Over the past few years, Big Data has transformed the way the hospitality, travel and tourism sector (HTT) functions. It has lodged a new dimension of customer care in HTT by opening up mind-boggling possibilities — spurring a ‘paradigm shift’ from simply viewing millions of tedious and unattractive transaction records generated on a daily basis to the possibilities of exciting customer engagements and bigger, richer and more effective interactions. What is it that makes big data such a powerful idea? How is big data transforming the world of hospitality?
First, the HTT sector is a nonstop data generator, creating millions of records every day. It generates large, complex and unstructured datasets — ranging from online transaction records to customer preferences . Exploiting the power of big data, can provide insights that help deliver a more efficient travel experience, an integrated view of customer behaviour that has never been possible before, with benefits to both travel companies and travellers alike. This provides immense opportunities to dramatically enhance current industry processes to become more responsive and focused around traveller needs and preferences, improve products and services, push innovation and build better relationships with customers.
How can big data impact the hospitality sector?
There are several potential benefits. In its most recent report “At the Big Data Crossroads: turning towards a smarter travel experience”, Amadeus identifies a series of usaes for big data – some key points are articulated below:.
Better Revenue: What is the best way to attract more customers and enhance revenue? Create an optimal price for products. Big data analytics can be used to establish this optimal price, based on basic supply and demand principles, using current data that is created every second as well historical data for validation. The same logic can be used for price optimisation in restaurants, catering and meeting spaces too.
Better investment and better decisions: Analysis of big data can lead companies to well-informed investment decisions by identifying what kinds of capital investments are profitable and what are not. Big data is not just about speedy decisions and data processing, but about ensuring better internal or customer-focused decisions too and improving all sort of business areas such as marketing, service processes, efficiency and even safety.
Better customer relationships: Big data helps players in the industry form better customer relationships. Through predictive analytics, the most-favoured destinations, lodging and dining preferences, ancillary service needs, and tourism experiences can be identified for each customer and very often proactively offered to ensure new levels of customer delight.
Better products and services: One of the most exciting possible benefits from big data is the creation of new products and services for customers. Personalization is a key tenant of Big Data. With so much available information about a particular consumer, transaction or destination, the analytical insights lead to better marketing and customer service.
Cheaper, faster data processing: Clusters of commodity servers running Hadoop and other open-source software can process data at costs fifteen to twenty times lower than previous generations of data warehousing technology.
Despite these benefits, the hospitality industry is lagging behind when it comes to using data to make informed decisions. In the retail sector, businesses are already mining data in clever ways to spot anomalies or correlations between sets of data that can lead to growth opportunities. So what can hospitality organisations do to catch up with their retail counterparts?
1. Think Data. In the current uncertain climate in global financial markets, no one can afford to base their decisions purely on gut and instincts. So, embrace data driven decision making.
2. Act Data. Personalize the customer experience. Hospitality companies naturally collect and generate tons of data and information on travellers and guests. They can use promotions, voucher campaigns and loyalty programmes to gather information about their customers’ preferences and use this data to develop more complete profiles of their customers and understand and act on insights and trends.
3. Listen Data. Capture customer trends on social media. They can provide supplemental information on specific interests/preferences and help make rapid decisions on what promotions you can offer, to whom, in what location and when.
4. Talk Data. Create better and richer interactions with customers through the adoption of social media and mobile apps.
Of course, big data will require the HTT industry to address a number of challenges: Technological complexity; data accuracy and rights of use; business and technological alignment; the need for data specialists. Despite these key issues, it is clear that, if done right, big data can offer radical capabilities for hospitality companies to anticipate and customise a guest’s experiences and that undoubtedly big data means big opportunities.
Reference: Amadeus Big Data Report