Make this change to survive in the travel industry
In an industry as competitive as ours, there’s no shortage of bankruptcies. Survival is hard, one day you can be leading the pack and the next you may be closing your doors. It might seem like a mystery as to why some make it and others don't, but rest assured it is no mystery.
In 2002 Hong Kong based OTA Zuji was one of the pioneers of online travel in Asia. In many ways they established much of the foundation we now take for granted in the online travel space. But where they were quick to get into the online market, they were slow, and ultimately unable, to adapt to the rapid changes that followed, such as the increased expectations for personalized experiences and travel packages.
In 2019 Zuji went bust. There are two reasons for this: aggressive competition from companies like Expedia, and the less obvious but far more impactful inability to keep up with their audience’s demands. Why? Lack of data.
Given their resources, Zuji should have been able to maintain a market share large enough to operate profitably. However, they forfeited their ability to compete long before any threat was apparent. By not implementing tools to gather and analyze data, they were uninformed and therefore unable to make the right choices to serve their customers and adapt to increased competition from larger OTAs.
It comes down to information, without it you can't survive
Now this isn’t meant to single out Zuji, but only to illustrate a point. They are not alone in this misstep, most OTAs operate without considering the impact that business intelligence (BI) could have on their short term profitability and long term survival. Without data you’re just guessing, making changes that may or may not make a positive difference, or in some cases cost you money. Given how highly competitive this industry is, it’s not something you can afford to take lightly. For many OTAs a bad month can quickly spiral into a bad quarter, year, and then closure.
It’s not just OTAs, it’s everyone in the hotel distribution space. In complete fairness to them, it’s not for lack of trying. Developing internal BI solutions can be extremely costly, and the external options for travel agencies are limited. The sad reality is that hotel distribution in all aspects has yet to become data-driven, lagging behind other sectors of the industry.
So what do we know?
It took us just under 7.5 years to get enough data to make the switch to a company whose decisions are primarily data driven. Analyzing dozens of interconnected variables gives us unique insights that enable us to thrive and grow as market leaders. And this is only the beginning. With every passing day, we gather more data and improve the accuracy of our predictions, thereby securing a more stable and profitable future while incurring fewer risks.That’s what it boils down to, risk reduction, and the capacity to lead the industry by understanding complex patterns of customer behavior.
Take action and position yourself as a market leader
It’s time to start laying down the groundwork. As individual businesses and collectively as an industry we must utilize BI tools, and begin gathering information. From website data such as average session length to supplier performance and property analytics, we need to collect and then examine our internal data. For example, comparing the booking numbers of various hotels allows you to determine what customers care about and deliver on those factors to improve sales. This is the only safe way forward in the face of ever increasing competition.
Take these steps and you’ll move away from the financial uncertainty that is so prevalent in the industry. This is information that is readily available to you, it simply needs to be gathered and analyzed. Once that is done you can seize this powerful information to create the opportunities that will switch your travel business from ‘playing catch up’ to being a trendsetter.