It may be a relatively new field with a worrying shortage of professionals but at Accor Hotels, data science is already being effectively used. Pamela Whitby hears more
What is data science? According to UC Berkeley School of Information, the field is emerging at ‘the intersection of the fields of social science and statistics, information and computer science, and design’.
In the travel world, the rise of cheap and ubiquitous data has meant there is a growing shortage of talent. A study by the McKinsey Global Institute estimates that there will be four to five million jobs in the US requiring data analysis skills by 2018. Increasingly executives need to be able to ask the right questions and understand the results of analysis of big data effectively. Increasingly travel brands recognise this and at a recent EyeforTravel show in the US, 67% of the attendees polled believed that investing in analytics and data would help drive loyalty – the main driver for their distribution strategy!
The science of data and analytics is certainly something that AccorHotels is taking seriously but what exactly does a data scientist do? Speaking in his personal capacity Kevin Tran-Dai, who is chief data scientist at Accor, says a typical day involves:
Meeting with internal customers to identify what the internal needs or challenges are. This could be anything from:
i. Increasing customer’s loyalty
ii. Measuring advanced metrics like incremental sales for campaigns or special offers
iii. Analysing customer’s reviews to detect pain points during the stay
iv. Identifying travel trends using open data to increase the efficiency of search engine advertising (SEA) by country of origin.
v. Developing the capability to have a 360-degree view of a customer to detect optimal triggers for dynamic pricing or to de-duplicate (the practice of eliminating repeat copies of data) databases with partners
Discussing new models and tools with other data scientists or business analysts in the team to define which methods and data to use to build analytical tools or studies
Perfecting coding and dealing with bugs and technical issues
Says Tran-Dai: “More than 70% of my time is used to merge data, deal with missing values, clean it up, develop and test models”.
More than 70% of my time is used to merge data, deal with missing values, clean it up, develop and test models
One area where Tran Dai’s energy is focused is in the arena of advanced analytics. This, he says, is being used in three main ways. To:
Understand and predict customer behaviour or preferences, to enhance the customer experience and push smart recommendations. ‘Next stay score’ is one way to determine the likelihood of customer booking a stay in the future by using historical data and weak signal data. This could include stay sequences and online search patterns. Customer lifetime value is also determined by using data to predict possible next destinations.
Test and build pricing optimisation algorithms that challenge revenue management systems. In doing, so the aim is to help revenue managers maximise hotel revenue. Areas of focus include: demand forecast, elasticity estimation and lead-time triggers.
Gather or analyse external data that has a direct impact on performance such as events, exchange rates, weather, tweets or reviews. Tools used include: EventFul, OpenweatherMap, QuandDL, TripAdvisor, Tweeter.
What is clear is that the hotel landscape is changing rapidly and Accor recognises that in order to survive into the future, as a group selling services and brands to hotel owners, it will need to up its game. “As a service provider, our main role is to provide an efficient environment that allows hoteliers to focus only on their business and customers during the stay. Data is certainly a way to optimise but it relies on a strong operational base and systems,” stresses Tran-Dai.
Data is certainly a way to optimise but it relies on a strong operational base and systems
So what is the role of hotel groups like Accor going forward? In Tran-Dai’s view they must:
Deliver strong IT systems and software to hotels (easy deployment, complete integration, best in class features and so on).
Provide and share a 360° view of customers to each hotel to allow personalised services.
Define and share best practices related to, for example, operational training, processes and so on.
Manage or provide distribution channels such as web, OTA contracts; the aim here is to find the right balance between all the available channels out there that sell rooms and services. Yes, source partners for extra services but also have your own system/channel to sell on.
Have a strong brand with a clear ‘service level’ promise.
Step by step
According to Tran-Dai, the steps Accor is taking to date are working well, and data science really can and does reveal value. However, it’s not all plain sailing.
“The main challenge is to have a sufficient quality of internal data to deploy models and insights and to have this running in our systems such as the PMS, web and so on. But if the company is not mature enough to provide accurate internal data (such as customer information, bookings, stays) there will be too much input noise that will strongly decrease the accuracy of any prediction or recommendation,” he says.
The main challenge is to have a sufficient quality of internal data to deploy models and insights
Another concern is whether the traditional hotels are truly aligned with the needs of the new generation. However, Tran-Dai believes that the luxury sector will continue to grow, as it is here that hotels are still able to offer a truly differentiated service and experience.
Going forward, there will be a lot of opportunities as the market is changing rapidly. However, the hotel companies that succeed will be those that are able to deliver excellence in operations, truly understand expectations and deliver those at the right price, concludes Tran-Dai.
Don’t miss the Smart Travel Data Summit 2016 at the Mövenpick Hotel in Amsterdam, November 23-24th 2016, where Fabrice Otano, Chief Data Officer, AccorHotels will be sharing more data and analytics insights alongside other big name travel brands such Thomas Cook, Wyndham and more
November 2016, Amsterdam