NB: This is a guest article by Larry Smith, a partner at US-based Thematix.
Big Data has blossomed into a big topic among many in the Travel industry because it is, well, BIG.
Lest we forget, data flows in and around, to and fro, among and between every facet of the industry every day.
What’s more, its growth is being stoked by the social graph where travelers are reporting, rating and app-ifying their travel experience into a real time broadcast.
There is no doubt Big Data will be a defining currency and competitive advantage to those who can harness the resource and extract its value.
The TnoozLIVE Episode 2, of which I was a panelist, got to a lively Big Data discussion with responses to the question:
“Which organizations are best positioned to bring big data techniques to the travel industry?â€
The following answers were available:
- 17% – GDS
- 35% – Search companies (like Google)
- 13% – Social networks
- 25% – Intermediaries & Suppliers
- 10% – People not from these parts
Though we panelists were not invited to vote, all of us voiced big opinions after the results were posted. I took the underdog 10% position that “People not from these parts” would be the drivers and best positioned to deliver the value.
“People not from these parts” (PNFTP) think travel is sexy and glamorous – and it is!
They know it’s a huge global market with many dynamics that fit their algorithms. Even better they can be funded by investors who know big data will be a big deal, and a deal with many exit strategies from companies inside or outside the industry.
PNFTP have unique skills and a perspective not tainted by the realities of delivering the essential components of a journey. PNFTP don’t know or care about what happens in the moment, right now, in the air, car, train, hotel, or attraction.
But because they do want access, real time to these proprietary data, this is a potentially huge revenue stream to almost every travel provider willing to set up a data feed.
PNFTP also don’t want to worry about data quality (governance and provenance), so paying for a feed will make them the most likely group to attract the attention of the industry. Their servers can generate revenue without doing much human intervention work, and do this across many industries.
PNFTP have the expertise, funding, and appeal to the industry. So what about everyone else?
Search companies, the top 35% choice, are obvious because they already manage big data and have travel initiatives via acquired travel companies including ITA by Google and Farecast by Microsoft/Bing.
However, both have focused on advertising revenue related initiatives, and it’s most likely they’ll continue to apply big data resources to making advertising more appealing; in other words, their contribution will be at a price.
Intermediaries and suppliers are a broad group with various levels of expertise, capital, and knowledge resources. There is no doubt some will offer “point solutions” or extensions to their current business offering through some big data initiatives.
These targeted contributions will add big data benefits to certain sectors and illuminate new opportunities and solutions.
In third place at 17%, the GDSs clearly have the knowledge and expertise from decades of working with big inventory and price data.
The unfortunate reality is their IT environment has not been conducive to making the big transformation to the current big data requirements.
Should any GDS decide to allocate an outsized amount of their capital investment to these new initiatives they would certainly take a leadership position, but it’s a long and uphill journey.
Social networks at 13% are also positioned to apply their expertise in managing big data, but it would be a strategic stretch to think they would target the travel industry.
Surely their membership do travel and post extensively, but crunching the data to the benefit of the industry would not be a near term reward. What’s more social data is very messy and highly unstructured.
So back to PNFTP, who may be legion. There are no substantial barriers to entry for outsiders because at this stage the type of expertise and knowledge required has more to do with math than travel.
The issue is not their entry but their direction, and how they fit and contribute to the travel ecosystem
The OpenTravel Alliance and my firm, Thematix, do not oppose this intrusion but want to guide it into a place where all of us can use it to our own particular advantage by agreeing upon standards and eventually an ontology of common terms and classes.
Big Data will offer Big Benefits to all, regardless of who it comes from, when it fits the form and format that we need and can apply to our business.
NB: This is a guest article by Larry Smith, a partner at US-based Thematix.
NB2: Eyes through hole image via Shutterstock.
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In a few sentences, what exactly is Big Data, and how can it work to the commercial advantage of a mid sized independent hotel?
@Gilmour
A formal, generally acceptable definition is: “Big data is a term applied to data sets whose size is beyond the ability of commonly used software tools to capture, manage, and process the data within a tolerable elapsed time.” http://www.tnooz.com/2012/01/04/how-to/big-data-and-the-infinite-possibilities-for-the-travel-industry/
But big data is also like the ocean, where if you know what you want, have a use or application for certain data, then you can go extract a bucketful from the right location.
As a mid-size independent hotel, commissioning a million dollar IT project or software development program is not going to happen; in fact I don’t see a single reason why you should try to harvest, manage, control or apply big data solutions at this time, though I could be wrong – http://www.tnooz.com/2011/09/20/news/big-data-bringing-the-magic-back-to-travel-technology/
What your HUGE opportunity involves is BECOMING Big Data. How do you collect and make available all manners of information about you, your hotels, your staff, the guests, the amenities, Food & Beverage services, in-house events, near-by events, real time reporting from a weather station atop the roof. You get the idea. The more data about you, and the more likelihood you will get processed into the ocean and extracted by more people more often than those competitors with thin data sharing.
Check out this article about 2 Hotel pilot applications that add more information to a website to yield greater visibility to search engine results: http://www.tnooz.com/2012/02/28/news/what-happens-when-you-apply-semantic-search-technology-to-hotel-websites/
Robert, the short answer for hotels – big data is all that rich guest info hotels have stored away in PMS, CRS and sales and catering systems.
The challenge for hotels is getting access to all that great data stored away in systems that are primarily created for operational use. I used to work for a global hotel company and was in charge of a data warehouse of guest data aggregated from hotel PMS’ worldwide. It was a painful and expensive initiative, and we were ahead of our time – we had great rich data but no affordable way to share it or use it.
Now, the tools to get that data, manipulate it and share it (with trading partners like car rental companies, tours and activities companies) to create more targeted offers to potential guests are much cheaper to use and those tools can do much more than we could in the mid-1990s.
Because that’s the goal – to drive bookings, repeat bookings and guest loyalty by providing a more meaningful offer to a potential guest based on what a hotel knows about a guest’s past behavior, with your hotel and with your trading partners.
Bringing in outside ‘big data’ – user behavior derived from cookies dropped from your site, or buying demographic data, as examples – could provide more information on what guests and potential guests are looking for in addition to booking your clients’ hotels.
Big brands, with their larger resources, will probably take on big data initiatives first, but I’m guessing before long there will be companies offering off-the-shelf solutions to smaller hotels and hotel groups. The opportunity for upselling and cross-selling is obvious, and something the hotel companies I worked with were always searching for.
Does this help?
Well it does, its just another buzzword to me, our larger clients already do all these things, what we call it is neither here nor there.
My biggest single challenge with clients is that they don’t ‘talk to’ the bulk of their on line travel bookers because of the huge power wielded by OTC’s which represent the majority of their on line booking right now – and the fact that they do everything possible to stop hotels getting info about these bookers, who are all potential repeat and loyal customers to the property.
I failt o undxerstand how we continuously fail to get the message across to the travel booker that they’re better to book directly with the hotel, for a whole host of reasons, and to ensure that the hotels deliver on these reasons.
@Gilmour says “how we continuously fail to get the message across to the travel booker”
In the past dozen occasions I’ve use an OTC, the reception clerk has always acknowledged “You’ve booked with XX OTC and are fully paid.” Never once has the person mentioned or suggested that I book direct, that I should remember to link the stay with the loyalty program, asked for an email address so they could send me a questionnaire about my stay, or given me any reason to act differently.
Though I’m a big proponent of Big Data value, a small personal gesture will trump it 100% of the time.