19 Aug Why event visibility is make-or-break for airline demand forecasting + key events in September
No airline revenue analyst needs to be told events are major catalysts for demand. Almost every revenue analyst knows that sinking feeling when they realize one of their routes is selling out fast around a particular date because of an event but they’ve already missed the chance to adjust the fare class or inventory before most of the bookings were snapped up.
Advance knowledge is critical and your HSE list (holidays and special events) is not going to give your team a meaningful advantage. So how do you make events your secret weapon?
Some events are easy to see coming – a major sports game, a massive concert tour. But many events that draw tens of thousands of attendees from all over the world fly almost completely under the radar, such as conferences, expos and lower profile but still popular performers.
What matters is how well a revenue analyst can identify meaningful events in time to include events in your load factor assessments. Most existing forecasting processes identify event-generated demand spikes far too late in the booking curve, when the flights are already past 50% full.
There are hundreds of major impact events for airlines every week. Event visibility has a huge impact on RASM (revenue per available seat mile), but only if you have enough lead time.
Key events in September
Major impact events for airlines can be hard to track. Identifying their signal in your airlines demand patterns or network level demand patterns is tricky.
Our data scientists at PredictHQ identify a handful of the most important events each month. Here are their selections for September that will cause tens of thousands people to book flights.
|Event Name||Date||Location||Expected Attendance|
|Dornbirn Autumn Fair||4 – 8 Sept||Donbirn, Australia||73,500|
|ADA Annual Meeting||4 – 8 Sept||San Francisco, US||16,868|
|Habitare||11 – 15 Sept||Helsinki, Finland||60,000|
|Oracle OpenWorld||15 – 19 Sept||San Francisco, US||60,000|
|Rugby World Cup||20 Sept -2 Nov||Japan||1,000,000|
|INTERBOOT||21 – 29 Sept||Friendrichshafen, Germany||90,700|
|TCT Conference||25 – 29 Sept||San Francisco, US||12,000|
|European Respiratory Society International Congress||28 Sept – 2 Oct||Madrid, Spain||22,828|
From reactive to proactive – lead time is key
At the moment, most revenue analysts only become aware of an event 30 to 80 days in advance. For many analysts, the first time they review a flight in detail is after receiving an alert the booking curve is lower or higher than expected.
For the in-demand flights, this often means customers have already snapped up half or more of the relevant bookings. With so many flights to be calibrating the ideal load factor for, most will be focusing on the next month or three, not the batch of flights afterwards.
Of particular interest to airlines are the thousands of large professional conferences and expos held every year. For example, the BIO International Festival generates more than $16 million in seat bookings. It is on the smaller end of the large conference spectrum with only 16,000 attendees, around 6,000 of which are international. It changes location each year, from one major US city to another, so it can be very hard to identify ahead of time if you don’t know of it specifically. And there are at least 20,000 larger conferences very similar to it each year.
Another complicating factor is that many recurring events change location each time they take place – so an analyst may have unearthed a key demand spike on your route, but next time it’ll be on a colleague’s route. This means one team might be updating the inventory management and fare class plans for additional demand that never materializes, while someone else on your team is about to miss the demand spike in its new location. There are more than 5,000 major-impact recurring events each month worldwide.
All of this makes manual event tracking virtually impossible to do effectively. But as competition continues to rise for airlines, event visibility is something few can afford to miss out on.