How data can overcome the travel commoditization

30/11/16

In many cases, the tourism industry has become a commodity, similar to sugar, oil or steel, where the product is not distinguished from competitors and the main way of differentiating supply is price. In fact, it is fair to say that today there is little difference between low-cost flights or between business hotels, for example.

The price dilemma was the main theme in the recent EyeforTravel event in the United States, where there was a clear recognition that this approach is not easy and the only way to highlight is through digital innovation and data.

The challenge

Clearly there is a challenge for tourism companies that depend on differentiating their product to remain competitive. So the big question is: how can suppliers create a significant difference in their products to keep customers loyal and at the same time remain competitive in price? The answer to this challenge lies in the effective use and intensive analysis of the data.

“The only way to overcome commoditization in the travel market is through personalization and smarter use of data. Brands need to understand who their customers are, where they are traveling to, when and why. With this data they can discover what to do to stand out from the competition. ” (Carlos Sánchez, senior manager of data analysis and innovative products of business travel agency Carlson Wagonlit Travel)

The solution

One way to make a standardized product look different is by wrapping it in an experience that sets it apart. For example, while each ticket is essentially the same if you are looking only for the basic aerial part, the difference can be in the improved airline end-to-end travel experience with the addition of extra services. These services can include better application functionality, offering simpler bookings, quicker check-in and easy access to additional services, stories such as airport trips and others.

Likewise, commoditized hotels can improve their experience with additional benefits, such as check-in in advance, room-key application, digital concierge services, customer recognition, individual rates, etc.

Thus, while the commodity itself is undifferentiated, the customer perceives the overall experience as positively memorable. “Everything is geared towards making the trip the best experience it can be, an experience that stays in your mind and makes you choose the same company the next time you travel,” says Sanchez.

What makes it much easier today is the increased use of mobile devices by travelers, the availability of large amounts of data in the customer base, and precise artificial intelligence algorithms that help identify ways to make business travel easier and more memorable.

And in practice?

For example, Pmweb offers a complete infrastructure of data services and technologies oriented to the hospitality industry. Every day, through integrations with the major PMSs in the market, receiving large amounts of data from the guests, performing the collection and processing of the data from customers’ web behavior on the client’s website.

This data, integrated with Pmweb CRM, can be used in online campaigns for pre-check in, post-check out, abandoned reservations, reviews, cross-selling and others. In addition, the data can follow the strategy of individual fare prices on Let’s Book, the booking enginethat uses this data, taking into account factors such as frequency, average tickets, geographic and demographic profile, email interaction and others.

However, whatever tools are chosen, business intelligence platforms can be based on four key features:

  • User-centered, event-based data model
  • Cross platform – covering native application, mobile site and website
  • Real-time data collection, manipulation and export of raw data at any scale
  • Data accessible through simple, easy-to-use tools that allow people to get answers to questions.

Source: eye for travel

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