Forecasting the future

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Forecasting the future

  1. 1. Forecasting - Does it still work? EyeForTravel November 29, Prague Kate Varini, Oxford BrookesLarissa Koupriouchina, Hotelschool The Hague
  2. 2. How many twists?
  3. 3. How many twists?
  4. 4. Uncertainty is different
  5. 5. Uncertainty is different
  6. 6. Black swans are on the increase See the video clip herehttp://www.youtube.com/watch?v=BDbuJtAiABA
  7. 7. Speed of transactions
  8. 8. ❖ Mobile web access from smartphoneswill surpass traditional PCs by 2013(Gartner Research)❖ 1,200 % increase in 2011 of travelcategory searches via mobile device2011(Google)❖ 3,000 % increase of hotel searcheson Google Maps (Google)❖ Mobile bookings are expected toexceed $160 million during 2011(PhoCusWright)Speed of transactions
  9. 9. Flash sales are moving from niche to mainstream distribution channel
  10. 10. Low cost competition
  11. 11. Budget hotels in top 6 Chinese cities
  12. 12. Increasing population
  13. 13. Climate change
  14. 14. Traditional segmentation doesn’t work
  15. 15. Traditional segmentation doesn’t work
  16. 16. Managing complexity• Signal detection• Contingency planning• Managing black swans?
  17. 17. 5 Top Lessons fromforecasting research 1. “Simple” models do not necessarily fit past data well but predict the future better than complex or sophisticated statistical models. 2. Both statistical models and human judgment have been unable to capture the full extent of future uncertainty.
  18. 18. 5 Top Lessons fromforecasting research 3. Expert judgment is typically inferior to simple statistical models. 4. Forecasts made by experts are no more accurate than those of knowledgeable individuals. 5. Averaging the predictions of several individuals usually improves forecasting
  19. 19. Judgmental forecasting Conventional wisdom Empirical findings The amount of information doesThe more information we have, not improve the accuracy,the more accurate the decision instead it increases the confidence Monetary rewards and Human behavior is too complexpunishments contribute to better to be motivated by monetary performance factors alone In many repetitive, routine Experience and /or expertise decisions, experience and/orimprove accuracy of decisions expertise do not contribute to future-oriented decisions
  20. 20. Forecasting by experts
  21. 21. How to deal with

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