Data Analytics in the Travel Industry
We live in an era where internet-enabled services are lucrative businesses. Be it hotels, flights, trains or even buses and cabs – there are a number of companies that have sprung up over the last decade in the business of online booking. The extent of digitization is creating a large amount of transactional data which can be used to serve customers better and improve earnings. The rise of online transactions has equipped the customer with much more data and choices to make an informed decision. For example, a customer can bargain for a tariff discount at a hotel by showing lower tariffs offered by a nearby competing hotel. The customer is also much more vocal and opinionated, more intolerant of poor service, and armed with social media – a single review gone viral can make or break the reputation of a company in a matter of hours.
With cut-throat competition to win the loyalty of customers, online businesses are forced to innovate and come up with newer and better services. One of the emerging best practices is to use analytics to understand each customer’s preferences from past transactions, and to offer tailor-made solutions based on this understanding – like trip-planning suggestions for upcoming holidays, or alerts for discounts on one’s usual flight. Companies are also monitoring social media conversations closely to mitigate negative reviews and to capture micro-trends. It is well known that the travel industry is vulnerable to seasonal fluctuations in demand. These macroscopic fluctuations are understood well, and can be planned for accordingly. But there lies a huge opportunity in making sense of microscopic fluctuations using big data analytics. Real-time trends like hourly demand, regional demand and anomalous spikes can all be studied to optimize offerings and pricing to maximize revenues. Another important tool is predictive analytics, used for providing insights into future demand based on past transaction data. Companies can now estimate the demand for certain routes/destinations over the next few months and plan their offerings accordingly.