Study finds travel industry plans to step up its use of analytics
An MIT Sloan Management Review report, in collaboration with SAS, The Analytics Mandate; Path to Innovation in the Hospitality, Travel and Transportation Industry, found that nine out of 10 respondents from the travel industry believe their organizations need to step up the use of analytics to make better decisions.
While using analytics for decision making is not new to the travel and transportation industries, the primary focus for analytics applications has been in pricing and revenue management. In the early 1980’s, airlines adopted yield management systems to maximize revenue, and over the last 20 years, hotels, cruise lines, and car rental agencies have followed suit. While price is certainly a critical factor in the consumer’s buying decision, pricing alone does not guarantee purchase. For continued success, the industry needs to expand analytics usage for a deeper understanding of customers, preferences, brand perception and digital behavior.
While many travel organizations believe that they lag in their use of analytics, this is a trend that may be changing. The survey also found 63 percent of respondents in the travel and transportation industry believe that over the next 12 months the primary investment in analytics will be on analytics technology, which is significantly more than other industries at 52 percent. Fifty-six percent of respondents in the travel and transportation industry believe that analytics investments will be in the area of training, compared to 49 percent for other industries.
This is a positive trend and the industry knows it. Fifty-four percent of the survey respondents agree that analytics creates a more competitive organization. Like other industries, hospitality, travel and transportation organizations understand the relationship between analytics usage and innovation. More than half of respondents (51 percent) agree that analytics has improved their organization’s ability to innovate – a response that is similar to other industries (50 percent).
Recent trends in unbundling services and even rebundling, or packaging, various a la carte services (baggage fees, meals, Wi-Fi) are becoming more prevalent. The use of analytics to determine what, how and when to offer these services is a valuable addition to an airline marketing department’s toolbox.
“With the amount of data the travel industry collects – from loyalty cards, review sites, online browsing and bookings – they have a treasure trove of customer insights available to them,” said Kelly McGuire, PhD, Executive Director of the Hospitality and Travel Global Practice for SAS. “Clearly there is a huge opportunity here and I am encouraged to see that the industry plans to invest in analytics technology and training.”
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