Big Data – a Relatively Short Trip for the Travel Industry
If there is one sector that has been particularly affected by the digital revolution, it is travel. According to research company PhoCusWright, the share of bookings derived from online channels will increase to 43 percent this year. The move of more consumers to online sources for researching and booking travel, with sites like Airbnb, Booking.com or TripAdvisor counting visitors in the tens of millions, is a further boost to a sector that has historically always been a strong collector of detailed consumer information. At the same time, companies like Uber and BlaBlaCar are already showcasing the power of being data driven by fundamentally disrupting traditional taxi and rail travel services.
What could be more natural in these circumstances than travel companies being among the most committed to their digital transformation? A Forbes Insights report released earlier this year reinforces this point, placing travel at the top of industries in which companies are using data-driven marketing to find a competitive edge. According to the report, 67 percent of travel executives say they have used data-driven marketing to find a competitive advantage in customer engagement and loyalty, and 56% percent have done so for new customer acquisition.
More Miles to Go
While the digital transformation of the travel industry is certainly underway, there is still a way to go – especially for the other 33 and 44 percent of travel executives who have yet to use data to drive a competitive advantage! Moreover, while the travel industry may be advanced in terms of marketing engagement, when it comes to relationships and the management of customer data, they still have a way to go. For instance, how often are you asked by reception at check-in if this is the first time at the hotel? And, even though during your stay you must constantly prove your identity, why is this only for hotel billing and security purposes rather than to enjoy personalized services? Moreover, some consumers suspect that being identified by the travel industry turns out to be a detriment rather than a benefit (for example the case of “IP Tracking“ - the more one visits a booking site, the higher the ticket price might climb).
The reality is that companies in the travel industry are confined mostly to handling transactions, when there are technologies and practices linked to customer knowledge available that actually enable them to better manage and personalize the entire customer journey. The challenge is to reinvent the notion of the travel agency, which was formerly essential to linking customers to service providers. The Internet allows people to do a lot of the work themselves, such as finding a provider, making a reservation and responding to an event. The role of advisor remains, designed to provide, according to the customer’s profile, the right service at the right time.
How do you differentiate?
Each ticket reservation (plane, train, coach, etc.), each hotel stay and each car rental leaves a “digital trail”, which can be consolidated and analyzed within a Customer Data Platform. This enables travel companies to better understand the needs and desires of an individual customer. Thus, a large amount of data can be collected both before (while booking a trip or a flight: destination preferences, language, climate, activities, etc.), during (food, excursions, sports, etc.) and after the trip (customer reviews and social commentary, recommendations, next trip, etc.). During the trip or the journey, it is also possible to be permanently connected to the customer, for example through the provision of Wi-Fi access, (as is already the case in the majority of hotels, airports, and increasingly on trains and planes). Globally, there are many more points of interaction today than there have ever been.
We therefore see travel companies launching services based on the Internet of Things and offering real-time recommendations to deliver new offers(example: the tennis court is open; would you like to use it?). Here, we are talking about managing the entire the customer journey, not just the initial act of purchase.
A rough methodology
The first technological brick in this model is a customer database that covers all of the proposed services (online or offline reservations, points of sale, after sales, customer service, call centers). This should include basic information about the customer, and is what we call the golden record (also known as Master Data Management). To get a unique view of the customer that has been updated across all channels, it must also reflect the transactions and events that took place during the customer’s journey, including interactions. Big data plays a key role in this platform, as it can also integrate data from the web and social networks. Additionally, it allows for the extrapolation of analytical information using raw data, such as a segmentation or scorings that enable companies to predict the customer’s affinity to a certain service.
This platform can also connect in real time to all points of contact, for example, a call center (which helps to increase efficiency and relevance through an immediate understanding of the customer context), websites, points of sale, reception desks, etc. The greater the number of points of contact, the more precise the picture of the individual customer will be and the greater the opportunity for companies to provide the right service at the right time. To the extent that this type of system directly affects the processes and the key actors in the customer relationship, it is essential to support the project with an accompanying change.
In summary, a Customer Data Platform (some call it a Data Management Platform or DMP, but this term is ambiguous in my opinion since it is more often used in reference to a tool for managing online traffic and the purchase of display ads rather than a cross-channel platform intended to supply value-added services to target customers) enables, on the one hand, the creation of a sustainable and up-to-date customer information base and, on the other hand, a means to offer online services to the connected customer throughout their journey/stay/travel, thus creating a personalized relationship. And, finally, it allows for the recommendation of personalized offers in real time at the most opportune moments.
Though it may be difficult to maintain a one-to-one relationship with customers in some sectors, this is not the case in the travel sector; trips are often tailored, the context is personal and interactions with customers are frequent. The development of a Customer Data Platform is therefore essential for professionals in these sectors. Developing a real understanding of the customer journey is their last hope in a world where digital technology giants are beginning to take over their turf and mobility will only make it easier for them to collect more data.
If you are interested in learning more about the impact of technology on the travel industry, you may wish to view this related on-demand webinar. The webinar details how TUI, the world’s number one integrated tourism business, with over 1,800 travel agencies and leading online portals, as well as airlines, hotels, and cruise lines, is using Talend Master Data Management (MDM) to build a single customer view and deliver a more seamless user experience across multiple channels.
 “Competitive Landscape Of The U.S. Online Travel Market Is Transforming”, Forbes April 2014 http://www.forbes.com/sites/greatspeculations/2014/04/08/competitive-landscape-of-the-u-s-online-travel-market-is-transforming/
 “Data Driven and Digitally Savvy: The Rise of the New Marketing Organization”, Forbes, January 2015, http://www.forbes.com/forbesinsights/data_driven_and_digitally_savvy/