NB: This is a guest article by Larry Smith, a partner at US-based Thematix.
Big Data has blossomed into a big topic among many in the Travel industry because it is, well, BIG.
Lest we forget, data flows in and around, to and fro, among and between every facet of the industry every day.
What’s more, its growth is being stoked by the social graph where travelers are reporting, rating and app-ifying their travel experience into a real time broadcast.
There is no doubt Big Data will be a defining currency and competitive advantage to those who can harness the resource and extract its value.
The TnoozLIVE Episode 2, of which I was a panelist, got to a lively Big Data discussion with responses to the question:
"Which organizations are best positioned to bring big data techniques to the travel industry?”
The following answers were available:
- 17% - GDS
- 35% - Search companies (like Google)
- 13% - Social networks
- 25% - Intermediaries & Suppliers
- 10% - People not from these parts
Though we panelists were not invited to vote, all of us voiced big opinions after the results were posted. I took the underdog 10% position that "People not from these parts" would be the drivers and best positioned to deliver the value.
"People not from these parts" (PNFTP) think travel is sexy and glamorous – and it is!
They know it’s a huge global market with many dynamics that fit their algorithms. Even better they can be funded by investors who know big data will be a big deal, and a deal with many exit strategies from companies inside or outside the industry.
PNFTP have unique skills and a perspective not tainted by the realities of delivering the essential components of a journey. PNFTP don’t know or care about what happens in the moment, right now, in the air, car, train, hotel, or attraction.
But because they do want access, real time to these proprietary data, this is a potentially huge revenue stream to almost every travel provider willing to set up a data feed.
PNFTP also don’t want to worry about data quality (governance and provenance), so paying for a feed will make them the most likely group to attract the attention of the industry. Their servers can generate revenue without doing much human intervention work, and do this across many industries.
PNFTP have the expertise, funding, and appeal to the industry. So what about everyone else?
Search companies, the top 35% choice, are obvious because they already manage big data and have travel initiatives via acquired travel companies including ITA by Google and Farecast by Microsoft/Bing.
However, both have focused on advertising revenue related initiatives, and it’s most likely they’ll continue to apply big data resources to making advertising more appealing; in other words, their contribution will be at a price.
Intermediaries and suppliers are a broad group with various levels of expertise, capital, and knowledge resources. There is no doubt some will offer "point solutions" or extensions to their current business offering through some big data initiatives.
These targeted contributions will add big data benefits to certain sectors and illuminate new opportunities and solutions.
In third place at 17%, the GDSs clearly have the knowledge and expertise from decades of working with big inventory and price data.
The unfortunate reality is their IT environment has not been conducive to making the big transformation to the current big data requirements.
Should any GDS decide to allocate an outsized amount of their capital investment to these new initiatives they would certainly take a leadership position, but it’s a long and uphill journey.
Social networks at 13% are also positioned to apply their expertise in managing big data, but it would be a strategic stretch to think they would target the travel industry.
Surely their membership do travel and post extensively, but crunching the data to the benefit of the industry would not be a near term reward. What’s more social data is very messy and highly unstructured.
So back to PNFTP, who may be legion. There are no substantial barriers to entry for outsiders because at this stage the type of expertise and knowledge required has more to do with math than travel.
The issue is not their entry but their direction, and how they fit and contribute to the travel ecosystem
The OpenTravel Alliance and my firm, Thematix, do not oppose this intrusion but want to guide it into a place where all of us can use it to our own particular advantage by agreeing upon standards and eventually an ontology of common terms and classes.
Big Data will offer Big Benefits to all, regardless of who it comes from, when it fits the form and format that we need and can apply to our business.
NB: This is a guest article by Larry Smith, a partner at US-based Thematix.
NB2: Eyes through hole image via Shutterstock.