By Murad Vassib, UK sector lead at Talend
The travel and tourism sector is in a state of flux as operators shift from a booking-centric view of the business, focused on acquisition, to a customer-centric approach designed to drive personalised services and more engaging customer interaction.
Increasingly, the end goal is to increase customer retention while generating incremental revenue streams and additional upsell and cross-sell opportunities.
This environment is being driven by the demands of the new digital age. Operators are implementing new channels for customers, offering new online services and completing more bookings via mobile platforms and social media.
A 2014 report from FHR Travel Services, a leading UK-based travel services company, indicates that 50% of people will be going online to book their next holiday.
Recent research from leading travel operator Thomas Cook reinforces the trend towards digital booking. In 2013, mobile traffic to Thomascook.com increased by 100% year-on-year, with tablet traffic up 127%.
Over a third of visits to the site came from portable devices, with 15% of visitors booking their holiday on a smartphone or tablet computer.
All of these digital touch points create new opportunities for operators to gather fresh sources of customer data.
This data could be key to driving greater business agility, improving operational processes and making engagement as easy as possible.
Equally, it could allow operators to gain a better understanding of their customers and how best to interact with them.
These days, it’s not enough for companies in the travel industry to know where customers have travelled to, they also need to know what services they have previously inquired about and perhaps even what activities they have been tweeting about while on holiday.
Ideally, companies need to deeply understand all customer interactions in the past across all channels.
British Airways’ ‘Know Me’ programme, which combines existing loyalty information with data about the online behaviour and buying habits of 20 million customers is a good example of a company that is rapidly becoming data driven.
The programme enables BA to better understand their customers and gain a competitive advantage by anticipating and responding to their needs. The BA approach is indicative of a broader understanding of the benefits of big data across travel and tourism.
A new report from Carlson Wagonlit Travel, polling the opinions of more than 1,100 travel managers globally found that the top priority for managers, identified by 63%, is to use travel data to build predictive analyses and benchmarks.
Yet, it is often a challenge to turn this desire into practice. Many operators are well behind the technology adoption curve when you compare the sector to other vertical markets like banking, retail and gaming.
Many are also operating with smaller IT budgets – delivering more for less seems to be the order of the day. Margins are low in travel, with typical yields on a package holiday amounting to around 3-4%.
Due to the huge volumes of data from new sources that travel companies need to churn, and the thin profit margins, the appetite for cheaper and faster solutions is compelling.
Delivering on the Opportunity
Addressing these issues requires an organisation-wide focus on mastering data collection and analysis that is driven by the needs of the business, not the IT team.
Master Data Management (MDM) and Big Data Integration solutions, coupled with big data analytics, are keys in this sector.
These solutions will give travel companies the foundation needed for making data intelligence a core discipline and gaining competitive advantage.
There are however a number of things to consider when embarking on the journey to become data driven, such as selecting the right tools, defining data governance rules and policies, and aligning a range of business teams.
Travel and tourism businesses first need to integrate their core data assets and apply data quality tools to ensure that the information collected is accurate, complete, conformant with standards, and aligned with business objectives.
To truly harness data insights across the organisation, travel firms also need to use MDM.
These solutions are able to unify any amount of data – from customer information to product, supply, and beyond – into a single, actionable “version of the truth”.
MDM will enable them to develop more personalised offerings (e.g. tailored ideas for day excursions from the hotel), as well as deliver informed, consistent customer experiences across all service channels. By extension, these capabilities also help foster greater customer loyalty and retention.
While the benefits can be extensive, MDM is typically a business-wide solutions implementation and can therefore be difficult to implement successfully.
Typically, it’s not a technology conversation, initially at least. Instead it is a cultural or a business one first and foremost. Providers and their operator customers have to make sure they have their business units aligned – from HR to sales to operations.
It’s no easy task because different departments are likely to have different objectives and priorities. One unit might want to master customers first, whilst another may wish to start with suppliers.
This is why organisations need to think carefully about how MDM will be leveraged within the business, and which group specifically will use and manage it. But MDM should not be an end in itself.
By opting for a single, standardised data integration platform, travel businesses can bring in big data analytics as part of their approach without having to go out and invest in another tool; manage another front-end user interface and get staff trained on a range of proprietary technologies.
There are certainly some good examples in the market of operators making better use of their data to drive business advantage.
For example, TUI has successfully merged information from across their many consumer touch points to create a 360-degree view of the customer that can be delivered to sales and support channels throughout the organisation in real-time.
As the switch to new social, mobile and online approaches gathers pace, travel and tourism operators will increasingly be looking to move to technology solutions that allow them to capture and make use of that information to drive business advantage.
Today, they can cost-effectively do all this while at the same time sharpening that single customer view and gaining additional insight into their customers’ desires and preferences to build loyalty and revenue.