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September 2014, New York
How Expedia is going fishing in the ‘big data’ lake of travel
It may not be what everybody wants to hear, but Expedia’s data driven approach is a serious business, writes Pamela Whitby
If you are chief technology officer of one of the world biggest travel technology companies, you have to be a man on a mission. Edmond Mesrobian, CTO at Expedia Inc is one such man, tasked as he is with delivering data driven decisions across a portfolio that features Expedia, Hotels.com, Hotwire and Venere.
With the avalanche of big data upon us, that task is a tough one. But with Priceline’s recent acquisition of OpenTable, which gives booking.com a much stronger lever with hotels, Google’s mysterious moves, and many hoteliers driving a harder bargain, it’s business critical.
While, somewhat sadly, corporate communications policy prevented Mesrobian from commenting on Priceline’s recent moves, other than to say that Expedia will continue to invest in the mobile space to help travellers on the go, he did share some insights into how the firm is leveraging ‘big data’ and analytics to become more personal and more competitive.
Of course, Expedia is not alone. From OTAs to hotels, airlines and metasearch players, firms across the travel space are looking at how to hone their strategic approach to big data and analytics.
The recent acknowledgement of Dara Brady, Ryanair’s head of online development, that “ultimately big data has changed the way they view the customer” speaks volumes. For the low-cost airline that built an empire from advertising revenues on its website, and not bums on seats, that may be a significant shift, but for travel tech company like Expedia making use of data isn’t (and shouldn’t be) new. What has changed, however, and across the industry as a whole, is the volume of data and the number people needing to access it.
“Across all our organisations there is a huge thirst to make data driven decisions. It’s no longer just the marketing guy or somebody in the analyst community or the guy doing business objects, it’s also the plus 3,000 developers we have today who want access to that data,” says Mesrobian.
In this environment where there is “far more aggressive consumption of data,” Expedia knows only too well how important it is to have the right analytical foundations in place.
Across all our organisations there is a huge thirst to make data driven decisions
Edmond Mesrobian, CTO at Expedia Inc
Pascal Clement, head of travel intelligence at Amadeus agrees highlighting that what’s important today is how organisations handle the avalanche of data and what they are doing to leverage it.
Expedia recognises this and is taking a three-pronged approach to tackle the issue, which throws up some lessons for others too.
1. Test and learn for better results
Everything Expedia does, says Mesrobian, is underpinned by the need to be able to measure the signals they are hearing in the market. “All our organisations have a voracious appetite to collect information, either to improve operational effectiveness (performance) or to use to change the behaviour of products, apps or APIs based on what they are seeing from the market,” he explains.
In order to do this effectively, Expedia has adopted test-and-learn approach and is applying this paradigm across the organisation. By doing multivariate and A/B testing on big and small issues alike, Expedia is able introduce a product idea and, according to Mesrobian, “get it asserted or refuted” very quickly across all of its major brands. This could be something as simple as testing whether green works better than blue in website design, or something at the more macro level such as wholesale replacement of search results.
In this environment, there is no single version of truth. It’s about testing hypotheses and applying the results.
2. Customise, personalise for a great travel experience
The second prong of Expedia’s approach is to use data and analytics to understand the customer better and give them a better engagement experience at all stages of the travel experience from search through to booking and then during the trip itself.
When you create a data lake, the big question is how do you go fishing in it?
But with such a large diversity of consumers, working out what the data really means, the point of conversion, and how that was computed is a major challenge.
“When you create a data lake, the big question is how do you go fishing in it?” says Mesrobian.
This is one area where hotels, or smaller niche agencies, can still aim to differentiate. Because while the marketing clout of online travel agents like Expedia and booking.com, coupled with clever used of big data and analytics, has given them much greater power over the consumer, in the end the hotels still own the customer relationship, can over deliver on service and truly add value while the guest is on holiday.
3. Deliver useful data to partners
The final, and according to Mesrobian most important, thread of Expedia’s strategy is to help partners be more effective in the market. And while many players feel threatened by the likes of online travel agents and Google, not all feel that way. In fact Nick Aristou from Four Seasons Hotels believes that the OTAs are perfect partners for hotels, providing that relationship is an open and communicative one. With analytics foundations in place that can scale to allow all kinds of customers to use it, Expedia believes it can truly benefit its business partners – and presumably its own bottom line!
By keeping and storing data within regulatory confines – for example every price computed for a particular hotel in a particular city over a period of time - can deliver a wealth of information to hotel partners. “From this we could tell them that over the past year your prices have had this effect in the market place; you typically showed up in 5th position,” explains Mesrobian.
All things to all men
In essence then, Expedia’s aim is to give all employees the information they need to do their jobs, to deliver consumers with information to make the right travel decisions and have a great experience, even while on the road, and to help partners to be more effective in the market place.
So you could argue that Expedia is trying to be all things to all men in highly fragmented market place. That isn’t easy and it requires access to data that is scientific, not personality driven, says Mesrobian.
What him makes laugh is the view that just because things like Hadoop, the open source software project, democratised the landscape and made it much more cost effective to store a petabyte or more of data, things got a lot easier.
“In fact, all the hard problems of how to make sense of the data, data warehousing, metadata management and so on haven’t gone away,” he says. “So in a sense, computer science reinvents itself but the same problems keep on reappearing.”
To find out more join EyeforTravel for the Travel Distribution Summit, North America featuring keynoter Edmond Mesrobian takes place in New York from September 11-12, 2014