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Defining the future of travel through intelligence

DUBAI, May 7, 2017

Big data and advances in computing power have transformed the world’s biggest industries, and travel is no exception.

Data analytics has become the strategy of choice for organisations of any size looking to secure competitive differentiation and seek out new revenue opportunities.

New deal sites, last minute offers, the rise of Low Cost Carriers (LCCs) and economic growth in emerging economies have given travellers a much larger choice of destinations when planning their next trip.

As consumers become used to a recommendation-led experience across other industries, their expectations of the travel experience increase. Chatbots and artificial intelligence are just some of the new technologies travel companies are using: Thomas Cook last year began using virtual reality in its marketing to allow travellers to “try before [they] fly.” There is an ever-greater need for travel companies to employ sophisticated personalisation techniques and intelligent merchandising.

Travel companies must move past getting people from A to B, but think about collecting information to build a 360-degree view of the traveller to create a tailored and memorable experience – right from the moment they are inspired to travel, to the time they return home from their trip.

As Francisco Pérez-Lozao Rϋter, senior vice president, Strategic Growth Businesses at Amadeus said: “At every moment in the traveller’s journey, from the time they make an air booking or search for a train timetable online, to their hotel check in, their actions create data. This data, picked up from hundreds of points across the travel ecosystem, presents a valuable opportunity for travel companies to provide better-individualised services to the traveller and improve his or her experience.”

We have entered an “age of experimentation” where travel companies must test new ideas and take an analytics-enabled approach to innovation. It is no longer enough to continue with the products and services that have been effective so far: innovation requires travel companies to imagine ways to do things differently, or do new things altogether.

In this big data, machine-learning world, almost anything is possible. The rise of data may at first seem unnerving, but it provides the raw material for real innovation. Travel brands must encourage an openness and willingness to use the insights from this and experiment with new ideas and approaches. Disruptive ideas – though some will fail – will define the future travel experience.

Traditional destinations may now find themselves competing for visitors with locations they previously hadn’t considered competitors, and Destination Marketing Organisations (DMOs) are often working harder than ever to encourage arrivals.

DMOs are an important part of the travel industry, helping to shape consumer interest in new and established destinations around the world and taking centre stage in driving economic growth through tourism in their markets.

In 2015, the direct contribution of travel and tourism to global GDP was $2,229.8 billion (3.0 per cent of GDP), and this is forecast to reach $3,469.1 billion (3.4 per cent of total GDP) by 2026. Against this backdrop, DMOs are taking centre stage in driving economic growth through tourism in their markets.

However, they too need to adapt to meet market changes.

“Destinations are at the heart of a travel and tourism marketplace that is changing faster than ever, thanks to an increasingly connected global audience, emerging new middle classes and rapidly changing global economics,” said Pascal Clement, head of Travel Intelligence at Amadeus. “DMOs need the tools that highlight new opportunities as they arise and enable them to shape their strategy even as it’s in progress – so they can keep up with this pace of change.”

The growing sophistication of data analytics and business intelligence offers DMOs an opportunity to engage with travellers in new ways. Although consumers now have seemingly endless destinations to choose from, understanding travel trends and traveller intentions can be critical for DMOs to inspire travellers and increase inbound tourism.

In such a fast-changing environment, DMOs need new approaches to identify and capitalise on opportunities. “It’s becoming increasingly necessary to be flexible in your strategies,” said Steven Valke, Business Intelligence, Marketing at Visit Flanders, a DMO based in Brussels, Belgium. “If you look at the wider landscape, factors like environmental issues and even currency changes have an impact on traveller behaviour and demand. Right now, for example, there’s a lot of volatility and fluctuation in currency values. DMOs need to be able to adjust quickly to these developments.”

Whilst the evolution in traveller behaviour presents challenges for DMOs, there are also significant opportunities on offer. Destinations that can understand today’s travellers, predict their behaviour through data, and respond with innovative, effective marketing campaigns, will be well-placed to capitalise on the appetite of an ever-wider range of travel consumers.

As Clement explained: “One of the most game-changing aspects of big data is that it enables organisations to look into the future and anticipate the needs of customers. Now, DMOs have unprecedented insight, not only into future arrivals, but also into customers’ wishes, thanks to analysis of billions of traveller searches. With this information, destinations can tailor their offer in line with demand.”

Combining search and booking data with additional third-party data sources, such as weather data, oil price data (which affects air fares), user generated content or currency exchange rates could help further augment a DMO’s ability to predict traveller demand.

Data analytics is already transforming business for DMOs. New technologies emerge every day,
helping DMOs understand trends in visitors, forecast behaviour from origin markets, and identify and benchmark their performance versus competitors’. Having these insights ensure DMOs can build a comprehensive, strategic plan for growth, optimising their marketing campaigns to reach the right people at the right time. It can also help DMOs measure ROI, a requirement for publicly-funded organisations.

As Jennifer Iduh, Head of Research at the European Travel Commission, said: “Some DMOs are making good use of data analytics, while others are merely touching the surface. But we are a very innovative industry. The latest trends show that DMOs are changing. They are spreading out and making use of new technologies. Where in the past they were more like tourist offices, they are adapting to the needs of the industry and using data to become centres of excellence.”

This will create innovation opportunities for DMOs in the future. For example, with Big Data
technologies like Hadoop, which can process huge amounts of unstructured data from social media
such as Twitter, Facebook, and Instagram, destinations could identify trends – as they emerge
and develop - in how people feel about the destination, whether potential visitors, current visitors or past visitors.

This kind of sentiment analysis becomes especially powerful when connected with real travel insights, giving destinations a much more effective way of knowing the real cause and effect of both external events and their marketing campaigns, rather than having to take a ‘best guess’.

Valke added: “The winners will be those who can use data to become proactive, basing decisions on insight rather than external market developments. This will really disrupt the way DMOs work, for the better – today, it’s typical to develop action plans for the year ahead, but with sophisticated data analytics, DMOs will be much better placed to adapt strategies as-and-when needed, and will benefit from much more flexible decision-making.

The growth of data analytics can be unnerving, but it sets the framework for real innovation. The revolution unleashed by digital will only intensify. DMOs are in the inspiration business, and must prioritise meeting the traveller’s needs. Technology and data will become more important than ever in helping DMOs connect with and inspire travellers. - TradeArabia News Service




Tags: data | travel | future | big |

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