Travel Industry: Get a Move On With Big-Data


If you're a frequent or even casual traveler, then you've probably played chicken with yourself a time or two. You dare yourself, "Do I book now or come back in an hour, tomorrow, or next week for the chance of a better deal... or crashing and burning on pricing?"

Even if you do manage to best your original pricing, chances are the travel company really hasn't lost out at all. Over the past many years, airlines and hoteliers have proven themselves to be masters of price optimization. Along with their scheduling and route optimization and decades-old loyalty programs, it's one of their analytical specialties.

Price optimization may live on as your nemesis, but is it enough to carry travel companies forward in this day of big-data? Tom Davenport, a visiting professor at Harvard Business School and an author of more than a dozen books on business analytics, suggests not. There are individual exceptions, of course, but for the most part companies in other industries are using data in smarter, more innovative, and more advantageous ways, he said in a recently released report, "At the Big Data Crossroads: Turning Towards a Smarter Travel Experience." This needs to change, he added, given that big-data "could be one of the most influential initiatives since the online reservations system."

In preparing the report, sponsored by Amadeus, a technology solutions provider to the travel industry, Davenport spoke with 21 companies involved in various aspects of the travel business. What he learned about the challenges facing travel companies was not unlike what you would expect to find in any company with big legacy IT operations: "key data is often fragmented across multiple functions and units." He used the situation at airlines as an example:

    ...airline data on the passenger experience is spread across flight operations, baggage, loyalty programs, complaint databases, and external sources like social media. In order to make effective decisions about how to promote offers to customers and recover from service failures, airlines need to combine all of this information into one data warehouse and one set of algorithms.

Travel companies willing to invest in a big-data architecture and big-data analytics programs will see benefits across major processes. Davenport highlighted several in his report, but I'll focus on just one here -- travel management -- since it touches us as business travelers. Big-data can prove transformative for companies providing booking and other travel management services to businesses. As one senior executive at a global travel management firm told him:

    Our most analytical clients are increasingly interested not just in reporting on the past, but on predictive models and forecasts of their employee travel behavior. We’re not sure how rapidly the adoption of big data will take place, but we see it as essential to the effective management of corporate travel.

Davenport paints a rather compelling picture on his own, one that would have your participation in travel planning limited to conference registration and verification. After you register, all of the logistics -- city, hotel, start and end dates, for example -- would get loaded into your scheduling application and from there into the corporate travel management application. Next thing you know, you've received your travel itinerary comprising:

  • A flight on your preferred airline, frequent flyer upgrade accounted for
  • A hotel reservation
  • A reservation for a self-driving rental car, which the travel management application determined was the most cost-effective option. The travel app also would have had downloaded your destination address, preferred air conditioning temperature, and favorite satellite music station to the car.
  • A dinner reservation at your favorite type of restaurant, plus suggestions for dining companions culled from "valued members" of your social network who also are registered for the conference. You would need only touch your tablet screen to extend invites.

And don't worry about squeezing in time to do your expense report once you get back to the office. That would be handled automatically, too.

I don't know about you, but as somebody who still hasn't found time to book planned fall travel or file a travel expense report from last month, big-data's arrival for travel management could come none too soon. I can't foresee travel companies backing off the aggressive price optimization they've gotten so good at, but I do hope they figure out many other ways to tap into big-data and improve my travel experience.

Can you think of innovative ways travel companies can use big-data to improve your next business trip? Share below.

Beth Schultz, Editor in Chief

Beth Schultz has more than two decades of experience as an IT writer and editor.  Most recently, she brought her expertise to bear writing thought-provoking editorial and marketing materials on a variety of technology topics for leading IT publications and industry players.  Previously, she oversaw multimedia content development, writing and editing for special feature packages at Network World. In particular, she focused on advanced IT technology and its impact on business users and in so doing became a thought leader on the revolutionary changes remaking the corporate datacenter and enterprise IT architecture. Beth has a keen ability to identify business and technology trends, developing expertise through in-depth analysis and early adopter case studies. Over the years, she has earned more than a dozen national and regional editorial excellence awards for special issues from American Business Media, American Society of Business Press Editors, Folio.net, and others.

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Re: Big data help for flexible travel needs
  • 7/12/2013 6:35:14 PM
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Essentially yes, i already had to leave a day earlier because the shorter flights were over so even if i had got the flight i didn't get that i was talking about, i would have got there several hours earlier...now the 7 hour layover is absorbed by me having to leave a few hours earlier and still getting there a few hours later.

Re: Big data help for flexible travel needs
  • 7/11/2013 4:10:09 PM
NO RATINGS

But doesn't a 7-hour layover essentially change the date for you?!

 

Re: Big data help for flexible travel needs
  • 7/11/2013 4:05:27 PM
NO RATINGS

And which delivers the best results, do you think?

Re: Big data help for flexible travel needs
  • 7/11/2013 3:17:21 PM
NO RATINGS

Business-wise, I use travel agents, simply for the dissouncts, but when it comes to personal travel, I search the sites and find the deals myself.

Re: Big data help for flexible travel needs
  • 7/11/2013 12:35:04 PM
NO RATINGS

No i managed to get space in a different slightly higher cost flight with a non-preferred seat left and a 7hour wait in Amsterdam...who knows what i will be doing for 7 hours....but then it is better than changing dates. i agree with you the airlines have mastered flight load optimization. 

Re: Big data help for flexible travel needs
  • 7/11/2013 12:24:28 PM
NO RATINGS

And so, since now there are no flights for that date now, do you wait or pick another travel date? I think a lot of us end up changing travel plans because of the very scenario you describe. As a traveler, it's a pain but I do have begrudging respect for how the airlines have mastered flight-load optimization. I can't remember the last time I flew in a plane that wasn't entirely full or just a seat or two shy of that. 

Re: Big data help for flexible travel needs
  • 7/11/2013 12:20:03 PM
NO RATINGS

Beth, - I have just this week had mixture of experiences trying to find an affordable and interesting flight. On interesting i was considering stops at places i haven't been to, minimal wait times, available seat locations etc. I log back into one site 3 hours later to find the price went up by 200USD. I close it and return a bit later and find a cheaper flight offer so i decide to wait a bit to decide, and the next time i return, there are no flights for that date!

With regard to travel agents, in my average axperience i am convinced i can always get a cheaper flight by going to the airline directly. As a result i don't see value added by using an agent but i could be wrong. However it is certainly a great idea to have an app that one can customize to find and schedule flights, hotel reservations etc and on top of that deliver a good formal report  at the end.

Re: Big data help for flexible travel needs
  • 7/11/2013 8:13:07 AM
NO RATINGS

What? No free devices? Now that would get me into the nearest Apple store -- and quick.

Re: Big data help for flexible travel needs
  • 7/11/2013 8:11:01 AM
NO RATINGS

Speaking of apps, have you all dropped by the apple App Store this week to get your free apps? There are five or so available to celebrate the store's fifth anniversary

Re: Big data help for flexible travel needs
  • 7/10/2013 10:40:05 AM
NO RATINGS

I wouldn't be surprised if similar apps are available or in the works. Let us know if your traveler planner/buddy knows of any!

 

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