The US hospitality industry is one that is fraught with risks even in the best of times. In the United States, the hospitality sector consists of four main segments- Food and Beverage, Travel and Tourism, Lodging, and Recreation, all of which contribute a significant share to the global economy. With the coronavirus pandemic spreading widely across the United States, the situation for these four major sectors and other businesses within the sector may soon become dire. Social distancing and other measures taken by the government as a precautionary measure to tackle the pandemic have severely impacted the US hospitality industry among the others, which is now seeking government aid to stay afloat.
As COVID-19 spreads globally, there is a strong potential that the tourism and hospitality sector will suffer a devastation blow. The impact has already been felt in the regions where COVID-19 has struck first, Request for a free proposal to learn more.
According to Quantzig’s advanced analytics experts, “The US economy will likely be stable when people and businesses are convinced that the virus is no longer a big problem. Even when that happens, the fact that the outbreak of another pandemic can impact global processes significantly will drive the need for a robust contingency plan.”
How the US Hospitality Industry Can Get Back on Track?
The rise in global consumer purchasing power, a strong economy, and technological advancements have all contributed to the growth of the US tourism and hospitality industry in 2019. But several challenges, like the ones arising due to the current global scenario, could throw the industry off track this year and the year ahead. To stay prepared, one must understand the biggest trends and challenges likely to shape the tourism and hospitality industry in the year ahead. However, this alone would not suffice, and detailed analysis and recovery plans are crucial for the US hospitality industry—especially so when facing an issue like COVID-19. So, what can the US hospitality industry learn from this downturn, and what can be done to stay afloat?
1: Analyze Demand Disruptions and Forecast Overall Profits
For the US travel and hospitality industry, the first blow due to the COVID-19 was felt via an increase in the number of cancellations for both events and global travel. To bounce back, businesses must first assess their position and develop a contingency plan that covers different aspects of demand disruptions. For businesses that operate in the travel and tourism industry where a majority of their profits originate from different markets, it’s essential to leverage a balanced portfolio by tweaking their marketing mix strategy.
Since demand disruptions are an ongoing process, those operating in the US hospitality industry must review their marketing mix periodically and leverage advanced marketing analytics to gauge the magnitude of impact in terms of MROI. Once you get back on track, you can then proceed to develop impactful marketing campaigns to create new incentives for travelers from alternative markets.
Talk to our analytics experts to figure out why an analytics backed contingency plan is a must have in this scenario.
2: Decode Historical Data Sets and Adjust Pricing Strategies
Demand forecasting typically relies on decoding data sets to project future trends. However, owing to the unpredictability in the markets and its impact on the overall business performance, future projections will likely need to be modified to account for the confounding circumstances. Leveraging pricing analytics to adjust pricing strategies can help businesses adjust prices sensibly and not just to achieve short-term benefits.
What’s also crucial is that the US hospitality industry is poised to face more challenges and risks in the future, to tackle them businesses must keep a close watch on their competitor’s pricing strategies and instigate price cuts in relation to the current market scenario that they operate in. Deploying advanced revenue management systems and data models that analyze what-if scenarios can help the US hospitality industry devise a ‘plan B‘ to make the right decisions on price changes and promotions.
3: Radical Overhaul using Predictive Analytics
Predictive analytics revolves around the use of a combination of advanced machine learning algorithms and natural language processing to predict future scenarios and outcomes. Most of the businesses today employ recommendation engines that help them estimate the demand for products using AI-driven insights. The hospitality industry also has benefited from such innovations lately, prompting hospitality service providers from different segments to deploy predictive analytics to anticipate customer preferences.
The ongoing advanced in AI and predictive analytics will help hospitality companies to scale up operations and create unique offers and experiences that appeal to the needs and desires of every traveler. Besides, predictive analytics can be leveraged to build loyalty programs and offer personalized recommendations that span all touchpoints and marketing channels.
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With the ongoing advancements in technology and analytics, it’s crucial to note that to get the most out of your business data, you need a centralized system that collates, analyzes, and decodes data to enhance customer satisfaction, personalize offerings, and drive ROI.