Today’s travellers are creating more and more digital data, helping savvy tourism operators refine their product and grow their revenue
The era of the travel agent is all but over. Today’s tourist is more likely to select his destination based on something she read on Facebook or a photo he liked on Instagram. Travellers begin browsing the web months ahead of their trip – visiting travel websites, reading reviews, researching attractions. All of which generates a huge amount of digital data. This avalanche of travel information is a goldmine for tourism operators, providing insight into who their customers are, what they want and how they can be reached.
A DIGITAL TRAIL
74% of leisure travellers and 77% of business travellers turn to the web when deciding where or how they want to travel, according to a 2014 study by Google and Ipsos MediaCT. Travel agents have fallen out of favour in recent years with only 13% of leisure travellers using their services. Online, potential tourists look at a wide variety of content including YouTube, search engines such as Google, and travel review websites. Millennials are likely to be swayed by social media in particular. According to a study by American Express Insights, 84% of millennials say user-generated content has a real impact on their travel decisions and 57% update social media every day while travelling. In this way, just one Facebook photo of a group enjoying sunset cocktails in Antigua can ripple through the social network to create multiple bookings for that destination.
Everyone planning a trip leaves a digital trail – through booking sites, social media and online forums – and hot on their heels are tourism operators, eager to find clues on who these travellers are and how to reach them. But harnassing the digital data, and using it to its fullest potential, requires a flexible, innovative and considered approach. The sheer volume of information online can overwhelm marketing departments if they don’t have an effective strategy in place.
Speaking at a recent seminar hosted by the Caribbean Hotel & Tourism Association, Antonia Stroeh, Senior Vice President, Government & Development at Mastercard Advisers said: “Customers are turning to different digital sources in order to plan their trips, making it more difficult to understand their behaviours and more difficult to reach them. This creates an enormous amount of data that is harder to digest and harder to action. New insights and new approaches in marketing are needed to effectively compete in the sector.”
QUALITY, NOT QUANTITY
The type of information generated online – where tourists are visiting, what they want to do, where they want to stay, how much they want to spend – is useful at every level of the sector, from small tour operators to sprawling mega-resorts. It’s also a prime resource for government tourism bodies who have long been familiar with the power of reaching customers through their computers.
Many industry players are now using big data analytics services to manage and process their marketing information – tracking patterns, predicting behaviours and organising data into clear and detailed reports. Airlines were some of the earliest adopters of the technology with British Airways rolling out its ‘Know Me’ programme in 2012. This initiative used big data analytics to reward customers for their brand loyalty, track service performance and better target promotional offers.
Governments have also seen the benefits of big data platforms. In 2015 the Cuban government recruited a Spanish analytics firm to monitor hotel performance, social media chatter and activity from competitors.
Marriot was one of the first major hotel chains to embrace big data in relation to revenue management. The brand is heavily focused on ensuring customer loyalty and uses big data to personalise options for visitors to its website.
International hotel brand Starwood Hotels and Resorts has also invested heavily in its analytics platform, increasing its revenue per room by 5% through better pricing and promotion.
Brands such as Starwood have seen a boost from their analytics investment because they focus not just on the volume of information acquired, but the quality of that data. This is a crucial distinction according to Stroeh: “Lots of destinations do a fantastic job of trying to understand their tourists [but] we are trying to get to the next level of understanding. It is not just about volumes of tourists but the quality [of these tourists] and what they care about.”
BENEFITS AND CHALLENGES
Attracting quality tourists requires precise marketing. Big data can help identify how tourists perceive destinations, how much they are prepared to spend, what they value in terms of experiences, how they feel about competitors and when they like to travel. All of which adds up to intensely customer-focused marketing which not only helps a company’s bottom line, but makes for happier, more satisfied customers.
Leveraging big data will help those in the tourism industry make smarter investments and identify new niches – throwing up data that indicates if a certain segment has been overlooked or underfunded. It also helps operators weather any global shocks.
With the impact of Brexit still uncertain, and volatility in world markets, operators need to stay on top of emerging trends and be responsive to their customers. In a world where technology’s reach is ever-increasing, those that don’t embrace big data risk falling behind, according to Stroeh. “Use of digital tools will only continue to accelerate.”
Big data should not be seen as a panacea, however. While a tool for better decision-making, it is not risk-free and comes with its own set of challenges regarding data protection and privacy. Safeguards must be in place to ensure responsible handling of customer information – prioritising transparency and consent. These measures, combined with platforms used to analyse big data, can be a significant cost outlay for smaller firms, for whom the necessary expertise can be cost-prohibitive.
As digital tourism increases, the need for analytics will only grow. But while crunching the numbers can throw up valuable insights, it cannot replace genuine innovation and creativity. In an industry which has people at its core, the best marketing is based both on data and human ingenuity.