Royal Caribbean Leaning on AI to Manage Pricing More Effectively

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Royal Caribbean Leaning on AI to Manage Pricing More Effectively

Royal Caribbean International is looking to artificial intelligence (AI) to help manage the millions of price points it offers.

“Even within each ship there are multiple inventory types ranging from a typical interior cabin, the most basic stay, to areas that can hold up to 12 people and are over 1,000 square feet,” Michael Goldner, Vice president, Revenue Management, Royal Caribbean International, told Hospitality Net.

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For a long time, inventory has typically been managed manually by a team of revenue management analysts. However, it’s appearing more likely that, in the future, these analysts will be managing controls to change the price rather than relying on a system to manually change it.

“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,” added Goldner.

Royal Caribbean has worked with strategy firms Boston Consulting Group (BCG) and Accenture to learn more about what opportunities exist and how AI can help the cruise line take advantage. Segmenting customer groups is one such way.

“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 told Hospitality Net. “The answer is [probably] somewhere in the middle and we are getting comfortable with it slowly.”

Analyzing the flexibility of pricing is another key step. “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,” he added.

Royal Caribbean has hired four data scientists and a senior vice president of AI tasked with building an entire team and department to advance the project.

Goldner will be one of many speaking at EyeforTravel North America 2019 in Chicago later this month. The two-day event (October 28-29) will shed additional light on what’s becoming a wider cruise industry trend.