Drive Data for Better Decision-Making and Customer Fit.
By Ritesh Gupta
Tuesday, 24th September 2013
Setting up a data infrastructure and reaping the benefits is a journey, however, if you use data efficiently to react to market conditions faster, then chances are you could understand your customers better, while also driving incremental revenue.

EyeforTravel's Ritesh Gupta investigates.

If there is one thing that travel suppliers and intermediaries can agree on it is that data is central to decision-making. Furthermore, while it is difficult to define what makes a company truly data-driven, it is also clear that the industry is moving toward measurable ROI-driven models.

For instance, in the past it would be acceptable for any company to work on promotional offers, to spread the message as far and wide as possible and then hope for the best. This was because, quite simply, there was no availability of data. In addition, targeting was not always possible.

"Today technology is more assimilated into the hotel decision-making process and the application of the same to target customers based on the data is easier," explains Devdutta Banerjee, Director Revenue Management at Banyan Tree Hotels & Resorts. "One can look at several data sources and use it to create targeted offers which have a greater resonance with the audience."

Today, travel suppliers and intermediaries must have a basic level of infrastructure to capture all essential data points in every transaction. For example, this could include the usual suspects like customer demographics, booking window, length of stay, average rates, ancillary spend, channel used and so on.

Vital cogs

Indeed, hotel companies which do invest in analytics usually have a robust data warehouse capable of capturing all relevant data points, along with some type of a business intelligence solution that sits on top of this warehouse to slice and dice the data as needed.

Such data infrastructure can prove to be a vital cog in making key decisions and, when it comes to hotels, pave the way for valuable benefits such as driving incremental revenues.

However, in order to do so, says Chinmai Sharma, vice president revenue management and distribution at Louvre Hotels Group, hotel companies should be able to generate incremental revenue:

  • What is the ‘incrementality' of marketing promotions or price discounts
  • Does it make sense to run an exclusive geographic point-of-sale promotion to encourage specific feeder markets?
  • What about cross-referential analytics to assess real value of a corporate client or an OTA partner (for example, which days of week does a corporate account use and what is their ancillary spend in food & beverage or how much of an OTA partner's business is coming on constraint dates, when the hotel ran in excess of 95% occupancy)
  • What corporate and group rates to quote for next year?
  • What is the ideal price differential for each room or suite type?
Take a story-telling approach 

Other than garnering more revenue, a big upside from analytics is the ability to get closer to understanding the buying behavior of travellers. Of course, big online travel agencies like Expedia are clear about what they expect from their data analytics.

According to Arne Erichsen, Director of Market Management at Expedia, the aim is to identify "story telling changes in the consumer behaviour as well as insights around business seasonalities and key matrix". So, in order to fully understand the customer, Expedia looks at every step within the booking process, not only at the reservation as an end result. "It is important to understand the consumer journey on our sites before he starts travelling with us," he says.

When it comes to how travel firms should go about ‘big data' optimisation, especially when it comes to making the most of customer interactions across all digital touch points, Erichsen argues success comes from using data at various levels. For insights at a global level might paint a different picture for a continent, region or country. "A company should not forget that any set of data needs to be turned into actionable recommendations at a micro-level," he says.

Think before you leap

The bigger the quantities of data, the harder it becomes to store, process, analyse and report on.

According to Erichsen, when it comes to finding global as well as regional results it is mandatory to not split data sets based on false assumptions. In other words, don't store different data in different buckets; by sticking to this rule you will be able to see relations in between sets of consumers, he says Erichsen.

When in doubt listen to the experts; they recommend that firms need to get foundational data management working well before jumping into ‘big data'. To this you need to:

1. Finalise the business objectives: what specific business metrics are you going to focus on, how will you shift these and what data do you have that can help you with that.
2. Spot talent and nurtured it within your company: they should be able to comprehend and analyse the data appropriately.
3. Ensure governance principles are in place: who is in charge of data - its depth and availability. Who is responsible for ensuring that accurate data is provided in a timely way for decision-making? And who is accountable for compliance and privacy?

Arne Erichsen, Director of Market Management at Expedia is scheduled to speak at the Smart Travel Analytics Europe 2013 conference to be held in Berlin, Germany (13-14 November).
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