The future of the travel intermediaries industry will be shaped by a range of disruptive themes, with big data being an important theme that will have a meaningful impact throughout the industry.
Today’s digital economy is powered by data. It is produced in abundance by both individuals and enterprises and stored in vast data centres, some of which cover hundreds of thousands of square feet. Several prominent businesspeople and a number of leading publications have described data as the new oil, capable of generating significant value if used in the right way. The challenge for companies is not collecting data but deriving actionable insights from the wealth of information that they accumulate on a daily basis. This is where big data technologies come in, with their ability to handle extremely large, diverse data sets that, when analysed, can reveal patterns, trends, and associations, especially relating to human behaviour and interactions.
Big data has applications across industries, from providing detailed customer profiles for travel companies to improving the drug discovery process through the use of predictive modelling. The opportunities available to those companies that can harness the power of big data are clear and wide-ranging, but it is not a one-size-fits-all solution. Instead, businesses need to tailor their approach to their own specific requirements and use cases.
In the travel industry, the huge amount of information collected about travellers allows companies to make use of targeted marketing to attract the right customers at the right time. By collecting data about the behaviour of certain traveller types, promotional content can be changed depending on the recipient. Companies can also save money on marketing if they can predict who will or will not be interested in their offerings.
However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.
Insights from top ranked companies
One of the reasons Airbnb has been so successful is because of its knowledge and execution of data analytics. The company actively analyses as much data as possible to see if prices listed are too high or too low if an event was happening nearby, for example. By collecting data on what led to the final decision, the company can recreate the decision process again. Algorithms determine suggested prices to hosts based on things like transport links, time of year, and competition. According to Airbnb, when hosts price themselves within 5% of the suggested price, they are nearly four times as likely to get a Booking as when they go beyond that pricing. In many cities, hosts can use Airbnb’s automated pricing tool, Beyond Pricing. Beyond Pricing boosts host income by as much as 40% through the use of targeted data and analytics.
Booking Holdings, the parent company of Booking.com, is one of the leaders in effective targeted marketing – it uses data from previous searches and similar traveller profiles to suggest new destinations that may be of interest. With the correct use of predictive analysis, the website can limit what a potential customer sees and shows them only what they are likely to be interested in.
Booking.com also offers other companies the use of their application programming interfaces (APIs) so that more traffic is directed towards it. APIs are very important in this process as they allow third-party sites to access information from the airline, hotel, or other travel services. Companies may choose to only offer accommodation in a certain area or can even feature a link to the Booking.com property on their blog. For example, the travel planning tool Rome2Rio partners with Skyscanner for flights and Booking.com for hotels.
Kayak, Booking Holdings’ fare aggregator and travel metasearch site, uses many big data solutions to make sense of the vast amounts of data it is dealing with on a daily basis. Kayak uses analytics tools to make sure the flight prices which appear on the website are consistent and synchronised with the ones from the airlines’ sites. Furthermore, Kayak makes use of flight price forecasting, in order to predict price fluctuations for a seven-day period, and uses controlled experiments known as A/B testing in order to understand which site features drive better results and improve the overall user experience.
To further understand the key themes and technologies disrupting the travel and tourism industry, access GlobalData’s latest thematic research report on Big Data in Travel and Tourism.
- Intrepid Group
- Flight Centre Travel Group
- G Adventures
- Secret Escapes
- On the Beach Group
- Hays Travel