Until a few years ago, this inventory was managed manually by a large team of revenue management analysts. According to Goldner, they put time and effort into ensuring that bookings were happening at the right pace, and the right price. They did so by analysing trends in the market and what the business needed to achieve, and then reacted accordingly. However, as the group has continued to grow, it became clear that it would be impossible to manage those millions of price points without some sort of artificial intelligence (AI).

To kick off its digital innovation efforts, the cruiseliner has worked with strategy firms Boston Consulting Group (BCG) and Accenture to better understand the opportunities. What the research showed, says Goldner, was that more could be done by segmenting customer groups. That was a good first step, because although the group has typically achieved 100% occupancy of its cabins, it soon became clear that there was an opportunity to proactively manage prices for different groups.

“We are on a journey and this is the first major step. Over time we are trying to figure out the right mix between human intervention and pricing controls versus automation,” Goldner explains. Like the airlines, which still operate a hybrid, model, he adds, “the answer is [probably] somewhere in the middle and we are getting comfortable with it slowly”.

Active management

To date Royal Caribbean’s automation efforts have been implemented in booking windows that have typically not been actively managed. For example, those that are about 10 months out from the date a ship sets sail versus just a month. “We see different customer types buying during those windows,” Goldner explains, adding that historically, there had been no active price management in these cases because of a lack of resources and limited booking activity.

Working with Accenture, which is now managing a portion of the inventory through automation, a major focus has been to look at elasticity of pricing. “As part of this, we have built an AI model that is continuously learning and adapting to what we are seeing in the market, and the impact that price changes can have on demand,” Holden explains.

Although the shift to automation is often viewed as a cost-cutting exercise, this is not the case at Royal Caribbean. “We are not replacing analysts but rather changing the jobs that they do,” he stresses. In other words, whereas today an analyst might be using a system to manually change a price, in the future they might be managing controls to make the price change.

In fact, the group is adding different types of roles and skillsets. For example, it has recently hired four data scientists and a senior vice president of AI who is building an entire team and department to take the project forward.  Although consultants have helped to lay the foundations, the idea eventually is to bring the capability in house.

Goldner is clear: “AI and ML is not an effort to cut costs. It’s really to increase the scope of what we manage and it helps us be less one-dimensional about the client.”

The work at Royal Carribbean reflects a wider industry trend: to segment better and deliver more targeted offers. Increasingly, companies know who the customer is, what they like to book, what matters most, price or product – and so on. “In order to really take advantage of that you need pricing and promotional capability that allows you to execute on the information, and a lot work we are doing [with AI] lets us do that.”

So, while the cruise industry may be lagging the rest of the travel industry in its efforts, Goldner is clear: “There is a ton of opportunity.”

Join Hotel Technology News (a proud media partner) at EyeforTravel North America, Chicago, EyeforTravel North America 2019, Chicago, Oct 28-29 to hear more from Royal Caribbean and other leading travel brands including Hilton, Marriott and more

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This week, the company announced its latest upgrade. According to reports, it has implemented a new CRM platform and mobile application designed to drive improved sales growth while ensuring standardized and efficient operations. By integrating technologies into a single, scalable system, the company aims to make it easier for its franchisees and owners to do business with the global hotel group.

The cloud-based solution was built on Salesforce Sales Cloud and Salesforce Community Cloud. It was implemented in one fell swoop across the company’s Americas portfolio, including Radisson Blu, Radisson, Radisson RED, Park Inn by Radisson and Country Inn & Suites by Radisson.

The primary goal of the initiative is to equip owners and franchisees — whether the owner of a single Country Inn & Suites by Radisson or an owner with a portfolio of hotels across multiple brands and countries — with standardized tools and information that helps them to apply for, open and operate their Radisson Hotel Group properties with greater ease.

“We continue to look at all the investments we are making through the lens of our owners and franchisees and this new platform allows us to dramatically standardize, digitize and automate our owner, franchisee, and global sales engagement model,” said Ken Greene, Radisson Hotel Group president, Americas, in a company statement. “We look forward to continuing our collaboration with Accenture to improve efficiencies across the company and fuel our future growth plans.”

As part of the project, the company, working in partnership with global consulting firm Accenture, helped develop “Community by Radisson Hotel Group,” an owner / management facing website that provides a more personalized, cross-functional approach to improve the owner and franchisee experience. The solution helps owners and franchisees to easily and consistently onboard hotels, maintain brand standards, and respond to sales opportunities.

The new solution is designed to consolidate the franchise-owner touchpoints into a single portal that provides standardized processes for operational effectiveness. “The single-platform solution gives our franchisees the ability to analyze, consolidate and segment system data to personalize the right experience at the right time, enhancing their decision-making capabilities and enabling them to respond more quickly to ever-changing guest expectations,” said Aly El-Bassuni, Radisson Hotel Group senior vice president of Franchise Operations, Americas, in a press statement.

Last month, as reported here, Radisson Hotel Group launched its new multi-brand and mobile-first global website, RadissonHotels.com. The website also serves as the unique platform for Radisson Rewards members and is the focal point of the group’s new multi-brand approach to hospitality under the Radisson Hotels umbrella.

The launch of the new website as well as its new guest-facing app are part of the company’s five-year strategic plan, announced last year, which includes a strong digital transformation component, including investments into new platforms and technology.

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