IN-DEPTH: Travel companies can be proactive by having systems in place to consistently watch out for competitiveness and make use of advanced business intelligence tools that are capable of feeding rates into RMS or provide the ability to fire reports on demand, says Vishal Jain, Head, Product Management, RateGain.
By Ritesh Gupta
Retail travel businesses are increasingly looking at incorporating data mined from the web in order to optimise pricing decisions.
The web-based price intelligence tools facilitate real-time monitoring of product rates for businesses like online travel agents, tour operators, wholesalers, airlines, cruise lines and car rentals across various competitor websites.
With the ever decreasing brand loyalty in the online world and where rates are constantly changing, travel companies need to be consistently updated about their competition’s future pricing strategies.
“Travel companies (whether suppliers or intermediaries) by and large fall under oligopolistic competition category or monopolistic competitiveness and under both it is important to know what the rest of the market is up to. The pricing is hardly relevant if you choose a cost based or ROI based pricing model. Pricing has to be referenced and benchmarked against the competition and that is where a BI tool providing most updated transient rates/fares can help you fine tune your pricing and rate structure,” says Vishal Jain, Head, Product Management, RateGain told EyeforTravel’s Ritesh Gupta in an interview.
Jain, who is scheduled to speak at the forthcoming Product Development Strategies For The Travel Industry Conference in London (November 3-4) this year, spoke about competitive price intelligence, the maturity level of data-as-a-service in the travel sector and lot more. Excerpts:
The number of options available for travel planning and booking, and also the number of screens/ gadgets to access content continue to rise. The online travel sector, especially both OTAs and travel meta-search engines, continues to witness newer challenges. In this context, how do you see the need to remain competitive for businesses in the online travel sector? How are various stakeholders trying to be proactive?
Back to basics, there are two things to be addressed here, staying competitive in terms of price, value as well as contractual obligations. Travel companies (whether suppliers or intermediaries) by and large fall under oligopolistic competition category or monopolistic competitiveness and under both it is important to know what the rest of the market is up to. The pricing is hardly relevant if you choose a cost based or ROI based pricing model. Pricing has to be referenced and benchmarked against the competition and that is where a BI tool providing most updated transient rates/fares can help you fine tune your pricing and rate structure.
To create differentiation audit of your own BRG and staying competitive in eyes of your consumers or online partners like OTAs, it is imperative to check if your rates are being distributed in the desired manner. For the OTA, it is important to stay credit worthy in terms of offering the most competitive rates combined with easy UX and excellent customer support team.
You can be proactive by having systems in place to consistently watch out for competitiveness and make use of advanced BI tools that are capable of feeding rates into RMS or provide the ability to fire reports on demand.
Some of the companies have integrated the whole workflow into a seamless way of ensuring the right data extraction from multiple sources, correct mapping rules for apple to apple comparison of the data, applying business rules to finally driving actionables as job/ticket assignments to various stakeholders (like Market Managers) within the company. This form of end to end automation and logical workflow helps them drive the right ROI from their BI initiatives.
The industry has witnessed the emergence of web-based services that make it easy to acquire, organise, manage, and analyse large volumes of complex, interrelated data. How do you assess the maturity level of data-as-a-service in the travel sector?
The maturity of the data from the technical point of view is only as good as the technology that is involved in culling it out for you. It is important for you to know that the data they are referring to is fresh and not aged; it has to be consistent and accurate from source and unit level point of view (not just the cheapest). Such data sets when culled, can be organised in easy to analyse formats that can be further used by revenue and pricing professionals to analyse at the granular level (apple to apple) and arrive at the most relevant pricing decisions. This effectiveness reflects the maturity offered by the data vendor.
Although data extraction for business decision making has matured in the sense that a lot of the suppliers and intermediaries get this internally or externally. But from a perspective of being able to use that data to its fullest and take action on it is something that is limited to very few companies. Resources, both in terms of numbers and skills, are something that becomes a bottle neck in most cases. This presents an opportunity for data providers today to move up the value chain and actually provide not just data but professional services that help with the right and full consumption of that data for their customers.
What do you recommend to travel businesses in order to become nimble and make the most by measuring their competitiveness? What sort of benchmarks can they set to assess their competitiveness/ or be proactive?
There are two issues:
1) a soft approach in terms of using the right reports, data vendors and frequency and
2) the hard approach of training your team to check the sites competitiveness on an ongoing basis. Speaking to suppliers or member hotels (in case of Hotel Chains) who breach the contractual agreements from a consultative point of view is an important aspect and will benefit the industry a lot.
The need is to educate the industry people to understand the criticality of contractual agreements and how it can positively or negatively impact not just the future reservations/bookings but also their brand integrity in the longer run.
