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The Importance of Business Analysis in the Tourism Industry

by Business Analysis,

The tourism industry is one of the world’s largest industries with a global economic contribution (direct, indirect, and induced). This industry has experienced steady growth almost every year across the globe. According to UNWTO, international tourist arrivals increased from 528 million in 2005 to 1.19 billion in 2015 and this trend is estimated to exceed 1.8 billion by 2030. In Australia, the tourism sector contributes $152 billion to the economy, supports more than 300,000 businesses, and employs more than 660,000 Australians. Hence, the analysis of tourism data helps organisations to build a detailed picture of tourism, on local, national, and global levels.
COVID recovery for the tourism sector

Based on Economist Intelligence, before the pandemic, the economic impact of tourism was high, it made up 10.4% of global GDP and created one in four new jobs worldwide. However, since the COVID-19 pandemic, the global tourism sector has been hit particularly hard.

Governments have taken impressive immediate action to restore and re-activate the sector while protecting jobs and businesses. They are considering possible scenarios to recover the tourism industry, planning and preparing for a new normal. These include strategic plans to support the sustainable recovery of tourism, promote the digital transition and rethink tourism for the future. For achieving these goals, business analysis can play an essential role.

The value of Business Analsis in the tourism industry
Business analysis plays an important role in analysing and discovering hidden patterns in tourism data. Understanding the characteristics, preferences, attitudes and opinions of visitors and the travel trade is a significant trigger point for any tourism destination. Business analysts investigate tourists’ habits and preferences to help organisations with targeting advertising and offered services. For instance, knowing whether travellers who are staying at a resort are more likely to spend money on spa services than travellers who prefer bed and breakfasts.

Business analysts can understand and harness the power of big data and analytics to create Data-Driven solutions that aimed to support strategic planning, delivers tactical value, and creates competitive advantage. Furthermore, the rise of millennial travellers and big data has shifted a traditional business analyst role to a more versatile one. Especially with the growing popularity of short-term rentals such as Airbnb, travellers as opposed to usual hotels. This trend brings major challenges to the hotel market including a higher level of competition and changing consumer demands. All and all have led to the evolution of the role of the business analyst.

Techniques used by Business Analysts to analyse tourism data
There are multiple techniques that business analysts can apply to tourism data. Analysing the tourism data via data mining techniques can assist Business Analysts to identify tourists’ behaviors, and preferences and estimating the future trend. Predictive analysis can also be a very helpful approach for business analysts to check tourist favourites, providing a data-driven approach to tourism organisations, and helping them to reach out to their target markets just in time. For instance, whether most tourists prefer to rent vacation condominiums, stay in large hotels, or patronise boutique inns can tell a lot about the particular atmosphere and demands of the tourist market.

Next generation
The next generation of tourism market analysis uses consumer analytics based on either transaction data or mobile device data to go deeper. It gives cities, convention, and visitors bureaus (CVBs), and destination marketing organizations (DMOs) a more comprehensive view of tourism market dynamics.

Business analysts are no longer limited to projects and defining requirements but are now involved in helping organisations to make better decisions. Business analysts bring a sense of objectivity and perspective, ensuring that the business problem to be solved is so well understood that the solution is targeted, effective and efficiently designed to meet the business need. Business Analysis has the potential to revolutionise tourism business operations. By analysing big data, business analysts can provide recommendations for organisations in terms of future plans, promotions, and policies, which will drive far greater revenue and help sustain this vital sector long into the future.

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