Big data has been big news in the travel industry for a few years now. It offers the chance for travel companies to increase the number of sales and improve the travel experience of customers; but while the industry may be aware of it, do travel companies really understand the opportunities it opens? If not, start taking notes..
What is big data?
Just like any up-and-coming technology, there has been a certain amount of confusion surrounding what it really means. Put simply, the term is used to describe 'a lot of data'; it is the storage and analysis of large and complex data sets that exceed the capabilities of a typical database.
How is this data used?
Take an online travel company as an example. For years these companies have been using analytics tools to track user demographics, conversion rates and bounce rates to gain customer insights. Now, gathering data such as users' mouse movements in real time helps businesses understand what their customers are doing when they visit a web page. Storing this volume of information would have been far too expensive for the majority of companies a few years ago, but today, thanks to big data, this kind of storage is cheap, efficient and available to your average online travel company.
What does big data mean to the travel industry?
For many years, CRM systems have allowed companies to create relevant, targeted marketing campaigns. Big data, however, uses customer information to create a truly personalised service. It allows travel websites to recommend a specific hotel to a specific user based on their previous holidays, requirements and preferences.
And it's not just personalisation that big data can offer. Location-based services (think Foursquare) combined with geofencing technologies (knowing when customers are near locations of interest to them) open up a whole world of possibilities.
It's a learning curve
In the past, some travel websites have misused big data techniques by increasing the price of flights customers had expressed an interest in. Hopefully this kind of activity will stay a thing of the past and the industry can move forward with confidence.
So where do we go from here?
As big data gains more momentum it looks certain that 2014 will see the following:
Companies in the travel industry will be looking to big data to help develop their business
Consumers will become used to giving up some elements of their privacy in return for better personalisation. Of course, privacy will always be of the utmost importance to companies - whatever the industry.
Big data is changing the face of the travel industry, so don't get left behind.