crucial to the longevity of any business, and it is those businesses which adapt alongside changing customer expectations that will succeed in the long term.
Utilising data and capitalising on the opportunities that AI can offer to maintain long-term customer engagement and trust will be key to re-building consumer loyalty and thus demand, as the short-term rental sector begins to navigate the ‘new normal’.
Mindtree is a global technology consulting and services company, operating in 18 countries and over 40 offices across the world, which helps enterprises marry scale with agility to achieve competitive advantage. “Born digital,” in 1999 and now a Larsen & Toubro Group Company, Mindtree applies its deep domain knowledge to 300+ enterprise client engagements to break down silos, make sense of digital complexity and bring new initiatives to market faster.
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