OTAs should show flexibility in providing a choice or pricing options to match the rate merchandising capability of a booking engine in terms of restrictions, dynamic packaging and promotional derivatives of standard rates/fares. For example, majority of the OTAs loose out when they are not supporting the FPLOS (full pattern length of stay) pricing strategy of a growing number of Hotel Brands, they start appearing more expensive than the brand sites and unwittingly contribute to the “billboard effect” more than they should.
Corporations are capitalising on the techniques of business analytics to achieve new breakthroughs in process performance. Which according to have been critical breakthroughs in data mining over the past few months? How do you assess the maturity level of these offerings as of today?
The capability of data mining on a consistent basis is worth mentioning. The ability to hedge around the risk of IPs being blocked or rates getting reflected as an image / Captcha reader, which your data provider cannot read are important breakthroughs. Also to add the ability to present the data in terms of calculating tax and charges incl. or excl, good product/rate mapping (with advances in NLP technology this has significantly improved matches) is important for a true apple to apple comparison. Additionally, the data representation tech on the web is also evolving and this presents an on-going challenge to the data mining business.
Lots of CRM and Enterprise solutions (CRS/PMS/RMS) are exposing their APIs for 3rd party systems, it has led to ease of automating the BI driven action items. However a lot of this is secondary. The primary focus is to have audits and checks in place to even know if you are facing the issues mentioned earlier.
As a specialist in this arena, can you elaborate on what factors should one take into consideration when it comes to data aggregation and implementation strategy?
It is important to maintain consistency in terms of access to fresh and consistent data, ability to customise, to present insights by using the data mash ups, to co-relate two separate kinds of data e.g. competitive fare to own yield, customer satisfaction to ADR, and more.
Implementation to the desired level of format and data presentation is important as it will ease out the consumption process at the RM’s desk.
What do you think is critical when it comes to relying on data management for new product launches?
Measure, Measure and Measure ….the age, the accuracy, the source, the conversion, the entire data scope of what was shopped and presented.
Only when you have audited that something works correctly, you can rely on it for something as important as your pricing decisions for new products.
Consumer interactions are taking across new web platforms such ones related to social media and also mobile platforms. As both suppliers and intermediaries are vying aggressively for the online customer, can you reflect upon what is being done by the BI solution providers to monitor and measure brand perception and respond on a real-time basis?
The BI around reviews and guest commentary is also provided on similar data extraction principles as rates are extracted. However, we must consider that consumer interactions are happening all over the place and not necessarily in a structured display format for any vendor to extract. The tools available out there are of all sorts. One must try and work with partners offering a sound sentiment engine behind the tool so that the first round of analysis of all consumer commentary can be done and categorised for the business user in an easy to relate format. These tools should have high precision in terms of retrieving relevant data so that the aggregate is a qualified one and not just a sentiment from select sites or sources.
The commentary is the voice of the customer, it is important to use this to hear the guest feedback and make necessary changes in service and product standards. If done well you can even tie it to the value proposition and charge a premium and hence get a breather from the never ending pricing battle with the competition.
There is a growing demand from industry players to integrate business intelligence with their existing or new revenue management systems. These companies are looking for an integrated solution through which they can control their pricing as well as execute an analytics based competitive pricing strategy. How is this arena shaping up?
Previously RMS would just look at your own historical data but the scenario has changed now. Now by taking feed from price intelligence tools they are able to calculate more accurate hurdle rates. This area has a lot of opportunities as the consistency of data gets defined better and the data consumption becomes more structured. It is however important to know that the RMS and data feed provider are tightly integrated and can identify the data feed in the right manner. In hospitality industry, specially the smaller hotels that do not use RMS’s still are continuously looking for data feeds in their CRS or channel management solutions.
There is a need though for RMS players to start thinking beyond rate BI and move towards evolving their models to take into consideration BI data around self as well as competitive customer satisfaction, online reputation, social recommendations (tied to consumer influence index) and its impact on rate recommendations that they churn out.
|Product Development Strategies For The Travel Industry Conference
Vishal Jain, Head, Product Management, RateGain is scheduled to speak at the forthcoming Product Development Strategies For The Travel Industry Conference in London (November 3-4) this year.
One of the most popular OTA companies in Australia was looking for one single partner for pricing intelligence data for revenue management for its hotels and air tickets divisions that are spread across many countries. The objective was to be able to standardize the practices around consumption of comparative pricing data across the whole company irrespective of the geography of the branch offices/websites as is spread in different countries.
RateGain customized its price intelligence solutions for the client and clubbed the hotel rate intelligence data with the air fare data. In tune with requirements from their global offices, the reports were customized with the local information on hotels and airlines pricing. To offer actionable insights, high level customized dashboards have been designed for their senior management.
