Dr. Rik van Leeuwen, Head of Data Solutions and Customer Success at Ireckonu, has just uncovered the hospitality industry’s first ever methodology for customer churn management.

The historic study, conducted in collaboration with one of the top North American chains, uses artificial intelligence (AI) to determine the very moment the guest is most likely to drift away—and how hotels can intervene to prevent them from doing just that.

The study outcomes confirm that predictive models powered by artificial intelligence are able to effectively calculate the risk of a guest exiting, allowing hotel managers to take action at the point of the moment. The proactive action might involve the issuance of a discount offer, for instance the issuance of the 20% discount email, once the guest has reached 75% churn risk.

These last-moment offers greatly favor the chances of rebooking, hence enhancing the general guest retention figures.

This breakthrough is the result of the culmination of a multi-week research project combining artificial intelligence, machine learning, and advanced data modeling techniques to yield usable insights for hospitality operations. The framework is focused on predicting customer behavior, identifying risk of churn, and providing tailored recommendations for optimizing retention efforts.

The Power of Hospitality Through the Assistance of AI: Evolution from Forecast to Execution

It’s not just about identifying at-risk guests, but more about intervening at the right time. Dr. van Leeuwen identified the importance of not just knowing who is at risk, but knowing the time and how to intervene. “It’s no longer enough to know who’s at risk.

The value is in knowing how and when to react,” added Dr. van Leeuwen. “That’s where hospitality strategy gains the promise of AI.”

The Dr. van Leeuwen system combines the BG/NBD (Beta-Geometric/Negative Binomial Distribution) model for churn probability with reinforcement learning for future engagement.

The BG/NBD model, in general use for subscription and non-subscription companies, anticipates the probability of repeat purchasing by the customer in the future. By including reinforcement learning, the model by Ireckonu doesn’t just anticipate churn by the customer, but determines the best actions to take, allowing for in-the-moment adjustment based on evolving guest behavior.

Unlike traditional “black box” type artificial intelligence systems, in which interpretability is difficult and implementation in routine business environments is complex, Dr. van Leeuwen’s approach emphasizes transparency and flexibility. The model is designed to be a “white-box” system in the sense that managers in the hotels will understand and rely on the system recommendations based on the used data.

Transparency in this context is the driving factor behind adoption in the hospitality industry, where operating decisions have to be efficient and implementable.

From the Lab to the Field: The Practicality of Ireckonu’s Solutions

Ireckonu has already started integrating these learnings into its broader middleware and customer data platform offerings, allowing hotel chains and other hospitality offerings to deploy AI-drived guest retention approaches at the point of operation. The platform integrates seamlessly with existing hotel management systems in operation, allowing businesses to deploy immediate, data-driven action whenever the system recognizes a guest as being at risk.

“We’re not just pushing academic theory” said CEO of Ireckonu, Jan Jaap van Roon. “Rik’s research brings scientific validation to one of the areas where hotels have long underperformed: guest loyalty. That’s not theory—it’s proven, practical insight. And it’s the kind of innovation we promote at Ireckonu.”

The study’s results have universal applicability to the hotel industry and beyond. The company is exploring how to further optimize the model by incorporating additional variables, such as sentiment and dynamically changing the price in response to the customer’s specific churn risk in coming developments of its AI-powered solutions.

Prospects for Future Development and Applications

For the future, Dr. van Leeuwen’s research opens promising opportunities for further refinements to the artificial intelligence model. One potential area in the future where one might realize developments is in the integration of qualitative guest commentary, e.g., customer review sentiment analysis, to the churn forecasting model. By considering not only the quantitative measures but the emotional and experience facets of the guest’s experience, the model would have the potential for even more accuracy in recommendations for retention efforts.

Furthermore, the AI framework developed by the study has the possibility of being extended beyond the hotel industry. Other areas where high frequency, non-contractual customer interactions occur, i.e., retail and services, would be able to utilize corresponding churn prediction models to maximize customer interaction and retention efforts.

Ireckonu’s ongoing investment in research and development is evidence of its dedication to delivering the hospitality business more intelligent, more tailored guest experiences. By utilizing clean, actionable guest data, the company is helping hotels make more effective retention activities and in the end offer the customer service they desire.

Conclusion:

The Future of Hospitality is AI-Driven As the hotel industry becomes increasingly dependent on artificial intelligence and data science to maximize guest retention, Ireckonu’s research sets the standard in churn management. Identifying the exact moment the guest is most likely to disengage, and providing hotels with concrete action steps, Ireckonu is rethinking the way hospitality businesses approach guest loyalty. This breakthrough shines the spotlight not only on the promise of artificial intelligence for the hospitality profession, but also the worth of marrying cutting-edge research with in-the-field application.

The hospitality future will be guided by more informed, data-driven decisions—decisions that maximize the guest experience, enhance guest loyalty, and achieve long-term business success.