{"id":33747,"date":"2018-11-13T17:12:34","date_gmt":"2018-11-13T22:12:34","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/jetblue-machine-learning-may-help-you-book-your-next-vacation\/"},"modified":"2018-11-13T17:12:34","modified_gmt":"2018-11-13T22:12:34","slug":"at-jetblue-machine-learning-may-help-you-book-your-next-vacation","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/at-jetblue-machine-learning-may-help-you-book-your-next-vacation\/","title":{"rendered":"At JetBlue, machine learning may help you book your next vacation"},"content":{"rendered":"

More options, more complexity<\/strong><\/p>\n

You have just made the exciting decision to plan a summer vacation. Your immediate next steps are to choose a destination and book flights. There are many factors to consider \u2013 which dates can you travel? What types of destinations do you prefer? Do you have budget constraints?<\/p>\n

As the airline industry continues to grow, there is an ever-expanding abundance of options and decision points around booking travel. While these options create new possibilities for customers, they can also make planning a vacation a daunting and time-consuming task. In fact, recent research suggests that around 43% of leisure passengers and 51% of business passengers want to spend less time researching flights [1].<\/p>\n

Role of machine learning in itinerary planning<\/strong><\/p>\n

How might an airline save customers the time \u2013 and, potentially, stress \u2013 associated with this research? JetBlue, an airline that prioritizes technological innovation throughout its business, is leveraging machine learning to predict customer behavior in the itinerary planning process and offer personalized flight and vacation recommendations. Last year, JetBlue announced a partnership with Utrip, a destination discovery and planning platform that helps travelers create a highly personalized vacation itinerary in minutes. The portal \u201cuses artificial intelligence and locally curated recommendations to save customers the legwork that planning a vacation requires.\u201d [2]<\/p>\n

 <\/p>\n

\"\"<\/a>
Innovative booking platform uses customer inputs to provide personalized trip recommendations [2].<\/figcaption><\/figure>\n

JetBlue can access rich passenger data and combine it with machine learning to profile customers and predict future behavior. In 2017, researchers from the Amadeus Research and Innovation Division conducted an experiment demonstrating how this machine learning process might occur. They also compare the effectiveness of machine learning to algorithms more traditionally used to predict itinerary choices. The experiment and resulting findings are outlined below [3]:<\/p>\n

    \n
  • Training<\/em>: The team used a dataset of ~27K choice situations to train the model (each situation contains a search, between 1 and 50 itinerary options, and the option actually booked by the customer)<\/li>\n
  • Testing<\/em>: Another ~7K choice situations were used for testing. The algorithm ranked various features on their importance to customers (e.g., price, connections, trip duration, arrival and departure times). Segmenting business and leisure travelers was an important step, as behaviors differ significantly between these travelers.<\/li>\n
  • Findings<\/em>: The machine learning model yielded better performance in predicting bookings than the traditional algorithm, primarily due to its ability to allow non-linear modeling of a high number of variables.<\/li>\n<\/ul>\n

    JetBlue\u2019s focus on innovation<\/strong><\/p>\n

    As airlines continue searching for ways to differentiate themselves and retain valuable customers, personalization of the passenger experience is becoming an important initiative that can be enhanced through machine learning. JetBlue has designed its organization to align focus on this priority and ensure the company remains an industry leader in technology innovation more broadly.<\/p>\n

    Chief Digital and Technology Officer Eash Sundaram explains that, while the digital function used to be split between commercial and technology, it is now a blended organization, reinforcing the linkage between technological innovation and customer experience. In addition to his executive role, Sundaram leads an innovation lab and serves as the Chair of JetBlue Technology Ventures \u2013 a subsidiary established by the company in 2016 to identify, invest in, incubate, and partner with innovative startups in the areas of artificial intelligence, predictive analytics, and other emerging technology. These recent bold moves reflect JetBlue\u2019s and Sundaram\u2019s commitment to building the next generation of customer experience [4].<\/p>\n

    In an increasingly cost-focused industry, JetBlue must now consider the resources it will devote to technological innovation over the next decade. While the organization appears to be designed for success structurally, the talent it continues to recruit will play a critical role in the success of innovation initiatives. For instance, few airlines today are hiring data scientists; recruiting this talent from across industries could unlock substantial value for JetBlue, especially if it does so before other airlines and gains a first-mover advantage [5].<\/p>\n

    Future impact on air travel<\/strong><\/p>\n

    As machine learning continues to advance, and as it enables airlines to profile customers in ways they were unable to do previously, a world of hyper-personalization in the near future does not seem out of the question [5]. Beyond customized itineraries and vacation packages, could airlines offer personalized pricing at the customer level? What challenges might arise with machine algorithms \u2013 for instance, bias leading to unintended passenger discrimination \u2013 that would need to be considered from a regulatory perspective?<\/p>\n

    Even with these unknowns, machine learning will be an important component for JetBlue going forward as it strives to create a personalized, streamlined customer experience. As Umang Gupta, President of JetBlue Vacations, points out, \u201cWhen you hear artificial intelligence, it\u2019s easy to envision a far-off future seen in the movies. . . But AI is ready to change how we now plan travel\u201d [2].<\/p>\n

     <\/p>\n

    (Word Count: 777)<\/p>\n

     <\/p>\n

    Sources:<\/p>\n

    [1] Harteveldt, Henry H. \u201cThe Future of Airline Distribution, 2016-2021,\u201d 2016, written by Atmosphere Research for IATA, [https:\/\/www.iata.org\/whatwedo\/airline-distribution\/ndc\/Documents\/ndc-future-airline-distribution-report.pdf], accessed November 2018<\/p>\n

    [2] \u201cJetBlue Vacations and Utrip Launch Artificial Intelligence-Based Trip Planning Portal,\u201d press release, June 13, 2017, on JetBlue website [http:\/\/mediaroom.jetblue.com\/investor-relations\/press-releases\/2017\/06-13-2017-141427979], accessed November 2018.<\/p>\n

    [3] A. Lheritiera, M. Bocamazoa, T. Delahayea, R. Acuna-Agosta. \u201cAirline Itinerary Choice Modeling Using Machine Learning,\u201d March 2017, [http:\/\/www.icmconference.org.uk\/index.php\/icmc\/ICMC2017\/paper\/viewFile\/1178\/393], accessed November 2018.<\/p>\n

    [4] High, Peter. \u201cJetBlue\u2019s Head of Technology And Digital Also Runs The Company\u2019s Venture Arm,\u201d September 2017, Forbes<\/em>, [https:\/\/www.forbes.com\/sites\/peterhigh\/2017\/09\/05\/jetblues-head-of-technology-and-digital-also-runs-the-companys-venture-arm\/#33554cf96e48], accessed November 2018.<\/p>\n

    [5] R. Boin, W. Coleman, D. Delfassy, and G. Palombo. \u201cHow airlines can gain a competitive edge through pricing,\u201d December 2017, McKinsey<\/em>, [https:\/\/www.mckinsey.com\/industries\/travel-transport-and-logistics\/our-insights\/how-airlines-can-gain-a-competitive-edge-through-pricing], accessed November 2018.<\/p>\n","protected":false},"excerpt":{"rendered":"

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