Big data is transforming travel industry services. These changes are extremely far-reaching, revolutionizing the way consumers interact with the industry globally.
The volume of data consumers generate is growing exponentially. This is particularly the case in the travel industry, where vast swathes of data are produced every second by online searches, social media interactions, web traffic, and booking transactions. Businesses now have the capacity to capture and analyze this information, which gives them an all-important competitive edge in an increasingly crowded market. Not only do these data give players across the sector insights into customer behavior, but they also allow them to deliver a higher standard of customer experience. Combined with new smart technologies and advanced analytics tools, this intelligence facilitates a broad range of new capabilities and opportunities for innovation.
Despite the opportunity it presents, big data comes with challenges. Identifying, collecting, and analyzing these enormous data sets requires strategic planning and stringent governance. However, refusing to rise to the challenge is no longer an option; now, travel companies must embrace big data in order to remain relevant. Without data, businesses are at a severe disadvantage when it comes to service, revenue, and corporate strategy. In this article, we discuss five ways big data is changing travel and why no company can afford to ignore the imperatives of the big data age.
1. Create personalized user experiences
Big data facilitates one of the most important aspects of customer service today: full personalization. Customized user experiences are perhaps the most important application of big data in the travel industry. With big data, travel companies are able to enhance customer experience is ways never previously thought possible. For example, by identifying patterns in consumer behavior, travel industry services can better understand their preferences. From here, they can segment their customer base so they can provide more relevant marketing content in a timely manner. To illustrate, analysis may show that a customer consistently selects pet-friendly accommodation. In response, companies can deploy an algorithm that consistently recommends a particular user hotels that accommodate pets. These capabilities not only strengthen marketing efforts, but they also a facilitate easier navigation and faster sales cycles.
2. Devise strategic pricing matrices
Big data analytics allow travel companies to index, monitor, and analyze competitors’ prices and consumer buying habits. This enables businesses to gain a clearer picture of market fluctuations and real demand. This advanced analytics software use machine learning and real-time data capture to help companies devise agile, responsive pricing strategies. Through constant monitoring, comparison, and analysis of a continuous stream of data, companies can create prices matrices that respond to customer demand and preferences. This is particularly pertinent in the travel industry, where price continues to be an important product differentiator.
3. Seek greater competitive differentiation
Although it is true that price is important, customer service is increasingly becoming the deciding factor in purchase decisions. This is especially the case in a market where pricing strategies are extremely aggressive; for instance, fare differences between budget airlines is often negligible. Instead, they now vie for consumers favor through their value-proposition and service standards. As such, companies are using big data to make booking budget travel a far more pleasant experience than it otherwise would be. By carefully monitoring customer behavior, companies can deliver customized search results that boost customer satisfaction and thus look-to-book ratios.
4. Design high-value loyalty programs
Loyalty programs are essential for gathering the most detailed customer intelligence. Therefore, big data analytics are becoming an essential component when it comes to leveraging the potential of loyalty schemes. With these insights, travel industry services can gather data that allow them to maximize conversions, retention, and customer lifetime value through highly personalized promotional content. As a result, travel companies can reduce churn, which ultimately boosts revenue.
5. Better reputation management
Consumers are more empowered than ever before. Now, user-generated content has an enormous influence on customer behavior. From a negative TripAdvisor review to a complaint posted on Twitter, a company’s reputation now hangs permanently in the balance. Therefore, it is critical that companies monitor this activity carefully. These data, combined with feedback gathered internally, is essential to identifying strengths and weaknesses in products, processes, and services. One captured, this information should be leveraged to continuously improve service, mitigating the chance of any further negative content appearing.