Inspiration for the leisure and hospitality industry

converting Big Data into higher occupancy rates

“ A proper Big Data strategy makes it possible to once

again have personal relationships with consumers.”

Stef Driessen

Sector Banker at ABN AMRO

converting Big Data into higher occupancy rates

Big Data: game changer of leisure- and hospitality branch Launch and learn. 05

Tjingo puts together virtual travels from international databasesVirtual Touroperator clusters ‘On the Fly’. 07 Customer profiles Center Parcs increase conversion of its website and marketing campaignsThe power of personalized communication through the internet. 09

Combining customer data and social media makes KLM fly high The battle grounds have moved beyond the planes. 12

converting Big Data into higher occupancy rates

“ Big Data does not necessarily equal ‘Big Projects’.

An excellent strategy is to start off small and keep

things manageable, so you can learn and develop.”

Stefan van Duin

Director Business Analytics

4

The Economist Intelligence Unit in its research report

examples ‘Big Data: Harnessing a game-changing asset’

predicts a new era. Any businesses capable of tapping

into these valuable raw materials will increase their

lead on the competition. A sharp focus on data can

thus contribute to considerably higher occupancy rates.

Outsmart the other market players in anticipating major

developments in the industry. Or lead to considerably

shorter queues thanks to the accurate mapping of visitor

flows. Optimizing business processes through improved

knowledge of processing times, too, offers many benefits.

The biggest gains for the Dutch leisure industry will most

likely be a deeper insight into the consumers’ experience.

It clears the path for developing new business models.

A provider of accommodation services like Airbnb and

the taxi service Uber are great examples of such new,

data-driven leisure companies.

Personal relationships with customers Entrepreneurs used to have personal relationships with

their customers. Growth in scale has increased the strain

on such relationships. New technology, though, may

very well restore this. The key to this development is

the massive increase in consumer data – both in internal

databases and in the social media. It swells by half a

billion Tweets and 4.5 billion Facebook Likes a day.

By aggregating and analysing this data, companies have

increased their capabilities to identify their main customer

segments. Next, they can map customer preferences,

wishes and needs within these segments. What does

the target group expect from a product? What are the

thresholds or obstacles and what would make life more

comfortable for customers? The strategy is to fully focus

on increasing the relevance of communication and

product. In doing so companies abandon the standard

marketing campaigns, instead increasingly committing to

long-term one-on-one relationships with each consumer.

It is the modern marketeer’s Holy Grail: communicating

with the right customer about the right product through

the most suitable channel at the most relevant moment.

A number of concrete steps is required to enable this.

One of the first and most crucial elements is to always

place the strategic objectives of the company at the core

of big data aggregation and analysis – whether these

objectives encompass optimizing the profit, increasing the

number of customers, or enhancing their loyalty. If big

data projects fail to be in sync with a company’s objectives

they often bog down in experiments, with valuable data

being wasted, wrongly applied or collected, and without

having a clearly defined final objective.

Big Data: game changerof leisure- and hospitality branch

Today’s businesses are all digital – this feature certainly applies to the Dutch leisure and hospitality

industry. A growing number of airline companies, hotel chains, recreational parks, museums and

restaurants embrace ‘digital’ as an essential component of their business process. And ‘digital’ equals

‘data’. Big Data: a near endless flow of data growing exponentially every year. A raw material rich with

valuable hidden patterns and insights. Not surprisingly, Euro commissioner Neelie Kroes (IT and Telecom)

coins data as ‘the 21st century’s oil’.

5

‘Launch and learn’Entrepreneurs who want to be inspired will need to prick

up their ears and keep their eyes open. Where do trends

pop up, how do competitors respond, which start-ups

distinguish themselves and what topics can companies

explore to distinguish themselves within the industry?

And an entrepreneur will have to be willing to experiment,

too. Start with small projects, continuously monitor the

results, immediately scale up experiments if they are

successful and spread the knowledge across the company.

And bear in mind: failure is an inherent part of this launch

and learn process. It is both inevitable and valuable.

The added value of data Having a clear sight of their final objectives, companies

can then establish what data they need and where to

obtain this. This would include, e.g., a search for data

already available in the company and finding out which

partners may be approached to provide additional data.

Be very aware of the possibly highly sensitive character

of the data you collect and record. While legislation and

regulations is ever stricter, consumers, too, have become

much more self-confident and critical if their personal

details come into play. Any improper or careless use may

have major implications. Computer game manufacturer

Sony is a glaring example: the leakage of personal

information from its Playstation Network came at a

cost of a 171 million dollars - and counting. And that is

without considering the damage to its image.

A transparent approach towards consumers is vital for

working with personal data. As long as trust and relevant

added value are core values, consumers will nearly

always be willing to surrender part of their privacy.

