Have data, will travel: Why the tourism industry needs data analytics for a recovery

January 26, 2021 | By Nicola Villa

On a recent trip from my home in Amsterdam to Tbilisi, Georgia, I saw firsthand how complicated COVID-19 continues to make travel. Albert, my go-to airport driver, told me he just redesigned his website because many of his business travelers would prefer to book a taxi for trips to Belgium or Germany rather than hop a short flight. At Schiphol Airport, masked passengers wandered nervously through the terminals waiting for their flights while trying to maintain social distancing.

It’s no secret that the pandemic has devastated the global travel and tourism industries. In 2019, tourism accounted for more than 10% of global GDP. In the wake of the pandemic, an estimated 120 million people globally have lost their jobs in tourism, a fact that has hit women, young people and small entrepreneurs hard as they account for 80% of the global tourism sector. In developing markets, small and micro-businesses dominate tourism — particularly in growing sectors such as agri-tourism and eco-tourism — and are watching their investments wither.

But this moment is also one of opportunity to not only rebuild but also reimagine tourism. Innovative technology, public-private partnerships and data analytics are already allowing communities to fast-track their recovery by capturing economic benefits and fostering job creation. They are also increasingly ensuring a more adaptable, inclusive and sustainable sector that promotes environmental integrity as well as economic development.

In Georgia, tourism had been one of the fast-growing industries pre-pandemic, contributing as much as 8% GDP, with international visitors drawn to this cultural crossroads by its bohemian vibe, picturesque scenery and ancient wine traditions. While the tourism sector was able to sustain its summer season with local visitors, the impact of the pandemic has been profound, with less than a third of visitor volume in 2020, according to government estimates.

I was in Tbilisi in September to speak at the United Nation’s World Tourism Organization annual meeting, where we discussed solutions to the challenges COVID-19 has thrown in our path and how to put the tourist economy on track to a better and healthier future through the use of data and technology. I was also there to meet with the Georgian Prime Minister and Minister of Economy and Sustainable Development and to announce a new tourism partnership with the Georgian government and tourism agency that will help businesses in the sector pivot to new audiences and prepare for the gradual return of visitors.

The key tool here, for governments, private companies and small entrepreneurs in Georgia and beyond, will be data insights. Consumers use on average about 38 travel sites and plan their travels five weeks before their journey, surf social media for tips, post their vacation photos and trip reviews, and pay for much of their trips digitally. This generates massive, fresh pools of data — but pulling relevant insights in order to not only engage travelers but guide tourism investment requires expertise and advanced data analytics.

These insights are helping local hoteliers understand when it’s time to expand or encourage traffic to an under-the-radar attraction. This information can also tell them how to market to certain kinds of travelers — for example, the needs of a family versus a backpacker — or offer ways to manage overcrowding or seasonal lulls.

Insights also help government agencies at the local and national levels plan for their tourism recovery programs, from launching international marketing campaigns to deploying subsidies to citizens to stimulate local spending in the tourism sector. This makes for a sustainable tourism economy: ensuring the local community benefits from more visitors while maintaining a destination’s uniqueness.

For example, through Mastercard’s Tourism Insights, government agencies such the Georgian National Tourism Administration use anonymized and aggregated payment data — pre- to post-trip — to uncover consumers’ behaviors, sentiments and spending habits, allowing better decision-making and planning. Sentiment data, pulled from search engines, Mastercard transactions, social media and booking data, measures a visitor’s overall satisfaction with everything from weather to accommodation to security.

The global recovery rate of small independent hotels has outpaced recovery of large hotels by more than 50%, according to our Mastercard Recovery Insights report. Data shows that many are choosing to stay closer to home, which is driving up car rentals and creating a mini-boom in scooter and bicycle rentals in countries including the U.S., where micro-mobility surpassed 2019 levels by the end of July. The Czech government, the first to harness Tourism Insights in the wake of the pandemic, says it will help identify the segments of travelers spending the most money on the road, and their preferences, to better target tourism investment.

But deploying data insights is not the only way in which we provide help. For travelers and those who cater to them, we’re enabling contactless payments in more places — and raising the transaction limits in more than 80 countries for tap-and-go purchases — so travelers have fewer points of contact as they move through airports and hotels, helping everyone stay safer. In Singapore, we are working with the Singapore Tourism Board to add more contactless ticketing and payment options to its Visit Singapore Pass to make seamless, touch-free experiences the norm for visitors.

COVID has forced us to slow down travel for now, but it has also accelerated digital transformation, with millions of small and micro-businesses striving to become more resilient throughout the pandemic. That’s why we’re helping these businesses across the world make the switch to digital, ensuring they aren’t shut out of the global tourism economy and the opportunities it will afford once the crisis is over.

In these hard times, we will continue to work together with the industry and governments to navigate the challenges introduced by the pandemic, and to help rebuild a more inclusive and sustainable tourism economy.

Photo of Nicola Villa
Nicola Villa, Executive Vice President, Government Engagement