Travel Industry Experiences Delays with Big Data
With the Fourth of July holiday right around the corner and summer months ahead, millions of people taking trips will surreptitiously add to the massive streams and clusters of travel data. In that spirit, a big name in analytics has taken a crack at the turbulence and potential of big data in the travel industry.
Thomas Davenport, research director for the International Institute for Analytics and visiting professor at Harvard Business School, had extensive conversations with nearly two dozen airlines and online travel sites for his new report, entitled “At the Big Data Crossroads: Turning Towards a Smarter Travel Experience.” Davenport says the report is an effort to get a snapshot on the adoption of advanced analytics technology and processes by a few leaders in the global travel industry, which was “one of the earliest to pursue various forms of information management analytics.”
Even with that early start with some facets of business data, those travel industry leaders are “really just getting started” when it comes to advanced analytics. To blame are factors such as the reliance on but stunted capabilities of legacy systems, and, for the U.S. airline industry, the number of mergers that have providers dealing with integration rather than innovation.
In recalling a cutting-edge customer loyalty program data effort by British Airways, Davenport says he was “encouraged” by a few companies he talked with, though he wasn’t certain that the appetite for advanced analytics would spread quickly across different travel companies.
“I’m optimistic in the sense that [big data capabilities] do exist in some places, but not nearly enough as it could. And thinking about the obstacles, it can be sobering. With airlines, there’s the need to update your architecture, consider a lot of new types of data, all on very low profit margins that have historically plagued the industry.”
But, as there’s money to be made and non-stop data streams, Davenport notes that the travel industry could once again be a flag-bearer in analytics. Like other horizontal industries, there is potential in big data use when it comes to efficiency of revenue or financial performance management. But specific to travel providers, Davenport found and foresees a few great cases with big data implementations:
- Distribution: In what Davenport defined as the historically “most advanced” area of travel analytics, distribution carries great impact in manners such as personalization in customer outreach (like pitching deals based on relativity to an airport restaurant or making an flight offer based on the likelihood that other Facebook “friends” are taking a trip). And as more “Millennials” travel on their own, Davenport wrote that a big data effort that misses the social media and mobile possibilities “will fail.”
- Internal operations: Here, the sensor data and the “Internet of Things” are being maximized by some leading businesses. Davenport cited GE’s tracking of sensor data to cut fuel use and engine wear on planes, and the use of energy management software to build comprehensive facility profiles at two San Francisco InterContinental hotels.
- Travel management: In a hypothetical scenario, Davenport outlines paths for information related to scheduling, delays, upgrades, car rentals and restaurant recommendations to be sent to a single customer.
The report was sponsored, though not framed in any way, by travel solutions and advisory firm, Amadeus IT Group. Herve Courtier, Amadeus head of R&D, says some of the biggest takeaways he had from Davenport’s report were along the lines of customer experience in an industry that often gets dinged for an inability to “bring back the fun into the travel experience.”
“In some cases it means going from searching to finding; using analytics to add context for customers,” Courtier says.
Included in the 32-page report were takeaways and first-hand accounts from Eurostar, Marriott, Hilton, Kayak, Hipmunk, Orbitz, Expedia, Air France and Frontier, among others. Davenport noted that, given factors such as financial capabilities, other travel outlets like buses, U.S. rail lines and the cruise industry tend to be a step behind their counterparts. Click here to download a complimentary copy.