Are you paying attention to the buzz about big data? If you’re a TMC or a corporate travel agency you should be, because big data has the potential to drive big changes in travel management.
For travel sellers and travel managers, insights gleaned from big data into traveler behaviors can help them facilitate better and faster travel decisions, improve customer relations and provide more cost-effective travel, said Harvard Business School visiting professor Thomas Davenport, PhD.
Davenport authored a report on “Big Data and the Travel Industry” for Amadeus. The report concluded that big data has the potential to transform the ways travel companies, including TMCs and business travel agencies, deliver services.
“Travel managers who use big data will be able to facilitate employee travel by providing better information about where to stay and how to get there,” Davenport said.
“More sophisticated travel management applications will address the cost and cost-effectiveness of the entire journey, not just individual components of a trip.”
What big data reveals
Big data is the accumulation of massive quantities of data about your travelers and their travels. Big data is not just travel transaction details. It is all the digital tracks your travelers leave as they search, book, buy, travel, work and report life on the road.
Transaction data tells the travel manager where a traveler stayed and how he or she got there. Big data can reveal where the traveler shopped, the alternatives that were considered, the choices made, in what order choices were made and changed, when and how purchases were made, etc.
“Big data can provide much more granular information about where employees are traveling and for what purpose,” Davenport said.
At a crossroads
The problem is that big data is, well, BIG — too big for conventional data management techniques. That means that travel managers and travel management companies will need to retool their information technology operations.
The alternative is to be left behind as other sectors grab travelers’ attention and purchases.
“The travel industry stands at a big data crossroads,” Davenport said. “New technologies and techniques offer the potential to translate increasing volumes of data into higher profits and more efficient operations.
“Some leading companies are pioneering the use of big data and already seeing a huge impact. Airlines, airports, hotels, rail companies and travel sellers need to ask themselves if they have a big data strategy in place and if it will allow them to be at the forefront on this opportunity.”
New insights, better decisions
Traditionally structured data is usually divided between different silos across departments, companies and providers. Big data combines structured data across silos with unstructured data streams from multiple sources.
The result, Davenport said, is new insights into travel needs, preferences, and behaviors. These insights can help travel sellers and travel managers provide better decision support, better customer relationships and more cost-effective travel.
“For travel management companies, the big data opportunity is intermodal travel,” he told Travel Market Report. “Big data and related tools will allow travel management firms to coordinate every aspect of a business trip — including, perhaps, the use of self-driving cars to get to the final destination.”
Benefits for agents
“For corporate travel agents, big data and targeted recommendation systems will restore some of the customer intimacy that once characterized travel agency-customer relationships,” Davenport said.
“With relatively little effort, travel agents will be able to come up with recommendations for every aspect of a trip that are highly tailored to the employee’s needs and preferences.”
Big data will allow travel managers and TMCs to provider better and faster decision support, make faster decisions and incorporate more data in their decision making.
What that means in practice, Davenport said, are capabilities like Kayak’s price forecasting program and Hipmonk’s agony index, which rates itineraries by discomfort and inconvenience.
On the operations side, using big data can improve the cost-benefit ratio of travel an average of 10% to 15%. Improvements come from being able to incorporate better information, better offers and better decision making into the travel process.
“You cannot run a corporate travel operation based solely on cost control,” Davenport said. “Revenue, traveler productivity and traveler satisfaction are the important drivers of decision making.”