Big Data - Shaping the Future of Travel


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Big Data Defined

 

"It is a term used to describe a massive volume of both structured and unstructured data that is so large that it's difficult to process using traditional database and software techniques."


Source: Webopedia
http://www.webopedia.com/TERM/B/big_data.html

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How Can You Make Better Customer-Focused Decisions?

 

CASE STUDY

British Airways

Faced with competition, British Airways (BA) focused on achieving a competitive advantage through customer insight.

BA has accumulated substantial customer information from its Avios loyalty program and its website, and incorporated this data into its customer data warehouse for analysis.

BA decided to put customer big data to work in its Know Me program. Its goal: to understand customers better than any other airline. The data was collected across tens of millions of touchpoints.

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Recognizing most loyal customers and showing appreciation through targeted benefits


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The program tracks services that it provides to customers so that BA understands what problems the customers are experiencing and provides the best response


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Through analysis of customer data, BA can target 'next best offers' for their customers' consideration


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Who is Lynda?

 

Meet Lynda Peters, a 29 year-old IT Architect, at the fictional insurance company Tranquilife.


The year is 2016, and today she is attending a business conference.


This is her experience of a day in the future of the travel industry.


lynda
 
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Explore

 

Seizing the potential of big data is not just about implementing technology. To make effective use of big data, organizations will have to change business and operational processes, decision styles, employee skills and corporate cultures.
The level of change may well be dramatic - but so is the potential benefit.


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Where Does Big Data
Come From?

Big data is often boiled down to a few varieties including social data, machine data and transactional data.

 

Transactional data

Typical transactional data including invoices, payment orders, storage records and deliveries

Where does big data come from?

Social Data

This can include data from social media services and functionality such as Facebook Likes, Tweets & YouTube views

Machine Data

This data can consist of information gathered from industrial equipment, real-time data from sensors and web logs that track user behavior online

Source: Business Intelligence Blog
http://biblog.arcplan.com/2012/03/big-data-faqs-a-primer/#more

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Is This The Future for Travel Management Systems?

 

After registering for her conference, all the logistics (city, hotel, beginning and ending times of conference) of the trip were automatically downloaded into Lynda's scheduling application.

They were then transmitted - again automatically - to the travel management system that Tranquilife had chosen.

 
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Research

Want to start getting involved with big data? Ask yourselves the following questions to give yourself an idea of the state of play within your industry at the moment:

 

What is the trajectory of Big Dat adoption and use within your segment of the travel business?

Are competitors adopting it?

Are customers beginning to use it?

Can you afford to be a follower rather than a leader in this area?

 
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How Can It Improve Revenue Management?

Revenue management is one of the most popular areas for the application of Big Data analytics.

 

CASE STUDY

Swiss Air

Swiss Air combined two organizational processes, making revenue management one integrated process.

This means that Swiss Air can now make fast pricing changes in real-time.


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CASE STUDY

Air France-KLM

Through big data, Air France-KLM's new revenue management system can estimate the likelihood of no-shows on flights, and thus know how much overbooking to allow.


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Are These the Itineraries of the Future?

Without any action on Lynda's part, she received her proposed itineraries with the following components:

 

A flight on Lynda's preferred airline, with a frequent flyer upgrade already arranged

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A hotel reservation for all the nights of the conference

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A self-driving rental car reservation at the airport

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How Can It Increase Financial Performance?

 

CASE STUDY

Hilton Hotels

Big data analytics can be used to assess the drivers of financial performance for the hotel and resort industries.

For example, Hilton Hotels introduced its 'Balanced Scorecard Hall of Fame', as way of measuring performance by focusing on the efforts of staff throughout the organization. Through this, Hilton was able to understand what factors drive organizational performance.

By accruing and analyzing figures from its scorecards over several years, Hilton was able to find significant correlations between customer satisfaction and loyal customer behaviors.


An analysis of data from 42 Hilton Hotels, over five years, showed a 5% increase in customer loyalty in a given year leads to a 1.1% average increase the following year.

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Strategize

 

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You need to consider what is happening with big data in the industry.