If consumers are clueless about what companies might

or might not use their data for, such quid pro quo is

doomed to fail. This equally applies if companies are

ineffective in clearly communicating the added value of

the privacy that consumers have handed over. That said,

companies will see the loyalty and expenditures of their

customers grow rapidly if they meet these conditions.

Deloitte and ABN AMRO now present the inspirational

and successful cases of three leading players in the

Dutch leisure and hospitality industry: KLM, Center Parcs

and Tjingo. Their intelligent data use has reinforced the

relationship with their customers and has resulted in a

personalized range of products, a higher occupancy and

likewise margins. Through these cases this publication

seeks to offer inspiration for writing your own Big Data

success story. You are obviously welcome to call on the joint,

in-depth expertise available at Deloitte and ABN AMRO.

Stef Driessen

Sector Banker Leisure

at ABN AMRO Bank

stef.driessen@nl.abnamro.com

Stefan van Duin

Director Business Analytics

at Deloitte Consulting

Svanduin@deloitte.nl

6 Big Data: Game Changer of Leisure- and Hospitality-branch

“The market forces us into the tour operators’ seat,” says

Robert Schmidt, manager of online travel provider Tjingo.

“Their network of providers has taken many years to build.

Dynamic packaging is the automated alternative for this

essential network. This new technology profits from the

rise of vast databases in the international travel world.

In layman’s terms, it creates a platform for providers

from various travel clusters where they can interlink

their offers. Carriers and local travel experts linked to

real time accessible databases offer a mix of millions of

hotel rooms, flights, excursions, transfers and other travel

services. Examples are the well-known hotel booking site

Booking.com and large flight generators such as Amadeus

and Saber.

Virtual Tour OperatorsConsumers can use a dynamic packaging platform to

cluster these separate travel services, ‘On the Fly’,

which services are carried out by different providers.

No longer are they bound by the tour operators’

preassembled standard packages. They can arrange a

trip based on what they prefer. Organizations like Tjingo,

which facilitate this, are called Virtual Tour Operators.

The technology is quite complex. It involves searching

the gigantic hay stack hiding, which contains a myriad

of travel components. Only a few tiny puzzle pieces

need to be selected and they need to fit hand in glove,

at a competitive price. Schmidt: “Bear in mind that the

applications often run into the thousands per second.

You will then understand just how big of a challenge it

is to offer impatient consumers the trip they are looking

for within mere seconds.”

The major changes in the travel industry have yet to settle down. Experts estimate the value of the

European travel market as a whole at 250 billion euros. As research by McKinsey shows, some 40

per cent of this turnover is realized online, while in America this is already well over 50 per cent.

So, the online travel industry still has an enormous growth potential. The pressure on traditional tour

operators, though, is mounting. And this is felt throughout the industry. Since many of the providers do

not purchase and package hotels and flights themselves, they depend on travel packages offered by tour

operators. And as more tour operators vanish this well runs dry. What’s more, the fees are dropping.

Tjingo puts together virtual travels frominternational databases

7

Various distinctive options are available to utilize the fast

connection and analysis of large quantities of data. Using

the data collected from transactions booked earlier will

considerably increase the speed of the service. Every

time the platform puts together a trip for a customer, the

specific data, whether this concerns the price or otherwise,

is recorded and analysed in the in-house database.

Thanks to the knowledge collected in these so-called

price grids, each subsequent application will result in a

more effective search while the customer service is

accelerated as well. “And the faster the service, the

higher the conversion,” Schmidt emphasizes.

Trumping the competition As more and more parties have access to this technology,

providers will have to look for new possibilities to be

distinctive. “A detailed insight into the customers’ wishes

and interests is vital to that end,” says Schmidt. “We

closely collaborate with our sister companies Zoover

and HolidayCheck and – each and every day they receive

thousands of travel reviews and related content.”

A link with this information to its own well-stocked

booking database, means Tjingo can identify inchoate

travel trends among consumers, and their relevant

preferences. It can anticipate this quicker than the

competition does. This may involve the rising popularity

of a region or accommodation but other elements, too,

through which a travel provider can distinguish itself.

Analysis of price developments and search questions in

Google make travel providers highly capable of producing

well-defined forecasts about how air travel will develop.

An American travel provider has recently started to share

this knowledge with its customers through a ‘price

forecast’ incorporated into the website. Customers can

use this information to determine whether they will book

their trips immediately or whether to wait until the price

has dropped. “This creates a fiendishly complex little

game,” Schmidt says. “The abundance of variables that

could directly impact the margin you may charge as a

provider is partly to blame. The main lesson is: check your

data extremely well and then determine your strategy.

