Upping the travel ante with information management and analyticsHow to enable better service and greater efficiencies by mining structured and unstructured data

by Ashim Bose

Business white paper

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Like most other modern industries, the airline industry is on a mission to generate revenue, curtail expenses, and boost profits. High fuel prices and rising operating costs make it a high-stakes business to be in – leading travel providers to look for innovative and nontraditional revenue sources.Fortunately, the industry still shows signs of growth, with the Federal Aviation Administration (FAA) forecasting that passenger travel will double over the next two decades, with the number of U.S. air travelers reaching 1.2 billion by 2032.1 Although it can be a risky business to be in, it’s also one with a history of stability. Weathering a number of challenges such as 9/11, the SARS scare, and the most recent financial crisis, aviation managed to grow 53 percent since 2000.2

Today, one of the challenges the industry faces as it continues to evolve relates to customer satisfaction: air travel continues to generate low passenger satisfaction scores, and recently was in the bottom three among 47 industries polled (in the company of cable TV and newspapers)3 – which probably helps explain why determining how to achieve customer loyalty is more important than ever. One study suggests that even a five percent improvement in customer retention would result in a 25 to 100 percent increase in profits – also noting that repeat customers spend, on average, 67 percent more than new customers. 4

Another element at play is the amount of information we digest on a daily basis. In today’s information age, we’re constantly bombarded on a daily basis, inundated with both structured and unstructured data that offers both business- and human-friendly information, conveyed privately and via shared/public channels. The sheer volume of information we encounter can be daunting, but the good news is the airline industry is uniquely qualified to leverage this data into a competitive advantage, with an evolving, technologically advanced business model that uses information from both direct and indirect channels – business intelligence used in everything from the airports and planes to IT systems and mobile applications.

When navigating these modern complexities, the traditional approaches, legacy architectures, and organizational models that served the industry well in the past no longer deliver the results necessary to survive and thrive in the consumer travel industry today. Victory will go to those bold enough to embrace innovative solutions that provide actionable intelligence at the right time to the right decision-makers, advanced technologies that extract

meaning from both unstructured and structured data sources to drive efficiencies, and new talent models to produce differentiated customer buying experiences.

Succeeding in this new world of consumer travel requires providers to overcome the big data challenge – aggregating and analyzing millions of transactions and billions of interactions to unlock the secrets in the data, and processing the information until telling patterns become evident. Valuable data can be extracted from all levels of the enterprise systems, including the structured databases traditionally relied on to run the business:

• Ticketing and reservations

• Customer support

• Ancillary sales

• Trade data

• Irregular operations (IROPS)

• Maintenance logs

• Crew scheduling

To gain deeper insight on the most compelling business drivers, global information from internal and external unstructured sources can also be mined. Potential sources include data pulled from online sales, call notes, text and media messages, web chat, blogs, mobile applications, survey responses, and email.

Correlate services offered to buyer behaviorBy aggregating and analyzing this data, travel providers can move from a one-size-fits-all marketing approach that used to market beach and golf resorts to people with no interest in either beach or golf, to a targeted process to market family activities to parents with young kids, or off-the-beaten-path restaurants to travelers who tend to avoid chain restaurants and have a preference for certain types of cuisine.

Today, rather than conduct focus groups to help identify which products and services best resonate with customers, airlines can interpret unstructured data, using that information to measure demand. And instead of only being able to determine which offerings are the most popular, sentiment analysis in call centers can provide even more valuable information at the granular level: noting which agents and/or platforms are most effective, which scripts generate the strongest results, and how the latest offers are impacting customer attitudes toward the airline.

The value of information can be monetized by constantly monitoring unstructured data such as consumer comments posted online on Facebook, LinkedIn, or Twitter. Social media data is frequently harnessed to inform which services or solutions are green lighted and rapidly delivered to the customer base.

1 “2011 Saw Modest Airline Industry Growth, FAA Says.” AINonline, http://www.ainonline.com/aviation-news/ain-air-transport-perspective/2012-03-19/2011-saw-modest-airline-industry-growth-faa-says, accessed on October 2, 2012.