Where in the business is there a need for much better data and better decisions? Where is there already data that could be useful either internally or to customers, but is currently being ignored?

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What does Big Data Mean for the Travel Industry?

 

Big data uses the information that customers are already generating to provide travel companies with better, more targeted and customized (and ultimately more profitable) services and products

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How Can It Ease Search Processes?

 

CASE STUDY

Amadeus

Amadeus has also developed a customer service solution called Featured Results. Faced with a rising "look to book" ratio, the number of queries compared to bookings, Amadeus needed to find a way for travel distributors to make desirable offers to customers. Featured Results presents four possible itineraries in which consumers may be particularly interested.

A major focus of Amadeus' big data efforts involves easing the search process and presenting customers with targeted options.

One such offering is Extreme Search - whereby the customer enters information (overall budget, no. of passengers, length of trip, min temperature of destination) and is given a list of trip proposals.


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What is Big Data Analytics?

 
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"Big data analytics is the process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations and other useful information"


Source: Search Business Analytics
http://searchbusinessanalytics.techtarget.com/definition/big-data-analytics

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How Can Customization Improve Through Big Data?

Distribution has long been the area of travel in which computers, data and analytics have seen some of the greatest advances. One key trend within the distribution process is customization. This means that offers can be based on loyalty status, past behaviors or customer desires.

 

Through big data analysis, there are many possible future improvements to customization, such as:

Based on customer behaviors or absence of them: "We are sorry we missed you on your weekly Dallas-Chicago flight"

Based on schedule disruptions: "We are sorry to see that you missed your flight departure. Would you like a seat in first class for the 15:15 flight?"

Based on social media relationships: "Four of your Facebook friends have recently visited Bermuda, so we're offering you 20% off to try it for yourself"

Based on location: "We see you have just arrived in Frankfurt and your final destination is Heidelberg. Did you know there is a Deutsche Bahn train that you can get in 45 minutes?"

 
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Can It Increase the Efficiency of Internal Operations?

 

Another use of big data in the travel industry involves making internal operations more efficient and effective.

Take the issue of energy consumption in hotels. Two InterContinental Hotels in San Francisco were using Stem (a big data energy management startup).

Stem gathers data from more than 50 different sources (weather, electricity rates, building's energy consumption, etc.) to build a comprehensive building energy profile.

Through incorporating this big data energy management setup, the hotels were able to reduce costs by 10-15%.

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Is This How Vehicles Will
Be Hired?

 

The travel management system downloads Lynda's destination address, preferred air-conditioning temperature and favourite satellite music station to her self-driving hired car. She arrives at the conference hotel without any hassle.


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How Can It Introduce
New Products?

 

CASE STUDY

Hipmunk

Hipmunk is an online travel website. The website searches for and ranks flights, hotel options and accommodation rentals. Its big data activities involve customer-facing offerings.

One such product is their Agony Index, which takes flight duration and number of stops in a journey into account, before giving users' journeys a rating as to how much 'agony' they'll experience with the options they've picked - giving them a chance to change their minds.

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How Will Lynda's Expenses Be Paid?

 

Post-conference, Lynda receives an email from the travel management system, informing her that all of her expenses have been submitted to her company for reimbursement.


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Assemble

 

Since data science skills can be in short supply, organizations that want to use big data need to begin recruiting and working with those who possess those skills now. Make sure your potential new recruits are adept at data mangagement, analytics, and solving and communicating about business problems.


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Collaborate

 

The travel needs of today's customers are intermodal, international and interactive. No single travel provider is likely to meet any customer's needs for a seamless experience. Start now and consider partnering with other firms to provide the big data experience that your customers want.


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The End?

 

Perhaps it will be later than 2016 by the time journeys like Lynda's come to pass, perhaps it will be sooner.

Whenever they occur, the capabilities highlighted in Lynda's story are not entirely unrealistic due to the technological advancements we are already witnessing today.

This is just one small scenario illustrating what could be possible.

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The information contained in this infographic is based upon the report 'At the Big Data Crossroads: turning towards a smarter travel experience', authored by Professor Thomas Davenport. Any views expressed in the report are the author's own and do not necessarily represent the opinion of Amadeus IT Group.