Why data and analytics should be ruling the travel roost
Back in 2009, Ian McCaig (then the CEO of Lastminute.com) was quoted as saying, “the best marketing channel for us at the moment is in analytics.” At the time, that statement was rather bold. But now, in 2012, how perfectly this rings true with more and more businesses allocating time and spend to data and analytics strategies.
Almost every major travel business is now engaged with data and analytics on measured levels. Most have data practices across areas like revenue management, network planning and inventory management. However, it is often the case that these applications are not fully integrated into other parts of the business. For example, when it comes to things such as ancillary and customer data, which is not made available for revenue managers to help influence their pricing decisions.
Greg Land of IBM was quoted last month saying, “Today, travel companies should be utilising advanced analytics to better understand their customers’ needs and preferences…enabling them to grow, retain and satisfy the increasing expectations of today’s travellers.” Despite this, only 20% of retail and marketing execs surveyed by Mashable.com for their recent infographic are actively engaging in big data. 38% of the same group surveyed had only heard the term in the last twelve months. One can bet a bottom dollar some of those surveyed were travel companies. Here’s why:
Travel businesses often offer complex, multi-level service products with inventories that move around the globe (car hire or cruise are good examples). On top of this, almost all car-hire, hotels, airlines, cruise and OTAs also use dynamic pricing. This dictates that travel business models are sometimes harder to manage than normal retail, even with excellent solutions available on the market.
Despite this, EyeforTravel research shows that most travel businesses are hungry for better data and analytics in order to better forecast, predict and price. Some areas of interest include:
• Customer sentiment and behaviour tracking
• Loyalty scheme information and sharing across the company
• Personalized marketing messages to smaller, targeted segments
• Traffic patterns and the route to booking (where are people going before, during and after they are on your site)
• GPS and mobile data: how to use it and profit
• Social media advertising, feedback and interaction data
The demand list above shows that the types of data being stored by travel companies is increasing in vast complexity. Data sets now include aspects such as video, content, email, social media profiling, and these are now simply not able to be “kept in house,” in internal systems. More and more organisations are turning to the cloud, and with the cloud comes better analytic and data extraction. It came as no surprise that Google has built BigQuery, which can analyse huge sections of data (in their words, “up to billions of rows,”) almost instantly, on-demand.
In EyeforTravel’s recent discussions with CIOs, VPs Analytics and Directors of CRM, Revenue and everyone else in between, they have found that there are a number of challenges which come under the header of both big data and advanced analytics.
Rosie Akenhead, Director of Industry Analysis at EyeforTravel says, “Besides the consolidation and data sharing issues, most of our talks led to discussions such as extracting social media data, hiring superior data analysts, better segmentation and real-time data capabilities. This space is incredibly exciting for travel with personalization, user experience and being customer-centric all now at the core of most travel businesses.”
There is much to gain and much to learn in the data and analytics space for travel. Brands to watch out for include IHG, Hilton, United Airlines, Travelocity, Google, Priceline, Fairmont Raffles, Carlson Wagonlit and more. All of these travel companies are thinking out of the box and are achieving extraordinary data results across a number of fields. For more information on what these brands can show you, visit www.eyefortravel.com/analytics.