The Travel industry is thirsty to compete on value and innovation rather than on pricing. Will Big Data play a major role in this?
Even though countless blogs agree that “Big Data” is widely overrated, the truth is that this phenomenon has re-defined the winners and losers of many other industries. Textbook examples like Target in the US and Tesco in the UK validate the concept of being able to treat thousands of customers like a local shop owner would, with individual knowledge, tailored products and targeted advertising. All of this has happened thanks to Big Data and the ability to accommodate individuals’ preferences.
In this month’s webinar titled “Business Intelligence and Big Data in Travel Distribution” by PhoCusWright, an interesting question was asked during the Q&A session: Will it be possible for travel companies to create continuously increasing demand rather than constantly fighting for existing market share through pricing? The answer for many industries is definitely yes, with players like Apple leading the innovation front, waving the big innovation flag and providing products that people want rather than need and buy at a premium price.
For the travel industry however, these are very early days. A survey conducted during the registration for this PhoCusWright webinar revealed that “nearly half of participants were unable to use price and availability search data to make business decisions”, that’s out of 500+ participants in the travel industry.
So why is this?
According to Bob Offutt, Senior Technology Analyst and Innovation Editor at PhoCusWright & ex Senior Vice President of Sabre Holdings: “It’s going to take time to modernize the messaging feeds, to put them at a point where they can be analysed, (for this to happen) the current mind-set has to change and evolve from capturing transactional data to also capturing shopping intelligence & conversion insight and then, the technology to collect that data as Kuoni has done with their XML is absolutely critical.. XML will play a big role in this evolution”. Bob also hinted that NDC, IATA’s new XML-based standard for distribution in the airline industry will push adoption across all the travel industry.
On the topic of product innovation, Bob stated: “Big Data allows precise segmentation of customers- well beyond loyalty programs which vary substantially in the understanding of customers. The travel industry has been focusing on the trip itself rather than specific characteristics around the travellers and their friends – implementing segmentation models will require substantial re-engineering of systems”.
Despite obstacles achieving standardized messaging and the need to re-engineer systems, there are some travel companies ahead of the game; companies such as Kuoni Group’s GTA.
Chris Anders, VP of Global IT Operations at Kuoni Group explained GTA’s Big Data evolution beginning in 1995 when they started collecting masses of data without really knowing what they wanted to get out of it. Now they use this intelligence far beyond the Operations department; it’s used for marketing, channel management, inventory management and soon it will also be used for revenue management.
Chris stated “Per day, I don’t know how we would run the IT Operations piece without the intelligence that we have, it’s just invaluable. The more business intelligence you have, the more you realise the value of it and the more you want…”
So what about RoI?
Bob Offutt mentioned that Thomas Cook Netherlands identified €3,000,000 of lost revenue in three months and Triometric was quoted in other articles as having identified a lost opportunity of over $10,000,000 by a hotel wholesaler due to having “no availability” in popular hotel properties.
The culmination of PhoCusWright’s research was Bob’s vision of what the future holds for Business Intelligence and Big Data for travel. Besides better forecasts, cause and effect understanding, pattern identification and simulation, Bob highlighted how improved dashboards, self-service analytics being widely available outside of IT departments and real-time processing would allow companies to react rapidly to demand and supply. This message was affirmed by Chris Anders who echoed, “Our current dashboards are already there, they are dynamic, ever changing, drillable and in real-time, we can see bookings per minute, per hour, do trend analysis…”
Questions from the audience sparked around whether it was better to start big or small in regards to their Big Data strategy to which Jonathan Boffey, Business Development Director at Triometric answered “The trick with managing Big Data isn’t to become a squirrel that captures everything but really to decide what you need, when you need it and focus on getting that information so you can start taking action”.
(Article originally published by triometric)