2“Global Market Forecast 2012–2031: Navigating the Future.” Airbus, http://www.airbus.com/company/market/forecast/, accessed on October 2, 2012. 3“U.S. Airlines Scored Poorly in Consumer Survey,” Wall Street Journal, June 18, 2012. http://online.wsj.com/article/SB10001424052702303703004577475002478

830004.html, accessed July 30, 2012. 4“Retain Your Customers in a Down Economy,” HP viewpoint paper, h20195.www2.hp.com/v2/GetPDF.aspx/4AA2-8064ENW.pdf accessed on October 2, 2012.

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Information management and analytics (IM&A) also improves IT efficiency by integrating data that currently resides across the enterprise but has traditionally been stored in disparate silos of information (including archives). In addition, it allows enterprises to monitor the results of customer surveys and relevant blog posts in ways that positively impact brand awareness. By empowering individuals to quickly respond to customer service complaints, especially those of high-value customers who have numerous online connections, friends, and followers, travel providers can turn a negative brand sentiment into a true “wow” experience.

Structured data can be leveraged to offer insight into what each individual has bought or indicated as a preference in previous transactions. And the unstructured data will often measure sentiment analysis and gauge that individual’s propensity to purchase. Together, the data allow airlines and other travel providers to replace the educated guessing game that characterized yesterday’s travel marketing.

How IM&A leverages a fair advantageIM&A enables better-informed business decisions that can be made when they need to be made, accommodating a world that’s “always on.” By leveraging tools surrounding the business drivers and trends related to big data, risk management, cloud, and mobility, IM&A helps make information matter to benefit the customer experience, improve organizational efficiency, offer successful product and ancillary services, and grow revenues.

By mining valuable insight to drive tailored services, increased convenience, and emotional engagement, IM&A creates opportunities for travel providers to:

• Innovate to develop new revenue streams

− Upsell incremental services

− Tailor fares and offer other preferred products and services

− Correlate buying behaviors to services offered

− Enable competitive revenue management

• Differentiate the customer buying experience

− Perform dynamic sentiment and behavioral analysis

• Identify customer buying patterns

• Determine how competitors are influencing the market

• Increase efficiencies by reducing time and effort

− Enable real-time decisions

• Mobilize airport operations

• Handle IROPS efficiently

• Coordinate maintenance

• Optimize crew scheduling

− Mitigate risk

• Assist with information gathering during mergers and acquisitions

− Accommodate legal requirements

For a high-level view of how information goes from insight to action, see figure 1.

Information management and analytics

• Tailored services

• Increased convenience

• Emotional engagement

delays weather

luggage

upgradesdiscounts

mechanical

Integrated travel experience

airports hotels command center

travel agentscar rental frequent flyer program

Actionableinsight

rail station

Events

Figure 1: How information becomes action

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All together, these opportunities enable traveler providers to deliver an integrated (and improved) travel experience. To ensure access to the most current and useful information, airlines should consider the following avenues:

• Context-aware analytics, which use information about the user to improve the quality of an interaction through dynamic sentiment and behavioral analysis

• Pattern-based strategy, which permits enterprises to identify new patterns, model response, and adapt the organization to execute the response – enabling airlines to correlate customer buying behaviors to services offered

• Monetizing information, which connects the information within an enterprise to allow airlines to tailor fares and bundle other products and services to increase ancillary revenue

• “Shared” information ecosystems, which exchange data between systems, departments, customers, and partners, thereby reducing the time needed to collect data for mergers and acquisitions activity, litigation, issues associated with irregular and off-schedule operations, and more

UpsellOne solution that helps airlines grow revenue and benefits the customer is to upsell customer-focused incremental services. Consider the following scenario: if an airline knows that Bella loves to travel but hates to carry her own bags and pay a high fee for checking luggage (as she’s indicated in no uncertain terms on Twitter), the airline can use this insight to offer a discounted baggage fee at the time of booking the ticket.