- Hotel contracting teams in US, Canada, UK, Australia and New Zealand receive on demand and scheduled rate intelligence reports and use it to ensure best rates for their clients.
- Civil Aviation Safety Authority (CASA) has defined parameters on how OTAs & airline companies can sell their products to ensure customers get the actual rates instead of cheapest rates with extra hidden costs. The technology behind the rate intelligence is custom designed to track rates through multiple frames by clicking on the booking button to get the details on the best rates. In ‘not-available’ cases it goes back and searches again until it gets all the details of the rates being offered.
- Presently, price intelligence data for air tickets are being shared with Australia and New Zealand offices.
- The company gets accurate data on cheapest air tickets offered by its competitors.
- Specially designed tracking technology by-passes the manipulating practices by its competitors and only brings back the actual rates instead of the ‘claimed cheapest rates’ that have additional hidden charges.
- The company is able to comply with CASA norms and is offering the best hotel and airline rates to its customers worldwide.
To download this case study, please visit: http://www.rategain.com/Trends-&-insights.html
The need to remain competitive for businesses in the online travel sector is paramount as the market perception of travel products has been commoditized. With so many travel sites offering similar services and products, consumers have a much more comprehensive and transparent availability of information to make a thoughtful purchasing decision.
“The importance of measuring your competitiveness thus becomes of paramount importance to sustain and grow your market share in the markets you serve,” says Bhanu Chopra, CEO of travel technology company RateGain.
The six-year old company has been expanding its offerings. RateGain offers its solutions under its market intelligence, channel distribution and social network marketing suite of products for the travel and hospitality sector.
“Our business has evolved from being a competitive intelligence provider to more of a market intelligence and distribution solutions provider to the online travel industry. Our initial solutions were around competitive intelligence but we have invested in providing innovative solutions in measuring and monitoring the impact of social media and reviews,”
Bhanu spoke about the need for business intelligence solutions, the maturity level of such solutions, his company’s new referral marketing platform and related issues. Excerpts:
Can you elaborate on how has the need for business intelligence solutions evolved in the online travel industry for various players?
The area of business intelligence is quite vast and it can apply to the online travel industry in multiple ways. Within the context of BI tools that RateGain offers today, it is clear that in the competitive online travel world, both suppliers and intermediaries are vying aggressively for that online customer. In any business and much more in online travel business the need to be competitive is paramount as the market perception of travel products has been commoditized. With so many travel sites offering similar services and products, consumers have a much more comprehensive and transparent availability of information to make a thoughtful purchasing decision. The importance of measuring your competitiveness thus becomes of paramount importance to sustain and grow your market share in the markets you serve.
There is growing complexity now with how customers find and book travel today. Some new emerging trends are around rapid adoption of mobile to look and book travel, use of trip planning sites, hotel reviews becoming of vital importance on how consumers book travel(about 85% use reviews to book accommodation based on recent studies).
In addition Facebook and Twitter are becoming extremely important for businesses to monitor and measure brand perception and respond on a real-time basis to potentially adverse comments on these powerful platforms. It is important to monitor and measure the effectiveness of your online marketing campaigns and see if the new online mediums provide a ROI.
How has your company focused on differentiating its offerings in the last couple of years?
We have tried to approach business intelligence in a holistic way to assist companies measure the impact of their overall online strategy. Our business has evolved from being a competitive intelligence provider to more of a market intelligence and distribution solutions provider to the online travel industry. Our initial solutions were around competitive intelligence but we have invested in providing innovative solutions in measuring and monitoring the impact of social media and reviews.
Our recent product launch Rumbido, has found a lot of excitement in the marketplace on how to actually monetize the power of social networks. In a nutshell, I think our agility and ability to listen to market needs has enabled us to continuously innovate and unveil new solutions to help address the changing market needs.
In addition we have solidified our customer relationships with high level of customization, customer focus and a consultative approach instead of a service approach. All these are complimented with a round-the-clock post sales support with a quick turnaround service delivery.
How do you assess the maturity level of BI solutions as far as the travel industry is concerned? What new trends have you witnessed in this arena?
My rating would be medium to low-high i.e. B+ to A-. Even after 6 years and having some of the top travel companies as our clients, we still feel the industry as such hasn’t matured. Although in the recent times some of the mid-market players have shown interest, however the demand or rather requirement of business intelligence solutions is much more apt for bigger players in the industry.
Some of the noticeable trends that we have witnessed in our interaction with industry players and insiders are:
- There is a growing demand from industry players to integrate business intelligence with their existing or new revenue management systems. These companies are looking for an integrated solution through which they can control their pricing as well as execute an analytics based competitive pricing strategy. This is certainly seen as the next phase where suite of business intelligence solutions in travel industry can take the next leap and transform as an integrated solution as per the changing market demand.
