Big Data, A Game-Changer For Travel And Hospitality
New and innovating technologies such as big data and the Internet of Things (IoT) are reshaping the travel industry. With tons of data collection, managing them effectively and breaking the own data silos to develop the most comprehensive - and personalized - picture possible of the travel customer seeing as the number of priority for travel and hospitality CIOs, the key question for travel companies now is: how can they leverage their strengths to take part in this innovation so they can maintain and strengthen their position in the consumer’s travel experience?
According to a report, titled: Travel Innovated: Who Will Own the Customer? released by The Boston Consulting Group (BCG), there are three areas are ripe for innovation and disruption over the next several years: travel inspiration (the first vital phase of the travel journey), booking transparency, and unmanaged business travel. The speed and extent of change in each area will be determined in part by how and how much traditional travel companies, technology companies, and start-ups interact in areas such as sharing data and co-investing in shared infrastructure.
BCG which interviews with more than 30 visionary thinkers (including travel company CEOs and CIOs, start-up CEOs, and others) in North America, Europe, and Asia, and concludes that travel companies and their technology vendors should change the way they look at the marketplace and approach the consumer. “It will require playing offense as well as defense, developing new capabilities, and learning to leverage their strengths to innovate or to work with others. Most of all, it means putting consumers first,” said the report authors, who believe using big data and predictive analytics to optimize the timing of bookings and offer greater flexibility in travel will lead to greater profitability.
Sean Collins, a partner of BCG Digital Ventures and a coauthor of the report. “One is the personalization of travel — providing the ability for customers to customize travel itineraries more easily. We expect that new inspiration and booking sites will marry data with predictive analytics to tailor recommendations and provide concierge-style packages. Another area is better integration across the travel journey. Back-end technology tools will improve integration across modes and providers, creating a more integrated experience for the consumer along every step of the travel journey.”
Similarly, an eMarketer report sees a huge potential in the internet of things (IoT), which is creating exciting opportunities for the travel and hospitality industry. By connecting smart devices, systems, processes and people in new ways, it is streamlining the back-end operations of airlines, hotels, resorts, cruise lines and rental car fleets.
At the same time, data from these connections is helping marketers deliver more personalized campaigns and enhanced traveler experiences. Simply put, the IoT is helping this highly competitive and schedule-driven industry turn information into action, as explored in a new eMarketer report, “The Internet of Things: What Travel and Hospitality Marketers Need to Know Now.”
As technology becomes cheaper and more powerful, much of the innovation has shifted toward enabling these smart devices and systems to communicate with each other and with larger systems. Many travel and hospitality brands already have some IoT functionality in their back-end operations and are experimenting with ways to put the technology to work for customers. With potential to transform nearly all aspects of the travel experience, the IoT will enable these companies to collect and integrate large data sets from different sources and instantly personalize traveler experiences.
Travel and hospitality companies are under constant pressure to provide better service at the lowest possible cost. For this reason, they have been early movers with the IoT, at least by some accounts. According to an April 2015 study by Tata Consultancy Services (TCS), the industry topped the list with regard to current IoT spending per company.
The firm reported that industry executives worldwide expected their organizations to spend an average of $128.9 million each on IoT initiatives in 2015, or 0.60% of revenues. Big Data analysis is all the rage in big business today, and there’s an ever growing choice of platforms that companies can feed their data into to churn out business insights they might otherwise have missed.
Ann Smarty, Brand and Community Manager at Internet Marketing Ningas, stated in her blog, “The key to using big data for any industry is having a solution or analyst who can develop actionable strategies to increase profitability. Otherwise it is just a bunch of data without someone who knows what to do with it.”
She believes while some of these tools might be flexible enough for a hotelier to use, it certainly wouldn’t be easy, and the vast majority of these platforms are tailored for specific industries anyway. There are some exceptions of course. SnapShot, for example, has come up with a platform designed to specifically analyze hotel data, or at least not until now. Slated for general availability later this year, SnapShot’s solution is designed to integrate seamlessly with hotel’s existing customer relationship management (CRM) systems so hoteliers can easily keep track of things such as rates comparison and trends.
Though technologies such as big data and IoT are in its early stages of adoption in the travel and hospitality sector, with efficient use of big data, IoT solutions, airlines, hotels and reservation sites can make the most of data to improve booking ratios, boost revenue yield and improve customer satisfaction.
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