In this article, we’ll take a look at five key data science tips for travel companies that want to innovate ahead of the curve.
The travel industry has been one of the most responsive sectors in adopting data science and latest technology innovations. Staying relevant in the age of Airbnb and Google’s expansion into travel services is the biggest challenge facing brands in the industry. Those that fail to adapt disappear and we’ve all seen how spectacularly this can happen with the recent collapse of Thomas Cook.
By failing to make the digital transition and adapt to
changing technologies, the world’s oldest travel brand proved that
even giants can fall if they fail to adapt.
Data science is the next revolution in travel bookings and some companies are already using the technology to cement their position as industry leaders and future-proof their businesses.
Here are five data science tips for travel companies.
Hyper-personalisation uses big data and AI to deliver personalised offers and experiences to individual consumers. By treating customers as individuals and delivering unique services/offers based on their preferences, hyper-personalisation encourages travellers to spend more, while increasing brand loyalty through more enjoyable experiences.
We’ve mentioned hyper-personalisation as a key strategy for travel brands before. With 86% of travellers saying they value personalised offers, the industry can’t afford to ignore the demand for richer, personal experiences. Those that do will be left behind by the likes of Google, Airbnb and Skyscanner that are all moving to provide this kind of experience for their users.
An example of this in action is Mezi, which was recently acquired by American
Express. The platform recreates the travel agent experience for the digital age
by providing an end-to-end booking experience for flights, hotels and dining
for corporate travellers.
Major travel brands are also using hyper-personalisation to enhance the post-booking experience for travellers. Virgin Hotels has launched a personal assistant app customers can use during their stay. They can request extra pillows, laundry pick-ups, a turndown service, valet or even change the temperature of their room using the app. Meanwhile, Delta Air Lines and other airlines are using similar technology to personalise the in-flight experience and reward customers with flight miles or gift them points for any in-flight issues they have.
Check out our travel marketing experience here
Another key application of hyper-personalisation is
delivering data-driven recommendations – something we’ve all seen on platforms
like Amazon, Netflix and Spotify. We’re also seeing this from the likes of
Expedia and Airbnb that use AI to deliver personalised recommendations to
Data science is capable of so much more, though. Booking platform Hopper uses AI to predict travel prices for flights and hotels, up to one year in the future with a 95% accuracy rate. The platform helps travellers choose the best time to make their bookings for the best possible deal.
More than 30 million travellers around the world have used Hopper to track and book trips.
Prices aren’t the only factor that affects people’s travel choices and it’s not the only thing travel companies can use predictive analytics for either. The same algorithms that compare user data to provide relevant recommendations can predict the future actions of users as they progress along the booking process.
This technology increases booking rates, reduces drop-outs
and allows brands to deliver more relevant messages every step along the way.
It can also help travel firms overcome barriers getting in
the way of bookings. We’ve already seen how Hopper helps travellers get the
best deal on their bookings. What makes this so special is that it locks users
into the platform because they know they’re going to get the best price by
continuing to use the platform. Even if they don’t book now they’re going to
come back to Hopper for the booking later.
Research from Expedia (among others) suggests price is the most important factor in travel booking
choices. Hopper capitalises on this by making prices its key selling
point and all it needs to do is notify users when the right time has come to
book their ticket.
Incentive is sky-high.
Not all studies point toward prices being the top priority
for travellers, though. Others show safety is the most important factor with holiday-makers
wanting to know they’re heading to safe locations. This can mean anything from
political unrest, conflict, extreme weather, natural disasters, crime rates and
all kinds of other factors – all of which can be predicted, at least to some
extent, with data science.
Data science also has a lot to offer behind the scenes by
making your marketing strategies more efficient. We’ve just mentioned how
factors like extreme weather and political issues can impact on people’s travel
plans but these are also disruptors for travel brands themselves.
The protests in Hong Kong haven’t done much for travel bookings to the island, while the diplomatic fallout between Japan and South Korea has had a major impact on traveller numbers between the two countries. Likewise, the recent floods in Italy have caused all kinds of problems for local businesses, travel-related businesses and tourists.
When incidents happen travel brands need to react and the
first step should be automating actions to adapt your marketing strategy. For
example, you might want to automatically pause ads for affected locations,
redistribute ad spend and adjust budgets to reduce the negative impact. You can
also use dynamic pricing to reduce prices for affected areas and possibly even
increase them elsewhere to reduce the deficit.
Don’t forget about existing customers and those already in
affected locations. You should automate travel advice emails, notifications and
whatever else you can send out to help your customers deal with any surprises.
Finally, make sure you don’t automate everything for customers who experience
problems. Automate rapid responses but make sure you have a human team in place
to show your customers they’re not alone in their time of need.
According to BIMA, the biggest challenge modern travel companies face is building brand loyalty. With so much choice available, competitive pricing and the transparency of customer reviews, travellers have little reason to stay loyal to brand names.
The solution to this problem brings us back to
hyper-personalisation. A 2018 report by McKinsey found that 69% of
customers are more loyal to a travel company that personalises their online and
offline customer experiences. Travel is inherently all about the experience and
everything brands can do to maximise the enjoyment of these experiences, the
stronger brand loyalty becomes.
Positive experiences need to be reinforced with relevant
messages, delivered at key moments. These are ultimately the messages that turn
previous customers into second-time and repeat buyers. Data-driven
recommendations are a powerful tool for this but the leading travel brands are
learning more about their customers individually to understand what matters
most to them – pricing, convenience, luxury, weather and any combination of
Of course, you need to get your hands on the right data before you can do this. Thankfully, research from Salesforce shows 57% of consumers are willing to share personal data in exchange for personalised offers or discounts – so leverage this incentive.
Data science is changing the way top travel companies engage
with prospects and create customer experiences. In the case of emerging
platforms like Mezi and Hooper, innovators are putting data-driven
personalisation at the heart of their business model, in a way that increases
the value of using those apps with every booking.
By improving customer experiences, streamlining marketing strategies and helping travel brands increase loyalty, data science will be key in overcoming the biggest challenges businesses in the industry face. It could be the deciding factor between the travel brands that make it and the ones that don’t.
If you’d like to talk about how data science could enhance your digital marketing, talk to our team today on 02392 830281 or email us.
Chris is Managing Director at Vertical Leap and has over 25 years' experience in sales and marketing. He is a keynote speaker and frequent blogger, with a particular interest in intelligent automation and data analytics. In his spare time, he enjoys playing the guitar and is a stage manager at the Victorious Festival.
Categories: AI, Travel
Categories: Data Science
Categories: Data & Analytics, Data Science, Travel