What Does it Mean to Be Data-Driven in a Real-Time World for Travel and Hospitality?

The travel and hospitality sector has been hit extremely hard by the COVID-19 pandemic with lockdowns affecting travel, accommodation and entertainment globally, significantly reducing revenues within the sector. However, as vaccination rates increase, governments are loosening lockdowns and allowing travel, enabling the travel and hospitality sector to reopen its doors.

Why is Data a Priority in the Travel and Hospitality Sector?

As the travel and hospitality sector starts to think about the future, it is important that they consider the role and importance of data on their long-term plans.

New Ways to Travel

The travel and hospitality sector has undergone a transformation in the past decade. Previously, customers would visit a travel agent who would handle every aspect of their holiday planning, from booking flights and arranging hotels to planning excursions and renting cars, as well as handling any issues that occurred if something didn’t go according to plan.

Today, customers act as their own travel agent, researching the best flight times and routes, finding the most suitable accommodation in their destination, planning what to visit and when, booking taxis, and more. While customers would probably enjoy leveraging the benefits of a travel agent if something goes wrong, it is unlikely that they would want to replace the new way of arranging travel with the old.

Customers still want to book their own trips, but they want a better and more connected service from all the separate travel organizations they utilize. Each of these organizations currently use AI to help customers make bookings for individual aspects of their travel plans, but they need to find a way to expand their offering, linking these individual aspects into a connected journey that takes customers from their home to their destination and then home again.

AI Augmented Solutions

As travel and hospitality organizations start to look at the wider customer journey, they need to consider how they connect with their customers, the role data has in this, and the way that AI and employees work together.

For example, while AI can make recommendations and link different parts of the customer’s journey together quickly, there are times that the customer will prefer to speak to an employee. During these interactions, the employee should be able to access the data and insights prepared by AI, so the customer has the best of both worlds: the speed and agility of AI solutions augmented by the human touch.

New Revenue Streams

Another potential that data offers is the chance to monetize data and open new revenue streams. For example, as organizations look to expand and deliver a connected journey, they will be interested in exploring anonymized data from linked markets to understand the potential business benefits, partnering with other organizations that offer synergies, and/or adding services to their existing business based on the preferences of their customers.

Know Your Customer

Data can also be used to build brand loyalty. By using data gathered from different channels and consolidated into a complete view, you can get to know your customers, enabling you to forge deeper connections, and sell, upsell, and cross-sell more.

Organizations that believe it isn’t important to use their data to get to know their customers better will find themselves losing customers as their competitors do it for them.

Turning Data into Insights

Gathering and analyzing historical data can help organizations gain insights into their operations that lead to new approaches to internal processes, proposals for targeting new markets, or suggestions on how to improve customer service. These can all help increase revenue, reduce costs, and improve the experience for both employees and customers.

What Impact has AI Already had on the Travel and Hospitality Sector?

AI is used to quickly detect who each customer is, as well as their preferences, before combining this with external real-time data and purchasing patterns of other customers with similar preferences to make suggestions that the customer is likely to be interested in. As AI develops, these recommendations are likely to become more targeted and personalized, greatly increasing the chance for upselling.

Ratings and rating review sites also use AI. These services have resulted in more transparency in service levels, helping to increase overall service levels in the industry. When potential customers are increasingly likely to check a review site before selecting a restaurant, hotel, or other tourist attraction, there is more pressure on the organization to always ensure a consistently high level of service to attract new customers and encourage existing customers to give high reviews. However, this pressure has also led to a rise in false reviews.

How Can Travel and Hospitality Organizations Become More Data-Driven?

For an organization to be data-driven, the organization needs to put data and AI at the center of its policies. This requires some changes in the structure and approach taken by the organization, for example:

• At the Heart of Every Strategy
  Data and AI need to be integrated into every investment strategy, instead of being added at the end as an afterthought.
  
  
• Connecting Existing Data Sources
  Existing pockets of data and AI should be connected to cut across the entire organization to avoid duplicate data gathering and to ensure a smooth journey for all customers.
  
  
• Collaborations
  Collaborations with other organizations in your ecosystem might be necessary to acquire the data you need. New sources of data are likely to encourage different ways of thinking and generate new insights that might lead to new business opportunities.
  
  
• Generate Insights
  Existing and new sources of data can be used to gain insights into the trends in your business, potential growth areas, and investment strategy. Without insights guiding your organization, it is possible that other organizations will overtake your competitive advantage.
  
  
• Create Brand Loyalty
  Loyal customers are happier to share more data about themselves when they trust a brand. With this extra data, you will have a better idea of your customers and what they want and need.
  
  
• Top-Down Strategy
  Define a clear business rationale for becoming data-driven, including stating the desired outcome, before developing a strategy to achieve this goal. This is more effective than creating a strategy based on the available data.
  
  
• Utilize the Cloud
  Cloud technology is flexible, expanding and contracting based on the needs of your organization. This allows you to experiment with different functionalities, capabilities, and more, and only pay for the storage space you need.

Looking to the Future of the Travel and Hospitality Industry

As we have seen, data and AI are at the heart of the approaches that travel and hospitality organizations are using to optimize their business by forging new and deeper connections with their customers, lowering costs, increasing revenues, and improving the employee experience.

Is your organization ready to benefit from data and AI? Learn more about how data and AI can play an important role in staying relevant and seizing business opportunities in the future.