- Need to monitor social media networks and its effectiveness
- Importance of monitoring and responding to reviews in the decision making process of consumers.
The industry has witnessed the emergence of a new referral marketing platform that intends to reach out to friends, families and followers of existing customers on different social networks. How do you expect your solution to fare in the next year or so?
Social media offers a huge bill board effect which we can’t be over-looked. There are numerous research studies available that prove this point that the probability of buying any product increases if it is being referred by a close friend, relative or peer. Increased popularity of consumer review sites and the way people contribute and trust on the reviews posted there, authenticate this claim that the next phase of social media marketing will be majorly dependent on referrals and peer recommendation. Another interesting aspect here is that until now social networks were mainly used to create a buzz and a wider brand visibility. This new angle is capable of actually converting the buzz and brand awareness to new customer acquisition.
As more and more social network sites are integrating review sections in their offerings, we see a bright future for the adoption of this kind of a solution not only by the companies but also the consumers. And to keep consumers motivated who are actually acting as brand ambassadors, we added a commission angle for all successful referrals.
We expect hotel chains, mid & large online travel agents as well as marketing and advertising agencies catering to travel industry as the major adopters of this new social network referral marketing platform.
What factors did you take into consideration before launching this solution?
Social media is one of the most popular buzzwords these days. Every single travel and hospitality company is on these platforms and ensuring their presence is felt. However, when we interacted with some of these companies we found that unanimously they all felt the need of a solution that can take the existing social media marketing campaigns from just a mere buzz generating vehicle to a lead generation platform.
Converting buzz to sales or say monetizing social media is the need of the hour. Taking this insight as the core solution, we designed rumbido, our proprietary social media referral marketing solution. In fact, we even have a patent pending for rumbido. It engages and rewards your customers to promote your offering within their social networks, thereby creating buzz for your brand, traffic and sales for your business.
With rumbido, hotels, OTAs, airlines and travel companies can go beyond branding on networking sites and build a powerful online referral program. It helps them to acquire new customers and convert them into brand ambassadors and their networks into a new, cost effective channel of distribution.
A hotelier told me: the referral is only going to influence business for selective hotels who have a strong product and consumer focus. Also the key will be the level of electronic engagement from the hotel with the consumer. Again the channel mix is a key driver here. Also the luxury segment may gain more than the budget segment as a consumer always want to showcase about the prestige associated with the same in social networks. What’s your viewpoint regarding the same?
Well, it all depends on the category of company. Be it a luxury brand or a budget brand, their customers have their own personal preferences. E.g. A luxury brand customer would be encouraged to share his world class experiences with his peer group to advertise the fact that he/she had stayed in such a luxurious property whereas a budget brand customer would love to inform his peer group about the exciting offer he availed and how it is a great deal for them to lap up too. Hence, it the specialty and uniqueness of the brand that will be the compelling and selling point for/to its customers.
RateGain expands its portfolio of competitive business intelligence solution by launching PriceGain-Air at World Low Cost Airlines Congress Event, held in London on 28th September, 2010. Organized by Terrapinn, the event was attended by more than 100+ low cost airlines across US, Europe and Asia.
Speaking at the launch, Bhanu Chopra, CEO, RateGain said, “RateGain is known for creating solutions that offer a competitive advantage to travel companies and has offered innovative market intelligence solutions for OTAs, Hotels, Airlines and Tour Operaters. We are expanding our current portfolio which presently comprises of NetReports and VisibilityGain, with PriceGain-Air.”
Gary Mayger, SVP, Travel – EMEA added, “With the ever decreasing brand loyalty in the airline world and where fares are constantly changing, it is imperative for the Airlines to maintain a perfect balance between the fares and services offered in order to be always on top of their competition. There is a burgeoning demand in the airline industry to track competition’s future pricing in order to implement an effective pricing strategy. PriceGain-Air is specially designed to offer a perfect solution to this increasing demand of comparative price intelligence among airline companies.”
Pictures from the event
Videos from RateGain
- How #hotel images impact #OTA bookings and #revenue via @HotelMarkNews http://t.co/qWnOMXyiNP #hotelnews about 36 minutes ago from web
- RT @tecnohotelnews: Perfilando tu estrategia de revenue y distribución [Informe @RateGain] http://t.co/RhA68Dy1wl #hoteles about 38 minutes ago from web
- RT@Hotelogix #technology #news is out! http://t.co/mljA0TWhdY … ▸ Top stories today via @RateGain @NWRCTourism @nicolinesmeele Expand about 4 days ago from web
- Hotel pricing: srt w/ a gd decision support tool that provides recommendations based on multiple variables #PGH http://t.co/v2WMhk7nUV about 5 days ago from TweetDeck
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