The Big Data Revolution in Tourism

What real and tangible advantages does Big Data brings for tourism? What are the business opportunities offered by this technology?

As a first consequence, digital transformation and technological advances can radically change the way people consume and get informed. A digital scenario that brings with it new forms of business management. To ensure their survival, all businesses are being forced to adapt to the online environment.

Tourism sector is not an exception. The data analysis benefits tourism in all its areas, exploiting its possibilities and presenting new business opportunities.

The implementation of Big Data in tourism means having real-time information about users, their movements and their preferences.

Information about the movement of individual travelers, their buying preferences, their aspirations... these data, if correctly treated, represents a huge advantage for companies in the tourism sector which now have the opportunity to define and optimize their strategies to increase their sales.

The online activity of tourists provides macro data that delivers a better picture of their behavior. Because of that, studies based on surveys or interviews with experts, lacking the necessary objectivity to get conclusive answers on the real situation of tourism now belong in the past. In particular, this technology allows to gather some parameters which make possible to improve the services, the decision making process and the management of tourism businesses.

Parameters such as the number of visitors, as well as where they come from; the average time people stay according to their nationalities; what are the most common trips in the cities; places preferred by tourists to spend the night; or average expenditure.

What Does Big Data Contribute to Tourism?

Compared to traditional methods, data analytics provides six important advantages.

Reliability

The data extracted with the Big Data application are based on actual consumer actions and not on data obtained from surveys, predictions or projections. Therefore, the results obtained are objective, not valuations subjected to different interpretations.

Representation

The more sources of data collection, the better the sample representation is. A sampling frame based on data accurately gathered which increases considerably compared to that extracted from conventional research studies.

Information detail and segmentation capacity

By handling the contrasted data, the information obtained is easily readable and can be converted into more accurate and effective actions which allows optimizing the results of tourism management by knowing in detail what the customer wants.

Thanks to Big Data, companies know the actual volume of customers, their habits and their preferences and, based on it, they can predict, for example, the price that best suits each customer and improve their experience.

Hybridization of data with other current or future sources

Both current or future data can be combined with other sources of information such as the social media data or public data. Merging the obtained data with other variables leads to new conclusions.

For example, the possibility of having not only an attendance record but an attendance record sorted by time, place of origin and average expenditure.

New flows of information

Big Data emerges as a new source of data extraction through technologies that the tourist provides himself (such as card payment or the connection of his mobile device).

In addition, the rise of portable technology and the boom of smartphone apps allows to rate and share opinions so the chances of obtaining a much larger sampling frame increases significantly.

Chances of new business opportunities

Companies can compare their internal data with the results obtained by applying the Big Data, this allows to determine if the offers are adjusting to the tourists' demands and to have the necessary information to redefine them in case they're not adjusting. This way, the opportunity to innovate, generate new lines of business and to customize the experience of tourists emerges.

Challenges to Solve

The combination of traditional architectures with Big Data management architectures. The gap between the amount of professionals with Big Data knowledge and the large amount of companies dedicated to the tourism sector.

Set the data privacy level of the client, as well as the responsible use of the data to ensure the client to benefit without violating their privacy

Through Big Data, tourism companies will develop a serious, costly, ambitious and highly technological customer understanding work. The large volumes of data will allow the implementation of highly useful predictive models to improve the efficiency of customer service and the products we all demand.

In this way, distribution channels will gradually move into the hands of purely technological companies, these are the only companies capable of facing huge investments in the development of Big Data analytics.

Chinese Tourism: Travel Tech to Shape the Sector

The rapid development of modern technology introduces smartness and convenience to all aspects of our modern life and environment, including the efficient operations of private businesses, government/non-government organizations alike.

With travel technologies being maximized and embedded in planned developmental goals of the Chinese government to grow and revolutionize Chinese tourism industry, the standard of living and quality of life and services is bound to improve.

The total revenue of the travel and tourism industry in China is currently estimated to be valued at a whopping 3 trillion Yuan. As the sector continues to flourish the country is strategically positioned to become the world’s second largest tourism economy after the United States of America.

The China National Tourism Administration released a five year roadmap of Chinese tourism.