HP put this concept into practice to help Avis remove the guesswork from determining what price customers were willing to pay for GPS in their rental cars. By mining online traffic of five million unique site visitors, the HP Autonomy Optimost solution tested 10 different price points in 10 different locations and came up with an offer to significantly increase their online booking revenues.5

PersonalizeIM&A can also be used to deliver personalized services and attention. Airlines can leverage the power of information to tailor fares and other products and services by supporting a range of configurations to permit variable pricing, offer timing, targeted passengers, and offer bundling. For families traveling with small children, bundled movie and meal packages sold at prices below their a la carte fees tend to be popular, and parents who know their kids will be able to enjoy one of their favorite movies worry less about how they’re going to keep everyone happily occupied for the next three hours. For flights that take place during regular meal times, travel providers can offer several meal options, and make them available to the traveler when he or she is booking the trip.

Another example pertains to how an airline might use intelligent search to increase annual bookings and revenues. Most travelers have a budget in mind (although they may not know what destinations are available in that budget), and many customers like to view photos or videos of recommended travel locations. Armed with this insight, an airline could develop a graphical user interface (GUI) that makes location recommendations for customers, showing them what’s available without requiring them to spend hours requesting flights and fares to find a match.

The program could allow travelers to input their budget, preferred travel dates, and interests before generating a range of destinations. In addition, it could also suggest trips by analyzing an uploaded video to “find places like this” or show frequent flyers which flights have seats that can be purchased with air miles. Social media could also be leveraged by allowing travelers to post details about their upcoming trip to Facebook or another site, a post that might spur friends or acquaintances to join them or book their own getaway.

In addition, facial recognition software technology will soon enable airlines to analyze real-time images of customers, match them against the customer databases, and provide their travel profile information to the gate agent before the passenger checks in, thereby enabling a more personalized interaction. The traveler

5“Global CIO: Autonomy, Part II: Multivariant Testing And Killing The Hippos,” Information Week, May 18, 2009, http://www.informationweek.com/news/217500589, accessed on July 31, 2012.

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walks away from the gate desk feeling less like a face in the crowd and is more likely to book future travel on that airline.

Measure and influence sentimentOne of the most significant ways that IM&A can be used is to monitor and impact customer sentiment. For example, if a vice president of marketing notices that her airline’s growth has stagnated, she can program a search of the social networks, blogs, and the airline’s intranet to evaluate passenger bookings, free-form survey results, or other text or recorded conversations. By analyzing customer opinions, grammatical nuances, and voice inflexions, the software can determine that while passengers like the airline’s new routes and fares, they miss the personal touch points the airline initially earned a reputation for providing.

Managers can then put together a strategy designed to improve the customer conversation and increase touch points, with analytics supplying near real-time feedback such as which call center scripts are most effective, which products and services are most popular, which offerings bring in the most revenue. Collectively, this greater understanding of what its customers want leads the company to return to a period of growth, see more positive customer sentiment, and note greater staff productivity, which is closely related to the improved interactions with customers.

Gain efficienciesIM&A also unlocks the potential in data to improve airline efficiencies, by giving airline staff members the information they need to make educated, real-time decisions pertaining to airport operations mobilization, irregular operations, maintenance, and crew scheduling. For example, off-schedule and irregular operations (OSO and IROPS) have traditionally been costly, manually intensive operations characterized by a lack of sufficient business intelligence and analytics – and which typically lead to customer dissatisfaction with the issue’s resolution.

The solution is to make the process automated, rules-based, and configurable, supporting the rules surrounding other airline (OA) prioritization, hotel agreements, passenger status, etc. The outcome: faster and better decision-making based on real-time and historical data; improved utilization of crew, equipment, seat inventory, and fuel consumption; enhanced customer satisfaction and increased retention; reduced head count by minimizing the manual labor required to support OSO and IROPS; and continuous improvement of the re-accommodation rules based on available historical data.

Another example around improving operational efficiency is related to connecting airports. With hundreds of aircraft connecting throughout the day, not having accurate aircraft arrival information can result in unnecessary costs and passenger disruption. These costs average close to a million dollars per hub per airline per year. By leveraging available data and calculating more precise times by combining publicly available data about weather, flight schedules, and other factors with airline and airport data, it’s possible to more accurately specify arrival times and achieve significant savings.

