Big Data in the Travel Industry
As technology continues to disrupt the tourism industry, it is crucial for travel brands to keep up with the latest trends in order to attract and retain clients.
Big data is one of the technologies that is changing the way in which companies carry out their marketing processes and make decisions.
Read on to find out why big data is important within the travel industry and how it can be used to increase profitability and enhance the customer experience.
What is Big Data?
Optimizely define big data as extremely large amounts of data gathered by a company that reflects their sales, customers, competitors and market as well as their own internal operations and activities.
Within the travel industry, it can include data on customer demographics, preferences, searches, social media, booking activity, destinations, meals, transportation, recommendations and much more.
In the past, data collection and analysis was a lengthy manual task. Today however, advanced technology allows this raw data to be collected, processed and analysed in real-time to reveal patterns which can then be used to predict customer behaviour and industry trends.
How Big Data Is Used in the Travel Industry to Augment Profitability
Big data offers many benefits to companies within the travel industry, including:
- Targeted marketing
Big data analysis can provide key insights on customers, allowing companies to market to their customers with more targeted communications. And, as travel brands rely on both gaining customer loyalty and consistently attracting new clients, big data allows them to save time and money by directly targeting those who are the most interested in their products and services.
- Enhanced customer experience
Targeted marketing benefits not only brands, but also consumers themselves. Offering more personalised communications can enhance the overall customer experience, and according to Phocuswire, big data in travel can also drive customer loyalty.
- Predictions and forecasting
Predictive analytics can be used to make more accurate predictions and forecasts on both customer behaviour and industry trends, allowing companies to be proactive rather than reactive.
- Revenue management
Big data regarding pricing, occupancy rates and seasonal trends
allow companies to sell the right product at the right price and at the right time, maximising opportunities for increased revenue and profit.
- Optimised decision making
Big data allows travel companies to make more accurate and informed decisions and plans, optimise their business processes and therefore increase profitability.
What are the main Big Data challenges in the Tourism Industry?
Data privacy and security are one of the main challenges when working with big data.
Informatica explains that when working with such large and complex volumes of information that are spread over various locations, data breaches are always a threat. Companies need to create privacy frameworks that can handle the volume, velocity, value, variety and value of big data as it is collected, processed and analysed. They should aim to minimise risk and protect sensitive information while ensuring growth and performance.
Consumers are also becoming increasingly aware of the huge amount of information that is being collected about them, and any infringements on privacy can destroy customer trust. Therefore, it is important to be transparent with customers on how you are storing and using their data.
Another challenge when working with big data is how to effectively handle, process, manage and store it in order to ensure it is of high quality and is actually valuable for use. This can be done throughout each stage of the data lifecycle using advanced AI and machine learning software and is key to the success of big data analysis.
Is Big Data the most important development in technology for Travel and Tourism?
Big data is undoubtedly one of the most important technology developments for the travel industry.
Despite challenges concerning privacy and data security, the huge and ever-growing amount of data available is invaluable to travel companies.
Innovations in technology are already shaping the future of the industry, and big data is set to transform the way in which companies market to their customers and make decisions.
Travel brands should consider how they can use big data to offer a more personalised customer experience, make more accurate predictions and, in turn, increase profitability.