Study Urges Travel Industry to Embrace Big Data

by   |   June 26, 2013 1:24 pm   |   0 Comments

Travel companies are at “a crucial big data crossroads” as they confront the challenge of harnessing volumes of new, unstructured data to improve customer loyalty, streamline operations and boost financial performance, a new study concludes.

“The industry needs to step up to the plate and take advantage of this very powerful analytical resource,” Tom Davenport, a visiting professor at Harvard Business School and author of the report, said June 26 in an online briefing.

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The study notes that, so far, the use of big data analytics is confined to early adopters who have used the technologies to enhance internal operations, optimize revenue management and “customize travel distribution.”

Davenport’s study, “At the Big Data Crossroads: turning towards a smarter travel experience,” was sponsored by Amadeus, a vendor of software and services for the global travel and tourism industry.

“This is a call to action for travel organizations,” Davenport said. “Big data has a vital role to play in delivering a more efficient and tailored travel experience with benefits to both travel companies and travelers alike,” Davenport writes in the study’s executive summary. “However, its potential is still confined to early adopters in the travel sector, and this study calls for more widespread consideration across the industry about how new approaches to big data can yield significant opportunities.”

The study cites several specific ways big data can help travel companies, including enabling better decision support, developing ideas for new products and services for customers, improving customer relationships, and streamlining operations.

But there are “technical and operational challenges associated with big data adoption” in the travel industry, the study says. Among them, Davenport said, is the need to create an integrated data source from “a lot of siloed and fragmented data.”

“The ability to integrate data and make sense of diverse sources of data is more important than ever before,” Davenport said.

Another obstacle travel companies must overcome before leveraging big data is a familiar one across all industries – a shortage of workers with big data skills. Davenport said Wednesday this could be a particular challenge to larger travel companies because many “data scientist types like to work for smaller enterprises.”

The 32-page study outlines numerous recommendations for travel enterprises that are preparing to leverage big data. First and foremost is to seize the moment. Specifically, the study recommends that travel enterprises research and strategize about big data, but also go beyond merely learning about big data technology to adapting business and operational processes to better leverage data.

Other industries offer lessons. As an example, the study cites efforts by GE to place sensors in jet engines: “GE hopes to capture the resulting data to better optimize its own service contracts, and the businesses of its travel provider customers. Even small benefits provide a large payoff when adopted on a large scale. GE estimates that a 1 percent fuel reduction in the use of big data from aircraft engines would result in a $30 billion saving for the commercial airline industry over 15 years.”

The study also urges travel companies to begin finding people with data science skills. “If you don’t want to hire them internally, start exploring what vendors or consulting firms can supply them to you,” the study recommends. “Make sure they are adept at data management, analytics, and solving and communicating about business problems. If you have to hire a team to compile all these skills, make sure they work well together.”

Finally, Davenport’s study emphasizes the importance of working with partners: “The travel needs of today’s customers are intermodal, international, and interactive. No single travel provider is likely to meet any customer’s needs for a seamless experience. Start now to partner with other firms to provide the big data experience that your customers want.”

Contributing Editor Christopher Nerney ( is a freelance writer in upstate New York. Follow him on Twitter @ChrisNerney.

Home page image by 1950sUnlimited via Flickr.


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