A rack of servers in a large server farm
BalticServers.com, BalticServers data center

What is Big Data and do I need it?

The term big data, which has been coined relatively recently, can be confusing to a lot of people. Essentially, Big Data is a field that deals with data sets so large and complex that they require specialist processing software and hardware.

Big Data enables tourism businesses to make immediate decisions based on customer demand. Predictive modelling analysis allows integration of various data sources, such as news reports and social media feeds, to track trends in the industry. Airline operators use it to understand passenger behaviour and industry performance, for example they use big data in their revenue management for strategic pricing adaptations according to demand patterns. Accommodation providers can use big data to create relevant customisation packages based on different consumer groups’ demand patterns. Destination Management Organisations (DMO) turn towards big data to understand tourism flows and discover investment opportunities.

Do you need it? At this stage, no.

A lot of businesses investing in Big Data, e.g. through data scientists and data warehouses, do not fully understand how to yield direct benefit from it for their business. It is crucial that you get to know your business first, the issues you have, and the data points you currently collect, before hiring experts. It might be that there is a very simple solution, using the data you already have.

The things they don’t tell you

Analytics-generated insights can be easily replicated and may even already exist. There is no need to pay for something that is already out there in the public domain for free or low cost.

Turning big data insights into competitive advantage might require you to make changes to your business that you are incapable of. Do you want to radically change your business or the customer base it targets? These are deliberations to consider before committing to investing in big data science.

Companies need to learn how to use the data they already have in their core operating system to support their operating decisions before they are in a position to benefit from big data. It is often due to companies not fully understanding the information they already have that causes investments in big data to fail to pay off.

Businesses don’t always know how to manage data, analyse it and act upon insights. Investing in high-end analytics tools does not magically develop such competencies within a company.

Businesses need to have an established data-driven culture and experience of making decisions based on evidence, first. Pursuing a cultural shift towards evidence-based decision making might however be difficult and it is important to allow time for the team to be coached and gradually adjust to redefined work processes and business rules.

Share this article:

This article is from the free online course:

Understanding Data in the Tourism Industry

Edinburgh Napier University