Minimize riskAnd while it’s not necessarily one of the more intriguing benefits, IM&A is also inherently valuable in helping travel providers mitigate risk through mergers and acquisitions and other legal processes. The ability to aggregate and search structured and unstructured data enables powerful meaning-based computing, which can search text files as well as voice and video recordings for relevant information.

HP helped create an electronic data reference model (EDRM) that uses a pattern-based clustering framework to locate relevant and applicable data, which is particularly useful with the e-discovery process often used in legal cases. HP’s technology to support ERDM goes beyond archiving and storage capabilities: information-based archiving and storage expedites information retrieval, making discovery more efficient – both in terms of time and labor costs since electronic search minimizes the time and the number of individuals needed to review materials.

For example, HP recently helped an international shipping company to rapidly ingest 60GB of raw email PST files, half of which were foreign language documents. By using Early Case Assessment, the legal team was able to reduce the review volume by 95 percent before the project went into production. An automatic detection of multiple foreign language documents and native language search dramatically reduced the time and cost required. And as a result, the data was produced and accepted by the U.S. Department of Justice in accordance with their standards, leading to a tremendous avoidance in risk and cost savings of 50 percent.

Why airlines need to act nowIn the highly competitive, commoditized world that is modern consumer travel, providers must monetize the information-based currency to generate much needed incremental revenue and profit. With ancillary sales responsible for a 66 percent increase in revenue

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© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

4AA4-4045ENW, Created October 2012, Updated December 2012, Rev. 1

from ancillary services between 2009 and 2011,6 understanding what sells and why is no longer a luxury but a requirement to prosper in these economic times.

For the first time ever, hardware and software technologies are enabling travel providers to quickly uncover new business models and adjust their approaches to accommodate shifting consumer preferences. Analytics helps travel providers discover techniques that can return the industry to a time when consumers feel brand loyalty again. These concepts are no longer merely competitive advantages; they’re requirements to play the game.

Partnership: the route to a smooth IM&A experienceWhile most people readily realize the benefits and capabilities afforded by the field of information management and analytics, few people fully understand how to make the transition from wanting to mine the data to actually implementing an IM&A strategy. The best path to an effective deployment involves entrusting the effort to a partner with experience, one that understands which information has the power to drive the industry forward.

One of the three major providers for passenger service systems, HP knows the travel industry. We have more than 9,000 travel and transportation providers stationed around the world and six global Centers of Excellence on four continents. Over the last 15 years, we have performed 50 airline industry system migrations and mergers, and our solutions continue to process more than 500 million passengers boarded annually.

With more than 45 years of operational excellence in managing complex IT environments – and 20 years dedicated to travel and transportation, HP provides a broad set of proven, industry-specific solutions. We help the travel industry turn data into actionable information by offering end-to-end advisory, consulting, implementation, and hosting.

• Information strategy and organization services provide an organized, disciplined, and comprehensive approach to connecting intelligence across organizations

• Information management and architecture services manage 100 percent of data (structure and unstructured) across its lifecycle and improve data consistency and accuracy

• Business analytics and information delivery services distill and derive meaning and insight from relevant information by understanding business needs and helping to distribute or embed it to the roles and moments that matter most

• Business solutions – social intelligence services combine data from emerging social media and mobile sources with existing traditional enterprise structured data to drive enhanced customer engagement and profitability

• Hosted delivery – managed services, cloud, hybrid services help leverage a variety of software and solution delivery models including on-premise installation, hosted, SaaS, cloud computing, and multi-tenant SaaS for data and analytical service needs

• Advanced information services offer a comprehensive set of services to analyze big data from multiple sources in real time by implementing an optimized real-time analytics infrastructure

Never before has the statement “information is power” been more true, but unlocking the full potential of the data requires an intimate understanding of how to interpret it. Call on a partner that can help you find your way to analytics success. To learn more, visit www.hp.com/go/bi.

Ashim Bose

Senior Director, strategy and portfolio for information management and analytics

HP Enterprise Services

6“Airline ancillary revenue continues to grow but traditional channels are the key to future performance,” Amadeus. http://www.amadeus.com/blog/24/07/airline-ancillary-revenue-continues-to-grow-but-traditional-channels-are-the-key-to-future-performance/, accessed on October 2, 2012.