Amadeus Report Finds Travel at Crossroads with “Big Data” Programs

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Created on Saturday, 29 June 2013 08:21

Big Data is the new buzz phrase in the industry these days, with travel suppliers racing to acquire massive amounts of customer data and then use that information to better target their sales and marketing efforts. With that in mindAmadeus on June 26 unveiled a new report called "Big Data in the Travel Industry," written by Tom Davenport, a visiting professor at Harvard Business School and the President’s Distinguished Professor of Information Technology and Management at Babson College.

The report attempts to show how travel is being transformed by Big Data, though at the same time it warns that the industry is at a crossroads in truly developing effective Big Data strategies. Davenport suggests that other industries, such as retail, are much farther ahead in developing Big Data programs, though within the travel industry online travel website companies and meta-search companies are farther ahead than anyone else.

Davenport interviewed more than 20 travel companies for the report, including British Airways, Marriott, Kayak and Facebook, to see how airlines, airports, hotels, rail firms, and travel agencies are unlocking the power of Big Data, supposedly so they can dramatically improve the products and services they offer to travelers.

In his study, Davenport calls on travel firms to start benchmarking their maturity against the industry while assembling the necessary data science skills and formulating an overall big data strategy for their organizations. He said that Big Data offers major opportunities for travel companies to improve both the business and experience of travel, with the benefits being better decision-making, greater product and service innovation, and stronger customer relationships through new approaches to customer management, revenue management and internal operations.

Davenport finds pockets Big Data innovation in the industry today such as Kayak's price flight forecasting model, which presents customers with the likely change in a flight’s price over a seven-day window; Air France-KLM’s use of Hadoop as the basis of a group-wide revenue management system; and Hipmunk's delivery of a new Agony Index for air passengers.

Davenport also finds that Big Data will be further facilitated by new open-source software for dividing data processing jobs across multiple commodity servers, together with new types of databases including "columnar" and "vertical" approaches, and emerging programing languages like Python, Pig and Hive.

The study also finds that to fully implement Big Data programs the travel industry must overcome significant challenges, including data fragmentation across multiple systems; co-existence of both big data and traditional data management architectures; finding and recruiting scarce big data science skills; and managing data responsibly in the interests of all. Customer privacy also is an issue that must be addressed throughout the process.

“Big data is arguably the biggest opportunity in a generation for travel businesses to embrace the changing structure of data and maximize its use,” said Herve Couturier, executive vice president and head of research and development for Amadeus’ IT Group. “It offers the potential for a vast shift for all travel companies, empowering them to enhance both the business and experience of travel. As with any generational shift in technology, however, the opportunities arrive hand in hand with the potential for significant disruption, which naturally bring many challenges – competitive and creative – for our industry to consider.”

Couturier suggested that Big Data can provide insights that help deliver a more intelligent travel experience than has ever been possible before. Unlike structured data, which has historically been divided into different silos, the ability of Big Data to combine both unstructured and structured data, including data from social media, promises a more integrated view of the travel industry. “This offers travel companies the opportunity to enhance current industry processes, push innovation and build better relationships with their customers,” Couturier said.

Couturier also said Big Data provides an equally important opportunity to “put the fun back into travel,” which he said really all about improving the passenger experience. “Big Data can help to make travel more responsive and focused around traveler needs and preferences,” he said.

In the traditional travel agency space, Big Data programs are still in their infancy, though such travel marketing networks as Virtuoso and Vacation.com, among others, have begun introducing some Big Data capabilities. But Couturier suggests that individual travel agents, travel agencies and travel agency groups will soon have cost-effective ways to access Big Data much in the same way that large travel companies 

To view a copy full report as well as a short video and interactive infographic on Big Data, click on Amadeus Big Data in the Travel Industry.