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Data Science in the Travel Industry

Summary

This article will focus on the use of data science in the travel industry. You will also learn more about:

  1. The travel industry and its global digital sales
  2. How data is collected for analysis
  3.  How the collected data is used
  4.  What this means for you, the consumer

Introduction

Our world is all about data; we consume data, share data and analyze data. It does not matter which part of the data industry you fall under- whether you are a consumer, or a producer, you are part of the data-centric world that exists today. With so much data available, it should not be a surprise that everything around us is influenced by it. From our likes, dislikes, influence; you might not realize it but every major decision you make can be and is being influenced by firms tapping into data science to sell their services. Because of this, there should be no surprise that Big Data is used in the travel industry to convince you to go to certain locations around the world. And yes, we realize that that might surprise you but there’s a lot more involved in the process of picking a location than an impulse to travel. Here’s how it goes.

An Overview of The Travel Industry

The travel industry is the fastest growing industry in the world- no one can contest to that fact. Globally, digital travel sales were at a staggering $500 billion in 2015 and they are predicted to exceed $800 billion by 2020. Naturally, this makes the industry very competitive and you can see that. Everything involved with the travel and tourism industry is super competitive. Start from your plane tickets. You’ve got airlines offering luxury services and single seats worth $15,000 or more and then you’ve got budget airliners that can get you a seat for as low as $50. Then look at the hotels you stay at; there are resorts worth $1000 a night and then there are hostels worth $30 or less. You can travel to locations all around the world for less than $1000 for a five to ten-day trip.

When we see these deals, we genuinely think its amazing that prices are so low. Often, some of us even book a trip for the weekend or something just to make sure that we don’t miss out on this discount we’re getting. But don’t chalk out these prices as luck or chance, there’s more to the travel industry than you know.

How does a website know exactly which vacation advertisement to pull to catch your attention? How does a standard hotel or flight website know exactly what you’re looking for?
This is where Big Data comes in, and your experience is due to the use of data science in the travel industry.

How Data Is Collected for Analysis

You might not realize it but when you’re booking for your vacation, you’re actually leaving a massive trail of data on the internet. After all, everyone compares different websites, flights, hotels and more. You might even be checking that five-star hotel you’d love to stay at but can’t because you’re going on a trip with your family at $1600 per night is not very budget friendly. You’ll look at tourist spots, local markets, cuisines and so much more. It’s only natural that you would do at least some research about the place you’re going to because you’re going to want to experience the best that place has to offer.

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While this is something quite normal for you as a consumer, what you don’t realize is that this trail of digital information is sought after by major travel and tourism companies. The insights they provide can help form a package that you would be ideal for you. It’s not a bad thing. If anything, we know that personalization is key in the travel industry. Every traveller wants a personalized trip which they can enjoy. Tourism based companies turn to this data provided by you to create a personalized package that you will not be able to resist.

However, while this may sound easy, it’s really quite difficult. After all, the only way a travel agency, for example, can get all sorts of information about you is if they have complete access to your online activity, which they don’t. So how do they go about it?

What Happens to Collected Data

Well, what they do is they set up a data analytics division, or maybe hire a data analytics firm to look at the patterns of searches in a particular area. This is easier to access and there are a lot of websites that do sell or share information such as airline and hotel accommodation and things like that. While there is no individual information about one person available, data analytics firm use this information to sort and then begin analysis.

The result is that they manage to come up with a list of preferences and tastes of the people living in a particular area. You might have noticed things like “People also liked…” at the end of an online store or a hotel website. This is the result of data analysis by firms who’re looking to capture your interest.

What the data analytics team does is that, based on the probability, create a list of things that might catch your attention. This information is found by looking at a lot of data and then forming patterns. People who don’t mind spending a lot of money on airfare, because they want luxury and comfort, also don’t hesitate to spend a lot on hotels, rental cars and more. Therefore, when you choose a very expensive airline to get tickets from on a flight booking website, you might also get recommendations to more high-end hotels. If you’re looking at budget airlines, you’ll be offered more budget-friendly hotels.

How This Affects You

Your entire travel experience depends a lot on the first few things that you type on the search engine of Google. You just don’t realize it. As we consumers, all we see is the information given out to us instead of the back story that led to this information in the first place. Again, it’s a really good way of showing exactly how connected, how data-driven our world has become.
Following trends in your area, it can also be easy to predict the kind of places you might want to visit. Have you ever noticed that after a trip to a foreign country, you’re getting advertisements about that area or neighbouring countries? That’s because websites notice your geographical location. If you’ve been to a place for less than a month, it’s not hard to guess that you were there on vacation so the advertisements you see will be centred around going on vacation again because travel agencies want you to travel. They need you to travel to make money. That’s just how it is.

Conclusion

In the end, data science has a massive impact on the travel industry. What’s more interesting is that even after using data analysis on so many fronts, travel agencies are actually looking to increase their budget for data science even more. This means that you will be seeing a lot more personalized travel packages and honestly, that’s great. Everyone should be able to travel and make the most of what the travel industry has to offer.

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