The travel industry is one of the largest and most dynamic industries in the world, with billions of dollars in revenue generated each year. In recent years, the industry has seen a shift towards the use of alternative data to better understand and predict consumer behavior. This article will explore the concept of alternative data and how it is being used in the travel industry.
What is Alternative Data?
Alternative data refers to any data that is not traditionally used in financial analysis. This can include things like social media activity, satellite imagery, and weather data. In the travel industry, alternative data is being used to gain insights into consumer behavior, such as travel patterns, preferences, and purchase behavior.
Benefits of Alternative Data in Travel
The use of alternative data in the travel industry has several benefits. Firstly, it can provide a more comprehensive view of consumer behavior. Traditional data sources, such as sales data, only provide a limited view of consumer behavior. Alternative data can provide a more complete picture of consumer preferences and behavior.
Secondly, alternative data can be used to predict future trends and patterns. By analyzing social media activity and other alternative data sources, travel companies can identify emerging trends and adjust their strategies accordingly.
Finally, alternative data can be used to identify potential risks and opportunities. For example, by analyzing weather data, travel companies can identify potential disruptions to travel plans and take steps to mitigate these risks.
Potential Providers of Alternative Data
There are several potential providers of alternative data for the travel industry. Two examples are Earnest Research and Global Tone Communication (GTCOM).
Earnest Research
Earnest Research provides credit and debit bill pay data from millions of anonymous US consumers. This data can be used to gain insights into consumer behavior, such as travel patterns and purchase behavior. Earnest Research also provides data on consumer sentiment, which can be used to predict future trends in the travel industry.
Global Tone Communication (GTCOM)
Global Tone Communication (GTCOM) provides news sentiment and event tracking across 65 languages. This data can be used to gain insights into global travel trends and emerging travel destinations. GTCOM’s data can also be used to identify potential risks and opportunities in the travel industry.
Challenges of Using Alternative Data in Travel
While the use of data in the travel industry has many benefits, there are also several challenges to consider. Firstly, alternative data can be expensive and difficult to obtain. Companies may need to invest in specialised tools and resources to effectively analyze alternative data sources.
Secondly, alternative data can be difficult to interpret. Unlike traditional data sources, alternative data can be unstructured and require advanced analytical techniques to make sense of it.
Finally, there are potential privacy concerns associated with the use of alternative data. Travel companies must ensure that they are using data ethically and in compliance with relevant regulations.
Conclusion
The use of alternative data in the travel industry is becoming increasingly important. By providing a more complete view of consumer behavior, alternative data can help travel companies stay competitive and agile in a rapidly changing industry. However, companies must also be aware of the challenges associated with alternative data and invest in the necessary resources to effectively analyze and interpret this data.