• September 19, 2016

I Know What You Did This Summer: How Big Data Shaped Your Vacation

Travel companies use data to give you better deals.

The dog days of summer are quickly coming to an end. Unfortunately, that probably means that your summer vacation is already starting to feel like a distant memory. No matter how you spent your vacation this summer, have you ever stopped to appreciate the role that Big Data and analytics played in making it possible?

The fact is that in the digital age, billions of new data points are collected every day as people book flights, select hotels, rent cars, and complete the myriad other transactions necessary to plan their vacations. Not surprisingly, travel companies are increasingly using that data to give you better deals and more personalized customer experiences. They want your business and, considering it’s a $7.2 trillion industry globally, it’s not hard to guess why.

Let’s take a closer look at how some travel companies are doing it.

When Finding the Best Prices Is Up in the Air

Chances are that you book your flights using Google Flights, Kayak.com, or one of the many other flight-booking engines. After all, it’s easy, convenient, and the best way to get a good deal. But did you know what actually happens every time that you use one of these services? They take data from your purchasing history, frequent flier programs, and other sources to create customized deals for you based on your situation at that exact moment in time. And it all happens in a matter of seconds.

Engines like these do this by crunching the data they’ve collected about you and comparing it to the huge amounts of historical data they have about other people just like you. For example, that might include everything from how much you’ve paid for tickets in the past, to how long you typically spend researching flights, to even what your seating preferences are. The engines then look to see what other people like you are spending for the flight you’re considering to determine the optimal price point for you.

The result is that you get tickets offered to you at a price that’s generally going to work for you, thereby increasing the chances that you’ll actually make a purchase. The airlines may have to sacrifice a few dollars on individual ticket prices in the process, but if it means that they can fill up their flights, they’re happy to do so. Hotel-booking, car-booking, and other similar services all function in a similar way.

How’d You Know I Always Wanted to Go to Tahiti?

Beyond just pricing, Big Data and analytics are also being used to help create hyper-personalized marketing campaigns, filling your browsers and inboxes with highly targeted ads for vacation deals designed to get your attention.

The beauty of this is that by collecting and analyzing data about your personal travel preferences, over time travel companies are able to understand exactly what kinds of vacations you’re most interested in. They can then make you aware when new deals arise for those specific trips by placing ads in your Facebook feed or sending you customized emails. It’s a win-win because you don’t get bogged down with a lot of noise about vacations you’re not interested in, and the travel companies dramatically increase their chances of actually selling a trip to you.

From Paris With Love

As you think back longingly on your last vacation, take a moment to appreciate how much easier and better those vacations are becoming thanks to the power of Big Data and analytics. It may not be much consolation while you’re slaving away at your desk, but it sure will come in handy when you start planning your next big trip.

Like this story? Read about how data is transforming the legal industry or how to realize better business outcomes with analytics.