Where and how ‘big data’ is beginning to deliver tangible results

The travel industry has grappled with making the most of ‘big data’. However, even as they continue to learn how to leverage it, there are signs that use cases are starting to emerge. EyeforTravel’s Ritesh Gupta takes a look.

Big data has thrown significant adoption challenges in the path of the travel industry. So any sign that big data is delivering tangible results is seen as positive and it remains high on the agenda of those responsible for it.

It is clear, however, that every sector of the industry has a particular focus. For instance, supply chain logistics has always been a natural home to cost-oriented data analytics. The cases that one comes across in the travel sector generally are more around revenue, says Adam Turnbull, director of distribution operations, Rail Europe. This might be down to the fact that where the costs are most significant, like on the carrier operations side, players have already eked out a lot of reductions, and increasing volumes of data there are perhaps offering only marginal returns.

“So in so far as companies are getting most excited about the revenue opportunities, the use cases heard about mostly are in areas like targeting, up-sell and cross-sell recommendations, airport or in-flight retail, loyalty management, CRM and so on,” says Turnbull.

The data that is powering these applications comes from a range of sources: both from previously unconnected systems within the organisation and from new data sources like mobile location data, social media feeds, and so on.

According to Turnbull, it is likely that these use cases have the same theoretical underpinning. “That underpinning is really a full shift from operating our analyses at the macro level to the micro level. Where previously, we had to derive a model from limited available data -- to extrapolate from a sample to the population at large, to profile and segment behaviours - we can now operate without that loss of fidelity at the individual level,” he says. This allows firms to personalise the marketing message as well as in-travel customer service and cross-sell recommendations and so on.  

Opportunity knocks

Kelly McGuire, executive director, Hospitality and Travel Global Practice, SAS Institute, says there are two broad areas of opportunity for organisations to leverage their big data with analytics that deliver better decisions faster.

1. The application of big analytics is in real-time decision-making. Analytic results are operationalised and delivered at the point of contact - whether to a line level employee, a kiosk, a mobile device or a browser. “You can achieve that ‘nirvana’ of personalisation – delivering the right content in the moment that will encourage your guest to take the right action – be that a conversion, upgrade, or purchasing additional products, says McGuire.

2. To facilitate scenario testing. While you may not need to have answers instantly, there’s certainly benefit in answers that come back in hours or minutes rather than days. Faster analytics means more time to adjust parameters and rerun the analysis. 

With solid results delivered at the speed of business, organisations can not only be more confident in decisions, but more nimble and agile to respond to challenges and opportunities. “With multiple runs, you have the opportunity to find the best possible answer considering all of your options, or to fully understand the impact before you make a decision,” she says. 

According to McGuire revenue management is a good example of where this opportunity has a big impact. “Today, if a revenue manager suspects that demand patterns will be different than forecasted or a price isn’t right, they make an override and have to wait until the next time the system optimises to see the impact,” she says. With big analytics, revenue managers can ‘what if’ on the fly – testing out multiple options and then instantly seeing the impact.  

Encouraging signs  

McGuire cites some examples of where ‘big data’ is delivering for the travel industry:

1. Improving the website experience: McGuire says most notably because it’s so core to their business, many of the online travel agencies are looking at click-stream data from website interactions to help improve the user experience, and ultimately increase conversions. 

“They are mining that information to determine where users are abandoning sessions, and testing redesigns that improve usability and ultimately increase bookings,” she says. “This use case has extended into the digital strategy of bricks and mortar businesses as well. One can see hotels, casinos and airlines leveraging real-time analytics with click-stream data to deliver content on the webpage based on user profiles and current browsing behaviour. Most companies are in the early stages, but the value is definitely there.”

2. Pricing it right: Analytics has helped in pricing and overall improved business decisions. McGuire has seen strong evidence that user generated content (UGC) has an influence on consumer price perception. This is another source of big data that fits all of the characteristics. UCG creates volume over a set of competitors - hundreds of reviews, across dozens of channels. There are also many different types of UGC from unstructured tests to scores to Trip Advisor Ranks. Finally there is volume – dozens of reviews added each day causing competitors to change prices frequently. Analytics will not only be needed to interpret UGC, but also to determine how it needs to be incorporated into the pricing decisions. 

3. Optimising for maximum response: This is beginning to be used by marketing departments in hospitality and travel companies and large hotel chains have started applying optimisation to the process of creating contact strategies for campaigns. This way marketers can avoid issues like over- or under-contacting customers, budget overspending and so on. “Marketing Optimisation lets you set a goal for the problem like maximising response rates or minimising costs, and it will give you the best contact strategy to meet your goal, given your set of constraints,” she explains. Not only does this save time, but it results in large lifts in promotion response rates and can ultimately drive revenue.

To hear more insights about how big data and analytics can deliver for your business join us at the The Smart Travel Technology Show in Boston (Oct 22-23) where Adam Turnbull, director of distribution operations, Rail Europe will be speaking. 

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