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Anna Papachristos | December 18, 2013

Big Data's Impact on Holiday Travel

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Holiday-Travel-XSmall.jpgWhile many consumers are scrambling to purchase last-minute gifts, others are plotting and planning their holiday travel itinerary. But travelers aren't the only ones preparing for the rush at the airport. Many travel businesses are now using Big Data, behavioral trends, and text analytics to adjust their operations accordingly.

"Customer feedback is a vital part of the service experience, and more often than not, without text mining tools that go beyond keywords to meaning and intent, most of the feedback can go unanalyzed," says Tim Simmons, vice president of industry marketing and solutions--retail, travel, transportation, and hospitality at Teradata Corporation. "Text analytics make it possible to not only make use of 100 percent of the data--not just the squeaky wheel--but also integrate it across internal sources, such as booking records, complaint forms, and flight attendant feedback, and external data such as customer reviews, blog sites, frequent traveler forums, and social media."

By bringing in Big Data and predictive analytic tools, airlines now have the ability to offer a wider range of prices, mobile and Web service advances both on the ground and in the air, and loyalty programs that move beyond mileage earn and burn to strengthen engagement. Here, Simmons highlights precisely how Big Data impacts travel companies during the most hectic time of the year and how these businesses can use analytics to remain competitive:

Three Ways Big Data Influences Travel Operations During the Holidays

1. Reliability and safety--Because the travel industry operates 24/7 business, companies feel the heat more painfully when planes are packed with customers traveling on holiday. Every breakdown or interruption takes longer to recover because resources are fully utilized. However, because modern airliners have hundreds to thousands of sensors on them, the careful examination of every flight reveals details of mechanical performance, airmanship, and environment, resulting in a continuous series of adjustments that not only continue to improve safety, but also mitigate delays for mechanical reasons.

2. Weather--Being able to forecast conditions affects everything from reliability and fuel consumption, to irregular operations recovery. "Whether you are a FedEx or an aircraft operator that optimizes fuel onboard based on winds, or an airline that manages the effect of weather on irregular operations by predicting delays and rerouting passengers proactively, the effect is higher service levels at lower costs," Simmons emphasizes.

3. Demand and revenue management--By analyzing daily advanced booking trends by flight up to a year in advance, airlines can plan the number of seats sold by price point. The integration of bookings with customer behavior data has also enabled airlines to offer a wide range of prices to stimulate demand and ensure seats are always available to last minute business travelers. Ultimately, new ways of integrating even more behavioral data into these analytics will expand the market and provide more consumer value.

Three Analytical Capabilities Every Smart Travel Business Must Adopt

1. 360-degree view of customer--Businesses must combine both the individual customer transaction data with individual customer behavioral data to build more robust and useful predictive tools for delivering the price, service, and loyalty transactions that customers value. For unknown customers, it's about the path to customer acquisition, which depends upon understanding clues about the customer's motivation. For known customers, there is the opportunity to grow share through relevant offers, though companies also need to carefully monitor for signs of and reasons for attrition.

2. Customer value scoring--Less than 50 percent of every major travel company's daily revenue comes from members of their loyalty program. The remainder comes from first time customers, repeat buyers, and those who are driven primarily by price. Without a customer valuation program that includes robust value integration and ranking capability, a company can be sidetracked and/or financially challenged in managing the different customer groups and delivering value to each.

3. Operational intelligence--Companies must find ways to integrate their strategic intelligence about customers into the operational environment, for delivery of just the right subset of customer-specific information to frontline locations can be crucial when taking necessary action. From customer service history delivered to a flight attendant, or a personalized Web page based on behavioral targeting, the customer needs to be met where they are with either service or marketing messages that add value.

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