Anyone who is not rigorous about this will see their

margins melt away or their customers go over to the

competition in a heartbeat.”

8

Center Parcs applies complex real time technology to

ensure the communication with its – potential – customers

is as relevant as possible. “The average internet user

has a rather limited attention span,” says Rob Boeyink

of IQNOMY, the company supporting Center Parcs

in personalizing its online customer communication.

“Since the time they are likely to spend on your

website is relatively short, the trick is to provide them

with as much relevant information in the shortest

possible time slot. Fail to do so and they will usually

be gone in a flash.” All visitors of the Center Parcs

website are profiled anonymously in real time to

prevent this from happening.

In a split second all signature features are linked to a

database of hundreds of thousands of earlier visitors.

The information examined includes the preferred date

of departure and the number of persons. Other websites

visited, any interests that can be derived from this,

and the behaviour during any earlier visits to the Center

Parcs website – all of this is scrutinized. Have internet

users visited the homepage only briefly, or have they

looked at information on specific recreational parks or

preferences?

Smart algorithms All available information is immediately added to the

anonymous interest profile of the visitor. IQNOMY has

coined this process real-time multidimensional profiling.

Smart algorithms use this profile to select the most

relevant information for each visitor. The website is

divided into separate fields, into which variable content

can be uploaded. This creates the option to provide certain

visitors with information on the many recreational

possibilities for children.

customer profiles Center Parcs increase conversion of its website and marketing campaigns

The selectiveness of online consumers is rising and their filter options are expanding. Many consumers

have even become blind to the profusion of ads they are offered through online channels. The marketing

world refers to this phenomenon as ‘banner blindness’. Hence the rising need to offer consumers

relevant information. As yet few Dutch companies use the power of personalized communication through

the internet.

9

Other visitors, on the other hand, may thus obtain

information on water sports facilities, the lush nature

surrounding a specific bungalow park, or the possibilities

of a romantic weekend. Boeyink: “Each visitor will thus

get to see a unique website, geared to their specific

preferences and interests as much as possible.”

Real Time Bidding The technology behind all this is called Real Time

Bidding (RTB) or the automated, real time auction of

online ad space. Advertisers and website owners

subscribe to a high tech bidding platform. When an

internet user visits one of the subscribed websites,

the ad space available is auctioned off in seconds.

So, showing a single ad to a single internet user

– a so-called impression – is what’s at stake during

the bidding. The platform offers advertisers all the

information they need to assess the value of the

impression available.

Once again, visitors’ demographic data is linked to

knowledge about the interests and the surfing history

of internet users gathered from various databases.

Refined algorithms weigh the data available and

determine whether Center Parcs will join the bidding

and up to what amount. Similar algorithms separately

align the content of the ad with the preferences recorded

during an earlier visit to the Center Parcs website.

“Ever since the relevance has been enhanced the

number of people who have clicked on to personalized

content blocks has risen by an average 460 per cent,”

Boeyink states. “This has considerably increased the

number of bookings.”

More turnover, greater customer loyalty He expects personalized communication to have an

even more significant effect in the longer term.

“New insights enable organizations to gear their entire

product and services to the customer,” is his prediction.

10 Customer profiles Center Parcs increase conversion of its website and marketing campaigns

“It allows Center Parcs sharper anticipation of the

customers’ needs embedded in hard data instead of

having to go by hunches of responsible managers.

This data may be tapped from the location data of

mobile telephones, as they show which areas and

attractions of a recreational park are visited most.

This is still a major leap of faith for many organizations.

One that will, however, be rewarded with extra

engagement, customer loyalty and, thus, profit.”

11

Maintaining contact with the passengers throughout the

customer journey is the key issue. Offer service, inspire,

continue to be top of mind and, above all, get to know

customers better. Social media offer the perfect

opportunity to that end. Before April 2010, KLM still

only used its Facebook and Twitter accounts mostly as

experimental marketing tools. And then, as an Icelandic

volcano erupted and spewed out a giant ash cloud, these

channels provided entirely new avenues to explore: an

effective source of information for the tens of thousands

of stranded travellers. “It goes to show that a crisis

often generates new opportunities too,” says Robertjan

Groeneveld, KLM’s Social Media Hub Manager. “Making

the initial business case for an integrated social media

policy is usually a tough thing to do. Now though, nobody

within KLM has any doubts about the added value.”

Platform for flow of information Facebook and Twitter have by now become the platforms

on which 130 agents respond 24/7 to the 30,000 odd

KLM related reports per week, in ten languages. Without

the proper technology this would be an impossible task.

KLM closely collaborates with Salesforce since 2011.

