According to Michael LeBoeuf, American business author and management professor, “A satisfied customer is the best business strategy of all.” The travel, tourism, and hospitality (TTH) industry was one of the first to embrace this concept, even before the arrival of the ecommerce boom. The industry was quick to realize that a customer on vacation is out to build happy memories while a customer on a business trip is looking for friendly and professional services. However, with increasing competition, the challenge for industry players today is delivering positive experiences, while bolstering cash flows and optimizing working capital.
So how do you stay ahead in this fast evolving market? The good news is industry growth and spend statistics look promising. The United States Commerce department predicted that by 2020, 96.4 million people will travel to the U.S., a growth of 29% from 2014. It is estimated that travelers to the US spent a whopping $221 billion on travel goods and services in 2014.
Analytics will be key to TTH companies’ ability to provide excellent customer service while not losing sight of their key numbers, by providing insights and identifying trends. Given the rise in online bookings, there is a rich source of data available to understand user preferences. The avalanche of user data includes not only demographic and psychographic data, but also data from social media and mobile data. Let’s look at some ways that TTH firms can mine such data to deliver greater customer value and improve business performance.
Personalize offers and campaigns
British Airways (BA) introduced the Know Me program to acquire an integrated, 360 degree view of customer habits and preferences. Through this program, BA uses analytics to reward customers with loyalty programs and provide targeted offerings that indicate personal recognition of the customer. While TTH firms have traditionally worked well with structured data such as booking details, food, seating, room preferences, and customer’s travel dates, analytics has highlighted the importance of harnessing unstructured data. For instance, a customer may make enquiries on a website or post a query in social media, but not follow it through to make an actual booking. Analytics can help mine data to discover why the customer might have backed out, and then fine tune the selling strategy to suit the individual’s requirement.
Another application of analytics is to help organizations track campaign performance and generate more traction. With the help of Google Analytics, the New Brunswick Department of Culture, Tourism, and Healthy Living (CTHL) strengthened its seasonal marketing campaign. CTHL was able to evaluate current performance and plan campaign strategies using metrics gathered from the website. This made it easier to customize packages for different traveler customer needs (such as leisure, and adventure). You can also calculate a customer’s lifetime value.
You can also use this information to provide peripheral services. You can combine different data clusters such as travel (flight and other modes) and hotel information to create a holistic picture of the customer. If you add location-based information to this, providing recommendations in real time will be a piece of cake. For instance, travelers entering an airport could be offered discounts or other incentives at their favorite store, restaurant, or cafe.
Balance guest experience and the bottom line
Creating a truly memorable experience while hitting profitability goals can be challenging. Too many cost-cutting measures can compromise service, inviting negative online and offline feedback from customers. On the other hand, excessive discounting can affect the bottom line. Accurate forecasting and pricing models can help you strike the perfect balance. For instance, logistics can be optimized by improving capacity planning and reducing costs. Contextual text analytics can also help you understand sentiments in online reviews and the drivers of guest satisfaction.
Marriott is a forerunner in this space. It uses analytics to manage its revenues efficiently. One big decision area for hotel management is determining the room price based on seasonal demand and other factors. Marriott consolidated its systems to create a centralized repository of information and uses algorithms to improve revenue management.
Analytics in the driver’s seat
Today’s connected travelers have access to a multitude of information. Travel search engines such as Kayak can help customers identify the best day for cheapest deals within their travel timelines. This means TTH companies will have to find new ways to generate value for discerning customers.
You can create customized, once-in-a-lifetime experiences for customers by identifying trends and preferences early on. At the same time, you enable better business decisions, leading to improved efficiencies and top line growth for the company. What we’re saying is, by leveraging analytics, TTH companies can have their cake and eat it too.
How does your organization leverage analytics to stay competitive and achieve business growth?