Hospitality’s grand reopening
Blog: Capgemini CTO Blog
COVID-19 has disrupted every industry, but perhaps none more so than hospitality. The sector’s core value proposition is, by design, highly personal, typically offering high-touch experiences to make guests feel appreciated and cared for.
For some businesses, like theme parks and cruise lines, the guest experience is partly communal, with people coming together to share meals, entertainment, and activities. For these organizations, reopening involves many critical considerations for keeping guests safe, but also providing the type of experience they expect.
Leveraging digital to manage the short-term response to COVID-19
As cruise lines and theme parks come back online, they will need to address some obvious risks related to COVID-19: high population density within the perimeter; high levels of interaction and shared space; and limited control of where, when and how people move within the facility. At the most basic level, companies will need to comply with public health and government guidelines, installing social distancing markers in queues and dining areas, encouraging the use of protective equipment, creating handwashing or hand sanitizing stations or even performing temperature checks for guests and staff.
Looking beyond those physical safety measures, digital provides a helpful way to reduce the risk of transmission by adapting the way the venue operates. For example, by shifting to a digital queue rather than a physical one or requiring electronic payments for ticket sales and retail purchases, companies limit interaction and contact points. Brands can also encourage the use of online stores, incentivizing guests to purchase from digital channels, as opposed to physical shops. Finally, brands can determine what tasks can be automated or outsourced, reducing the amount of staff needed to operate the facility.
Another big area of concern for theme parks and cruise lines is around contact traceability. How will the organization gather guest and employee information to be used in the unfortunate event of a resurgence? Organizations will need to develop and deploy a system capable of gathering this information. Doing so manually – with shared pencils and paper which are then filed by staff – defeats the very purpose of the system, in that it would likely increase human-to-human contact and small gatherings. Integrating this function within a mobile app or as part of existing digital processes would help reduce risk as well as improve the speed of analysis and mitigation.
Finally, organizations should consider taking contact tracing a step further to understand how people move throughout the perimeter. Having a rich source of customer and employee interaction data can help companies understand frequent guest journeys and touchpoints and use this information to update or alter them in a way that promotes safety and health, as well as satisfaction.
Long-term recovery: Reducing operational costs through data and AI
The reality of today’s business landscape for the hospitality industry is that a full recovery will take some time. In the meantime, a key part of the operating strategy will be to reduce expenses to accommodate the lower level of customers and even a possible pause in operations should a second wave of the virus occur.
One of the most obvious applications for data and AI within the cruise and theme parks sectors is dynamic pricing. Typically used by airlines and hotels, this capability allows the organization the flexibility to adjust ticket prices based on demand and maximize margins. This is especially important when events such as COVID-19 limit the number of people who can safely be admitted onboard or onsite.
In a dynamic model, pricing typically starts low and is raised as inventory is consumed. However, in combining this capability with other technologies, such as predictive modeling and AI, the organization can enable even more precise planning. For example, the algorithm can identify an opportunity to sell in excess of physical inventory by considering historical or weighted “scoring” of bookings, which take into account a number of inputs, including the source of the booking, historical data, the time of year, the guest’s location or age, the cruise destination or length.
To reduce the cost to serve in key business functions, companies can use data and AI to help to run more leanly, thereby reducing risk to employees who are operating the business. Companies should create a list of use cases that are immediate targets for analytic-based optimization or automation. For example, companies can automate the refunds processing or rebooking. Automation can also be used to manage guest communications, sending targeted and personalized messages to customer segments based on their location, history, upcoming plans, or known areas of interest.
Finally, companies can leverage data and AI to enhance their loyalty strategy. For cruise lines and theme parks, the most loyal customers are often the most profitable clients. Organizations can use this information to personalize communication and create customized offers for this select client base, encouraging their safe return through targeted promotions.
Next steps: responding to COVID-19
Perhaps the biggest concern for the hospitality industry is the uncertainty around the virus and the economic downturn associated with it. For many organizations, they are torn between investing in solutions that will address this situation and containing costs at a time when budgets are at their tightest.
It is important to keep in mind that many of these underlying data and analytics capabilities are essential to a modern business. Concepts like dynamic pricing and journey mapping are useful not only in times of hardship, but when the business is surging. These investments are the building blocks of a more resilient, agile, and profitable business of the future.
For more information about how cruise lines, theme parks and other hospitality organizations can leverage the power of data and AI to respond to COVID-19, please see our Smart Contact Tracing & Quarantine offer or contact the authors:
Mark Kirby, Vice President Hospitability Transformation, Capgemini North America
Goutham Belliappa, Vice President, AI Engineering, Capgemini.