While traditionally, forecasts are predictions based on past and present data supported by trends analysis, this model has lost its relevancy due to an unprecedented global crisis that changes one day, one government at a time.
With information that can become overwhelming and confusing, data company ForwardKeys built a new AI-powered algorithm that bases its forecasts not on historical trends, but on the scheduled airline capacity and future bookings to make a reasonable estimation of the number of people that will really travel.
"We get many questions for forecasts of the total number of travellers, given that businesses often must make decisions on selecting the right airports and terminals to launch a new product or to find the best touch-points to target specific nationalities," said Jérôme Goldberg, retail & travel retail customer success manager.
Here are two quick tips.
1. Be specific about your business needs
The first question is what do you really want to know? In some cases, forecasts and future-looking data are used interchangeably, even though we are talking about two quite different things.
For example, at ForwardKeys we continually monitor if certain policy decisions result in a change in demand, like whenever the UK puts a destination on the amber or green list. In this case, we look at our Actual Air Tickets and “On the book” data, as these include future bookings and give an immediate overview of the impact.
Another option is to examine the future scheduled airline seat capacity as a proxy for future travel, given that this is what planes the airline companies are planning to fly, when and where to. A pandemic challenge, however, is that airlines have been extremely fast in changing their flights depending on the current demand, which makes it unreliable as a long-term forecast method.
2. K.I.S.S and make it better with one comprehensive data provider
The boom of data providers has not simplified the matter of picking the right fit for your business needs. That is why the K.I.S.S (Keep it simple, stupid) principle is a sage strategy to follow – data providers and data itself should make your life easier, not harder.
A PDF on the methodology can be downloaded here.