Just like a growing number of other technology parties

the American market leader provides a platform for

collecting, linking and analysing huge amounts of data –

personal and otherwise. As this platform spots urgent

messages early on, too, priority processing is possible.

Using this scalable solution, KLM can process some

3,500 cases involving issues like delays, changing flights

and lost luggage. Agents can respond within the hour,

thanks to a colossal database of cases handled.

“Nevertheless, our goal is to shortly reduce this to thirty

minutes,” Groeneveld emphasizes.

This is merely the visible part of KLM’s social media

strategy. Behind the scenes, the airline company

combines all passenger and related data. The resulting

database has some hundreds of thousands of customer

profiles by now. When passengers log in, for example,

through the Flying Blue loyalty program or their social

log-in, a Customer API supplements the profile with

personal preferences, interests and other relevant data.

Do customers have many Facebook friends in a certain

country? Do they open special-offers mailings? Does

their click behaviour in iFly – KLM’s digital magazine –

indicate a strong preference for tropical beach holidays?

If so, the platform will provide this information to the

marketing department, where the information is put

to use for specific offers that appeal directly to the

experience of individual passengers.

combining customer data and social mediamakes KLM fly high

Few industries are caught up in such fierce competition as the aviation industry. And while the need

to offer added value is strong, the opportunities to do so are few and far between. Passengers often

check in at the same counter, board the same type of plane, their seats are almost identical and they

more or less enjoy the same meals, services and inflight entertainment. Air travel thus threatens to

become a commodity and the only thing left for providers to do is compete on price. To avoid that

scenario, the battle grounds have moved beyond the planes.

12

Online service continues inside the plane Any issues or complaints passengers may have can

likewise be tackled in an efficient and relevant manner.

“In the old days, if passengers had trouble checking in,

we first had to ask for their booking code,” Groeneveld

relates. “Now we can immediately send them an email

that we have checked them in online: ‘Your boarding pass

is in your mail box.’ What’s more, our cabin staff is

equipped with iPads nowadays, so we can send them

relevant information about passengers. Hence, thanks

to these on board iPads our online services are now

available inside the plane, if necessary.”

KLM’s comprehensive data strategy affects the

organization at several levels. Groeneveld: “Our

customer-oriented communication has increased the

brand awareness tremendously, especially with our

target groups in Asia and the United States. Apart from

the media attention generated, this is largely due to

numerous positive customer responses. They spread

through the various social media like wildfire – in parts

of the world where our name sounds less familiar.”

A great world stage performance for a relatively small

Dutch player. Using Salesforce, KLM immediately

channels this feedback to the departments involved.

They experience this as highly motivating. “Where

departments used to operate in silos, this binds them

together,” says Groeneveld. “Many new campaigns

and initiatives have now become a joint effort.”

13

Anticipate future customer preferences now Analysis of the total quantity of data collected produces

a great variety of important insights too. It encompasses

issues like how the organization functions and how

customer preferences and behaviour can help optimize

the turnover. Among the tools available to that end are

smart algorithms: they can calculate the best possible

seat capacity for each flight and the best possible ticket

price for each specific customer. Groeneveld: “Over time

we create a ‘360 degrees view’ of our customers –

knowledge we will increasingly use proactively.

This will result in seamless customer journeys, during

which we offer each separate customer the most

relevant content available at the right time, for the right

destination. It likewise allows us to right now anticipate

future customer preferences and needs.”

14 Combining customer data and social media makes KLM fly high

15

DisclaimerABN AMRO considers the opinions recorded in this publication to be based on reliable data and information, which have been carefully processed in our analyses and forecasts. Neither ABN AMRO, nor any of its officers may be held responsible for possible inadequacies in this publication. The opinions and forecasts reflected represent nothing more than our own vision and may be changed without any prior notice.

©ABN AMRO, February 2014This publication is solely intended for internal use. The use of text parts and/or figures is permitted, provided the source is clearly mentioned. Multiplying and/or disclosing this publication is prohibited, unless written authorization has been obtained from ABN AMRO to do so. Texts were closed on 4 February 2014.

Thanks toGert Wim ter Haar and Robertjan Groeneveld (KLM Royal Dutch Airlines)

Robert Schmidt (Tjingo, de Vakantiematser)

Christian Vriens (IQNOMY)

Fleurine Mijinke, Kees Schilder and Hidde Rijntjes (Deloitte, Tourism, Hospitality & Leisure).

Wouter Sterk, Jan Hein Endlich and Pieter van Ginkel (ABN AMRO)

Commercial contacts Stef Driessen, Sector Banker Leisure at ABN AMRO, tel. 06 539 853 29

Stefan van Duin, Director Business Analytics at Deloitte Consulting, tel. 06 - 12 34 44 57

Editorial staff Arnoud Groot

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