Nick Williams asks how travel companies can use BI more effectively to drive forecasting accuracy and accelerate business growth.
The first six months of 2018 are set to be exceptionally challenging for the travel industry. Accompanying the traditionally busiest sales period for the sector are three major regulatory changes – the introduction of revised Package Travel Regulations, a ban on credit card charges and the much-discussed General Data Protection Regulation (GDPR) – changes that have the potential to cause dramatic knock-on effects on businesses across the globe. For an industry which already faces the difficult task of responding to ever-changing customer tastes and trends, as well as trying to keep pace with rapid technological advances, and not to mention having to deal with the still unresolved issue of what shape and form Brexit will take, 2018 will see added pressure to stay one step ahead in an already uber-competitive marketplace.
A fine forecast?
For many companies operating in the travel industry, the holy grail of doing business is successful forecasting, predicting with greater levels of accuracy where, when and how people want to holiday and travel. The more accurate the demand forecast, the more profitable travel companies can be, ensuring cost and efficiency savings across the business, as well as optimum levels of customer service which result in that all-important customer loyalty. Savvy travel businesses are doing just this, using advanced Business Intelligence (BI) tools to more effectively analyse patterns in customer behaviour, market trends and socio-political-economic factors to not only support accurate forecasting but to better predict wider market conditions, standing the business in good stead to weather any storms they might face.
Where the travel industry has a head-start on some other industries is the sheer amount of data it has at its disposal. The combination of such data sources as name records, transaction histories, pricing lists, customer feedback surveys, call centre logs, to name but a few, means a great deal of data for businesses to wade through. However, putting this data to good use is where the travel industry often lags behind. What’s needed is the power to turn this data, much of which is unstructured, into valuable business and market insight.
Sector specific data
The right BI solution provides the ability to explore and analyse data from a variety of different sources, data which is then amalgamated and comprehensively analysed. The extensive reporting capabilities that come as standard enable you to slice and dice the information in a variety of different ways. So, you might choose to focus on sales or gross profit, destination or customer reviews, or analyse the customer satisfaction index, or in fact any combination of these. Businesses can report by product, tour code, departure date, region, PAX, customer and many more besides, converting raw data into meaningful information, presented in accessible, easy-to-understand formats.
This 360° view of the organisation, its customers, its prospects and the wider market, gives the depth of insight needed to quickly build accurate forecasts for the coming months. For example, when it comes to customers, you can begin to understand what drives repeat business and how demand varies according to a whole host of different variables. The ability to focus on capacity and pricing optimisation is made much simpler also, without having to rely on complex spreadsheets and time consuming analysis. The fact that you can analyse more data, faster, incorporating real-time information on the state of the market, leads to more dynamic pricing actions and optimal capacity planning too, meaning the business can readily identify and rectify gaps in planned capacity and actual demand.
BI functionality that will prove exceptionally useful to travel businesses, certainly over the next 12 – 24 months and beyond, is the ability to use predictive, ‘what if’ capabilities. With Brexit uncertainty still looming large, predictive modelling can be put to good use to forecast not only future market conditions, but potential customer behaviours based on a whole host of different scenarios. This ability to predict how events such as Brexit can affect bookings, travel patterns and even preferred destinations, represents a huge opportunity for travel businesses, enabling them to hit the ground running when it comes to change (in its many guises), putting proactive strategies in place to optimise operations, avoiding a situation where businesses attempt to close the stable door after the horse has bolted.
This ability to make maximum use of the massive volumes of data available to travel businesses should not be overlooked. With pressure on the industry only set to increase over the coming months, tools that can uncover valuable business insight to underpin robust, proactive decision-making are no longer just a nice-to-have. This unprecedented access to real-time, accurate and meaningful data cannot be underestimated, giving you the potential to optimise business agility and foresight, enabling you to and your business to stand firm in the face of the change.
What to look for in a BI solution:
- Talk to the business from day-one to ensure their buy-in from the outset.
- Understand your specific forecasting needs, what do you already know and where are your knowledge gaps?
- What do you want to achieve in the short term? What are your longer term goals?
- Reports and dashboards should be easy to use and understand; don’t add another level of complexity.
- You need a solution that can cope with the specific needs of the travel sector. What works for one industry doesn’t necessarily work for all.