The initiative intends to equip all 4A and 5A rated scenic spots with online booking service, electronic tour guides, and free Wi-Fi to all tourists by the year 2020.

Through the use and proper application of information and digital travel technologies, popular tourist destinations in China will be able to address traveler’s needs, provide better services with real time information, and enhance the overall experience of thrill seekers and visitors.

Hot spots and cities through ICT will become accessible and enjoyable for tourists and residents alike.

Technology will be used as an innovative tool to boost interconnectivity of transport, leisure and entertainment services using data collation and coordination.

Despite the unavailability of sufficient information about tourist services online, itineraries online, the Chinese tourism industry is expected to entertain 6.7 billion visits by 2020 according to Xue Yaping, the spokesperson of the association. Hence the need for quick innovation and improvement to the internet side of things in this core sector of the economy.

The aim is to create a seamless and personalized experience for tourists from the beginning to the end of their stay. This will also encourage small and big tourism service providers like tour operators, sightseeing service providers, and hotels that have been reluctant to establish a digital foot print or online presence for their business to explore those options to their benefit.

The advent of travel technologies has generated a series of new patterns in the dynamics of production and consumption of tourism, therefore increasing competition existing in the sector, prompting the need for service providers to diversify the way they promote their offers using this tool.

This plan will set in motion a realistic target of increasing tourism expenditure by at least 20 percent by 2020.

Tourism Tech Changed the Way We Travel

Technology and, more specifically, Internet, are changing the way tourism is organized and commercialized. On the one hand, users do not travel the same way they did a few years ago because they now have many more possibilities. And, on the other, the companies of the sector and even the tourist destinations themselves are immersed in full digital adaptation.

User’s digitalization has managed to implement the transformation of a business model. Tourism technology is now essential for any travel company.

The customer is much more demanding and has a more experienced and digital profile. The target is changing and the tourist has gone from being a passive subject that needs a service to a key piece immensely involved in the process.

Collaborative economy, travel apps, virtual tour guides... Tourism is implementing a great quantity of apps.

How are the travelers themselves taking advantage of these possibilities? Are companies in the sector facing this challenge well? What is the strategy of new initiatives born on the Internet? And finally, how are future prospects in the field of tourism presented?

Tourism Technology - The Most Drastic Changes

There is no doubt that the tourism sector has taken a 180 degrees turn in recent years. Gone are the analogous processes loaded with intermediaries. What have been the most significant changes?

One of the great advantages of the Internet is the reduction of costs. With fewer intermediaries, processes are streamlined and companies can save time and expense, which translates into cheaper deals for the tourist.

In fact, low cost tourism is one of the most powerful trends and business focused especially on millennial generation.

Generally, millennial's profile is that of a young man with limited resources but with extensive knowledge on ICTs and the Internet, forcing companies to offer new options and more competitive prices.

The user wants to be listened to and the companies in the sector can get a lot of feedback from the customer by using tourism technology.

Without going any further, they can learn firsthand the needs of users and use this information to improve their services.

But not only is the internal opinion of the tourists relevant, but also externally. Hotels, transportation companies or price comparators care a lot about what their customers say about them on the Internet, whether in forums, in the comments section of their own websites or in social networks.

On the Internet, geographical barriers disappear. This allows tourism companies to enter foreign markets and reach more customers. Opportunities, therefore, multiply in an increasingly globalized and interconnected world.

Another great advantage is the possibility of forging alliances with other international companies. Strength lies in unity and in a sector as competitive and changing as tourism, being strong is fundamental.

The Era of the Collaborative Economy

The new members of the tourism sector are collaborative management businesses using tourism technology – whether they are related to transportation (such as users sharing their car for trips), accommodation (private accommodation in marketplaces such as Airbnb) or shopping (buying or renting tourist items on digital platforms such as Wallapop).

There is a big discussion surrounding this new business model. On the one hand, it has revitalized the sector by increasing tourist influx but, on the other hand, it can be a threat for the traditional companies. Time will eventually respond to this controversy.

The advance of tourism technology makes companies experience major changes in a limited time. What is obvious is that user’s needs are changing and companies must continue to adapt to them. Tourists are more active, social and digital, and only innovative ideas that fit their needs will survive.