The travel industry is obsessed with Big Data and artificial intelligence. The genie is out of the bottle. But the best way to use it will trigger an intense debate and much soul-searching.
It’s not just the largest and richest companies in travel that are on the personalization path these days, and even the smaller players are currently grappling with the best ways to upend tech stacks to ready their companies for the big changes ahead.
From the stage and in conversations among attendees, the following were some of the issues on many companies’ minds at Skift Tech Forum in San Francisco Wednesday night and Thursday. The following are key takeaways:
A Data Divide
Most speakers at Skift Tech Forum are obsessed with how to use Big Data in the form of machine learning and artificial intelligence to improve their products and the customer experience. But there was not unanimity.
Roger McNamee, co-founder of Elevation Partners, early Facebook investor, and author of “Zucked: Waking Up to the Facebook Catastrophe,” argued that “data is a drug. To see into the thoughts of consumers is very compelling.”
But McNamee said companies like Google use data to manipulate consumer choice, which is inherently authoritarian, and that this destroys travel brands.
He said the way platforms like Facebook and Google do damage to children, and disseminate hate speech are public health and civil rights issues.
McNamee said travel companies have so much potential to be a force for good without allowing the big platforms to surveil consumer behavior. He said travel brands should provide their customers with burner phones with certain apps on it for their trips.
“There are so many opportunities for travel companies to be the good guys,” McNamee said. “Go for it, people.”
But McNamee’s opinions on data use were a minority view at the conference. Alaska Air chief information officer Charu Jain said personalization is “creepy” when it takes place out of context, and that highlighted how most travel brands at the conference were grappling with how to use Big Data to personalize and when.
John Padgett, chief experience and innovation officer at Carnival Corp., said the cruise line collects six billion data points per ship per week, and has cracked the code on how to use artificial intelligence to improve the guest experience.
But Padgett said that passengers who do not feel that the line’s personalization efforts are fundamentally improving their guest experience should choose not to be connected.
Tearing Up Older Systems
The organizing principle behind travel industry software systems is morphing toward putting the customer first. That may sound like spin, but it’s more about technical efficiency than consumer friendliness. In the past, hotel, cruise line, airline, and other travel technology companies have tended to focus on inventory, such as a room or a seat. But no longer.
Carnival’s Padgett said that one of the surprises his team encountered in building an internet of things service was that they had to tear up the cruise line’s old system that made the stateroom the center of how data was organized.
Padgett said Carnival revamped its tech stack to make customers and their itineraries be the central organizing principle, taking advantage of all the data points they can now collect on passengers as they move around a cruise ship wearing their internet-connected medallions.
“The PMS [the property management system] should no longer be the heart,” said Kevin King, chief operating officer of Shiji Group, echoing the early earlier points that customer data rather than room data is the most important thing to be able to offer personalization, and to enable the marketing automation to encourage repeat visits.
King said many of the hotels the company works with have monolithic old systems that loosely connect, but companies need to stop and think about tech changes.
“Not everything needs to be done immediately, especially in large groups,” King said. Companies should take their time “to piece it out.”
Expressing a similar sentiment, Padgett of Carnival said companies need to use the best artificial intelligence tools available and to have confidence about that intelligence before they implement changes. A machine has to have time to learn, he added.
Security Is Paramount
Laura Calin, vice president of strategy and solutions management at Oracle Hospitality, maker of the world’s largest property management system, said that compliance with regulations around privacy was one of the key investment areas for her team.
Kevin King of Shiji echoed the point saying that the company architected its system to ensure security from the start.
The industry is still figuring out best practices. approach. During a startup pitch at the conference, Andrew Gowasack, co-founder and CEO of TrustStamp, spoke of a so-called “identity lake” where digital records about a person can be store and shared in a protected way that promises not to run afoul of privacy compliance regulations or risk the security of data being compromised.
Stephanie Linnartz, Marriott International’s global chief commercial officer, cited the painful times after the chain discovered a breach of the Starwood reservation system, and said data security is paramount now in everything Marriott does.
Artificial Intelligence Is Spreading
Jessie Burgess, the chief information officer of G6 Hospitality (owner of the Motel 6 brand), said that the travel industry is in a sweet spot right now for technology because innovations that previously were accessible only to the rarefied few are now becoming available to most players, even if they don’t have world-class data scientists on their team.
Marion Mesnage, head of research and innovation at travel technology company Amadeus, said that because so many travel operations have moved to the cloud and computing power and speeds have been enhanced, many long-standing ideas in artificial intelligence are now being spread relatively quickly.
Mesnage said numerous artificial intelligence-powered startups are helping travel companies apply the benefits of machine learning and other techniques to their data sets to detect patterns and make more accurate predictions for operational efficiency.
Expand Revenue Streams
Numerous companies on stage at the conference spoke about how they are expanding their core businesses.
Linnartz of Marriott described how the hotel chain’s Homes & Villas site has become a distribution platform for luxury vacation rentals, and is enabling Marriott Bonvoy members to redeem vacation rental stays and experiences using the loyalty program’s points.
Arthur Chapin, senior vice president of product and technology for Expedia Group, said the company is expanding revenue management tools for partners, and also wants to go beyond its former selling focus to connect all parts of the customer journey. The first implementation of the connected journey will be enabling guests to chat with hotels about late arrivals and other glitches due to flight delays, for example.
Learn From Past Mistakes
Chapin of Expedia also cautioned hoteliers, who are introducing attributed-based reservations systems, where guests can book rooms with specific characteristics, not to make the room-attribute terminology confusing to guests because, for example, there is little agreement on what a “deluxe” room might be when considering how various brands describe it.
He likened the coming problem to how airlines have rolled out ancillary services in recent years, confusing passengers as to precisely what was being offered.
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Photo credit: Roger McNamee (left) of Elevation Partners spoke at Skift Tech Forum June 27, 2019 about the authoritarian nature of how Facebook and Google are using Big Data. At right is Skift founder and CEO Rafat Ali. Skift