Data has become a driving force in almost every industry, and tourism is no exception. In today’s digital age, the tourism sector generates vast amounts of data from a variety of sources, including transactions, tourism offers and the tourism environment. This article explores the importance of data in the tourism industry, talks about data challenges and explains how data can unlock new opportunities for the travel industry.
The total amount of data generated every day is growing exponentially. By 2024, the amount of data created, captured, copied, and consumed globally will reach approximately 147 zettabytes, with an estimated 181 zettabytes by 2025, representing a growth of almost 25% in one year (Statista, 2021). Most people are familiar with megabytes and gigabytes, as a smartphone, for example, often comes with around 128 megabytes of storage. So what are zettabytes? One zettabyte is about 1 billion terabytes or 1 trillion gigabytes, which is a huge amount of data. This extremely large amount of data is also known as big data.
Is data the new oil?
Although many people say that data is the new oil, this is not entirely true. Admittedly, oil and data have similarities in that both resources are valuable only when refined and both products can be transformed. The two resources are different – we will run out of oil, but we will never run out of data, only storage capacity. Data as opposed to fuel has low distribution cost and is renewable. It can be reused and it does not lose its value.
How can data improve the travel industry?
Today, data is valuable and new insights and business models can be generated from data knowledge. Below potential use cases with data related to tourism are described.
Improve Destination Management
Data plays a vital role in destination management, enabling tourism boards to make informed decisions. By analysing data on visitor demographics, spending patterns and attractions, destinations can identify areas for improvement and develop targeted strategies. For example, data can help identify peak seasons, manage visitor flows and optimise resource allocation. With data-driven insights, destinations can improve sustainability efforts, preserve cultural heritage, and create memorable experiences for tourists.
Optimizing Revenue Management
Data analytics enables tourism businesses to optimise their revenue management strategies. By analysing historical booking data, market demand and competitor pricing, hotels and airlines can make data-driven decisions on pricing, promotions, and inventory management. This ensures maximum revenue generation and minimises the risk of overbooking. By using data, tourism companies can implement dynamic pricing models, offer personalised packages, and create effective marketing campaigns to attract more customers and increase profitability.
Understanding Customer Behaviour
Data enables the tourism industry to gain a deep understanding of customer behaviour. By analysing data collected from online bookings, social media, and customer feedback companies can identify travel trends, preferences, and popular destinations. With this knowledge, they can tailor their offerings to better meet customer needs. For example, data-driven insights can help hotels and tour operators develop personalised experiences that lead to higher customer satisfaction and loyalty.
Improving Customer Experience
Data-driven insights are critical to improving the overall travel experience. By leveraging data from multiple touchpoints, such as booking platforms, mobile apps and loyalty programmes, companies can understand customer preferences and pain points. With this knowledge, they can make personalised recommendations, optimise service delivery, and provide seamless customer support. From customised itineraries to real-time updates, data-driven technologies enhance convenience, safety, and satisfaction, ultimately creating memorable experiences for travellers.
What are the main data challenges in tourism?
One of the main challenges in the industry is that data is stored in silos, making it difficult to access and connect with other data sources. A major challenge in this regard is the need for a reliable and scalable data infrastructure as well as data role models from the industry. Other important aspects that cause difficulties are regulatory barriers and different standards used to collect and store data. Additionally, there is also a lack of knowledge about how to use and efficient handle data to generate insights.
That’s where Innosuisse’s flagship project “National Data Infrastructure for Tourism (NaDIT)” comes in. The main objective of NaDIT is to create a national inventory of tourism-related data, to visualise what data is available and to raise awareness of the importance of this data.
As mentiones data has emerged as a powerful asset in the tourism landscape. By harnessing the potential of data analytics, the tourism industry can unlock valuable insights that drive innovation, improve decision-making, and optimise operations. Adopting data-driven strategies enables businesses to remain competitive, deliver better customer experiences and pave the way for a sustainable and thriving tourism industry.
Sources
IDC, & Statista. (June 7, 2021). Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2020, with forecasts from 2021 to 2025 (in zettabytes) [Graph]. In Statista. Retrieved May 31, 2023, from https://www.statista.com/statistics/871513/worldwide-data-created/