Business Intelligence and decision making in the tourism industry
Decision making in the business world is the starting point towards growth and success or involution and failure. How can you minimise the chances of making a catastrophic decision for your business? The answer is very simple: having updated, real, quality and reliable information.
Without the necessary information, your decision making will be dangerously based on inklings, fantasies, emotions, feelings and hunches. Disaster is not far away!
Thus, having sound (and intelligibly presented) information for further analysis is the basis for deciding what steps will lead you to the right path.
There are travel technology providers that offer Business Intelligence (BI) functionalities in their Booking Engines. In the tourism industry, the information provided by the company’s own databases may be the most important source of information for the companies that intermediate in the distribution of tourism products: let’s see some of the most frequently asked questions formulated in the sector:
- How can I find out which destinations are the most sought after?
- How many searches does the user make before confirming the sale?
- How early are bookings generally made?
- What destinations and hotels generate more income for me?
- What type of product gives me more profit?
- How much have I sold from a supplier this year compared to last year?
- How many bookings vs cancellations have been made per hotel?
- Does any supplier penalise my sales for not responding properly?
- Which agencies generate the most sales?
Business Intelligence tools respond to this and many more mysteries. But… what exactly is Business Intelligence (BI)? You will find below three different, but complementary definitions:
Ability to transform data into information, and information into knowledge, in order to optimise the process of decision making in business.
This definition is very interesting since it clarifies the differentiation of concepts, like that of raw data base as primary material, its transformation into information at an early stage when presented in an intelligible way to become, finally, valuable business knowledge. The information per se is not significant and useful to analyse and make business decisions. It must be transformed into knowledge to acquire these properties. Business Intelligence flow would be as follows:
A second approach states that BI is the set of strategies and relevant aspects focused on the administration and creation of knowledge about the environment, through the analysis of existing data in an organisation or company.
The third definition presents Business Intelligence as a compendium of technologies and applications that allow you to collect information from the different sources of your company, store it, analyse it and provide it to all types of users of your company so that they can make the best business decisions.
BI technology offers the tourism-product distribution platforms the following functionalities:
- Comparing time periods, different products from different suppliers or customer sales behaviou All this information is visualised by means of different comparative data graphs.
- Transforming the raw data to display it in a friendly and intuitive interface, for their easy and comprehensive study.
- Deepening the details of your own data to discover trends and other information that help decide the courses of action to take, always based on real information.
- Creating customised reports and schedule their reception.
- Some even allow access to the module at any time, through mobile devices such as iPhone, iPad, Android and Blackberry.
Other forms of impact of Business Intelligence in the tourism sector
Business intelligence is used in multiple industries around the world. Like most industries, the travel industry will benefit from the implementation of big-data analysis solutions. Check here four application examples that show how BI can take the travel industry to the next level of profitability and efficiency.
BI can help travel agencies differentiate themselves
Put yourself in your customers’ position. Like most people, you probably do not care about the transportation company you use when booking your vacation. Most people do not see a travel agency as much more than a means to an end. However, the effective use of the Business Intelligence software in travel agencies and industry can help change the customer’s perception of travel. Transportation companies that use BI effectively gain a competitive advantage in the field because they improve the overall experience of their customers.
With BI, pricing strategies can be configured more precisely
Anyone who goes on holiday is willing to adjust prices when traveling. Traveling is expensive, so one of the objectives of travel agencies would be to propose their potential customers the best offers and rates. The only way to do this is to have real-time information about the state of the market at a given time. With Business Intelligence in the travel sector, it is possible to access dashboards that provide accurate information about flights, price variations in general and operational capacity for several travel destinations at any time of the year. By using this information, managers can better optimise their own prices to improve traffic and, at the same time, maintain an increasing profit margin.
BI allows a better asset management
Travel agencies and companies have many assets to manage, that should all be able to contribute to or detract from the final result. High performance and safety are two of the main objectives in this regard. The more secure the assets, the less likely to require maintenance and replacement, which can cost a lot of money. One of the advantages of BI is that it allows you to capture detailed information about operations and analytical data in all the processes within the industry. Asset management becomes infinitely easier when information is presented clearly and efficiently.
Possible challenges for BI in the travel industry
Although BI allows members of this sector to gain a better understanding of their customers and provide more effective decisions, there are also some challenges. So many data are recorded in this industry that many agents simply do not know what data they should analyse. Since data storage is an expensive process, knowing the right type of data to use in BI processes can also reduce costs.
In general, Business Intelligence solutions in the travel industry have a very positive impact. When implemented, these solutions allow an improved asset management, better decision making, greater customer loyalty and satisfaction, as well as the ability to differentiate your company from the rest. If you have not yet implemented BI in your business, it is time to do it. Work with Business Intelligence and see how your company takes off.