Big data hero
David MacHale

Big data and AI for travel - how to get ahead in the digital era

February 21, 2020

In recent years the pace of technological change has been quite overwhelming. Augmented reality, virtual reality, artificial intelligence, machine learning, big data, and wearable tech (to name but a few) are all buzz words that have crept into business conversations across all industries. The scope of these innovations has led to a lot of exciting future gazing, but according to The ITIF, the penetration in business for most of these is less than 50%.

It’s not that the technology isn’t practical, we haven’t had the time to implement them in the best use case for business.

At the World Economic Forum 2016 in Davos, President Klaus Schwab described this most recent period of innovation as the “Fourth Industrial Revolution”, the digital era. Schwab claimed it will affect “the very essence of our human experience and transforming the business models of each and every industry.” We believe 2020 will be the year where that prediction comes to fruition.

The evolution of air travel

The travel industry has seen its fair share of progress driven by technology.

  • The first age of air travel started in 1903 when the Wright brothers beat out the competition to successfully create an aircraft that could stay up in the air. It took till 1933 for American Airlines to begin offering commercial flights to the rich and famous. In 1954 the development of fixed-line communications led to airplane tickets being booked over the phone.
  • The second age began in the 1960s with the introduction of computers. It wasn’t until the 1990s that the biggest leap forward was made when the IBM 390 mainframes were introduced, initiating major enterprise transaction processing environments and databases.
  • During the third age in the late 1990s, the commercial possibilities of the internet began to be realized. The growth of the world-wide web created the online travel agents we know today. The smartphone pushed everything forward again. Steve Jobs prediction was correct when he said this wave of technology would ‘change everything’.

This brings us nicely to today, the fourth age of air travel coincides nicely with the fourth industrial revolution. If we needed evidence that technology is changing “the very essence of our human experience and transforming the business models of each and every industry” look no further than our Travel Trends 2020 eBooks. In our survey of over 23,000 end travelers from around the globe, we found out:

  • Though mobile is not as popular as desktop, the vast majority of travelers (~75% of leisure and ~80% of business) have booked and paid for travel on a mobile device at some stage.
  • The number of travelers with the same or more travel-related apps on their smartphone has risen 5% to 87% in 2019.
  • 78% of travelers will choose accommodation based on whether Wi-Fi is available for free, which ranks higher than good online reviews and having a gym onsite.

As the digital era continues to unfold we will see more adoption and penetration of the technologies mentioned earlier – especially artificial intelligence, machine learning, and big data. We should be mindful that when you mix technology with social change big things can happen. The “Greta effect” has helped exacerbate the rise of the environmental traveler. Gen Z, the C-suite of the future, has grown up with data collection and are more aware of the pitfalls and uses it can have. They are comfortable with sharing data if companies can deliver exactly what they want in their communications. This provides a massive opportunity to embrace the change and redefine the travel business.

In our Mobile Travel Trends 2020 eBook, we describe how these technologies will help shape some of the trends in the coming years.

If you want to find out a little bit more about the travel trends that will shape 2020, you can view all our report, blogs and infographics HERE.

The data revolution

Data has become the greatest asset for business, and it is being generated at an incredible pace.

A whitepaper published by market intelligence company IDC suggests that the world will have 175 Zettabytes of data by 2025 (one zettabyte is 1,000,000,000,000,000,000,000 bytes or trillion GB).

How will the new data scale impact the travel industry in 2020? The continued growth of digital technologies in the coming years will transform the way business and leisure travelers plan and act.

The key factor in winning and retaining customers is providing them with greater personalization than ever before. To achieve this, various types of data from multiple sources need to be processed.

Today, the majority of travel brands are still gathering data from internal sources, which are of a limited quantity, and of relatively modest size. However, we know these data sources are not limited to traditional internal channels. Think about when a traveler is planning a trip; they will use some travel or social media apps for research, booking is done either through a TMC or travel agency, an OTA, or direct with a vendor such as an airline or hotel. When at the destination travelers lookup local amenities, traffic or weather, and finally experiences are shared with family and friends post-trip.

A simple booking process with a single user will generate a vast amount of data from at least 10 different data sources. Most companies are failing to leverage all of these data points to make travel experiences more personalized. They need to focus on using more external data from disparate sources and in varied formats.

The trend for travel brands in 2020 will be to switch from traditional statistic-based reporting solutions to more advanced analytics solutions that can process all forms of data. From traveler patterns and predictive analytics through to financial analysis and everything in between.

The rise of the machine(s)

An abundance of data can bring more problems than solutions if we don’t know how to process it. Thankfully, we can get the machines to do it for us.

The application of artificial intelligence (AI) and machine learning for travel is immense. From helping travelers save time by simplifying search to helping businesses save money with more effective policy parameters, machine learning is revolutionizing what it means to book and manage travel. Because of this, forward-thinking, growth-focused travel brands need to recognize the opportunities AI is creating for them in corporate travel.

AI powered computer systems can perform tasks that normally require human intelligence, such as speech recognition, visual perception, and more. Machine learning is a subset of AI through which machines are programmed to independently analyze huge amounts of data, looking for patterns, and then making decisions based on the patterns it identifies with minimal human intervention.

Like Amazon or YouTube can predict the content you are most likely to engage with, a corporate travel booking solution combined with machine learning would be able to predict options for travelers that they are more likely to book. It learns from each search, showing the customer the most relevant results, all while remaining in-policy by balancing cost with particular search variables such as location and flight times.

Travel brands such as TripActions have used this technology to display the most relevant flights, transport, and accommodation that their travelers are most likely to book, cutting the booking time down from an industry average of 60 minutes to just 6 minutes.

Support is another critical role expected of corporate travel managers that can be dramatically improved by machine learning. By analyzing data, an intelligent solution can see how much a customer travels and if that customer needs extra assistance with the booking. For example, if a traveler searches twice or more before a trip that is a few weeks away, TripActions can tell this traveler is 95% less likely to book during these sessions. This identifies through machine learning where to trigger human support to offer extra help.

What’s next?

You can visit our Travel Trends hub to view all our forecasts for the coming year.