ARC’s clients can access its data in multiple ways, says Becky Briggs, senior manager and data steward for the Data & Analytics group at ARC.
Prospecting for Greater Insight
ARC turns travel industry data into pure gold.
ARC is an airline-owned company that has the unparalleled position of helping the travel industry not just manage and understand data but also capitalize on that data to be more competitive and improve relationships with customers.
Like a prospector panning for gold, organizations use advanced data mining techniques to sift through data to reveal nuggets of insight. For the travel industry, ARC struck a mother lode and now shares the wealth with its customers, who create their own fortunes with further refinement.
Stake a claim
In 2000, ARC realized that it had enormous untapped resources. “We were sitting on a gold mine of data,” says Becky Briggs, senior manager and data steward for the Data & Analytics group at ARC. “We had a lot of data in cold storage where you couldn’t run ad hoc queries against it or do any sort of analysis. It was just stored.”
To improve access and insight, ARC knew it needed an enterprise data warehouse (EDW) solution with the capacity and scalability to handle its data volume as well as thousands of users running its applications, products and services. When Briggs and her team had completed their search and presented their findings on the Teradata system, she notes, “it was one of the easiest multi-million-dollar sales that I’ve done with a board of directors.” The visionaries on the board quickly saw the value of an EDW’s capabilities to take ARC to new and profitable destinations as well as provide much greater insight into the data for customers.
The original plan called for initiating an EDW beta test in October 2001. But in response to the Sept. 11 terrorist attacks, ARC launched the data warehouse early—on Sept. 12, 2001. “We used it to help our airline owners and others with what was a pretty horrendous crisis,” Briggs says. Since then, the system has continued to provide critical information on a daily basis.
"Because we have 12 months of advance-purchase data, it gives more credibility to the predictive analytics that we do."
All in a day’s work
What’s remarkable about ARC is its approach to sharing data to benefit its customers throughout the industry. Many of ARC’s tools—such as the Document Retrieval Service, which supports e-ticketing—are offered at no charge to ARC-accredited travel agencies and participating airlines. “It’s not all about the revenue,” says Briggs. “We are in a unique position to serve the travel industry in ways that no one else can.” It is no coincidence that by operating on this principle, the Data & Analytics group has seen double-digit growth annually from 2002 through 2007.
The data ARC gathers can be accessed in several ways. Some clients make ad hoc queries. Others, such as major carriers, receive raw data feeds, which are then used for their own in-house analytics. Midsized carriers and others without extensive investment in internal IT can employ ARC-developed interactive front-end tools allowing Web-based analytics like DataXpert. This online application requires no special software to be loaded by the customer, hardware or data storage. The analytic tool provides access to customers’ ARC-settled transactions for origin and destination sales, helping airlines identify new revenue opportunities, assess agency incentive programs and optimize fare promotion programs.
Underlying DataXpert—and many ARC solutions—is the data warehouse: ARC COMPASS. The products and services created using this platform let airlines track sales, marketing performance and marketing trends; they also enable airlines to monitor revenue accounting and help identify potential fraud.
Analytics helps ARC customers monitor industry trends and predictions and find opportunities to improve service. The company is developing a product enhancement that shows the purchaser’s demographics in addition to the airport being used. “It will give airports and airlines better insight into their customers and help with pinpointing potential marketing campaigns and other opportunities,” Briggs says. Analysis of travel patterns can show whether price, convenience or other factors caused travelers to choose one airport over another—a condition called “airport leakage.”
But insight is not limited to what happened in the past. Advanced ticket sales offer a unique opportunity for the travel industry. “Because we have 12 months of advance-purchase data, it gives more credibility to the predictive analytics that we do,” says Briggs. “It enables us to look at where people are traveling to and from, and the airports being used.” ARC also is working with airports by offering insight into capacity planning. This helps them gauge current and future demand, which, in the long run, benefits the entire industry as well as the traveling public.
Just as miners need to differentiate fool’s gold from the real thing, predicting and preventing fraud is a major job for ARC. Airlines were losing millions of dollars through credit card and other travel-related fraud schemes. To thwart these practices, ARC employed Teradata Warehouse Miner, predictive models and fraud analysts to analyze transactions.
Before this initiative by ARC, fraud detection was slow going and very fragmented across the industry. It could take six weeks to two years to realize fraud had occurred. “The EDW has allowed us to shrink that time,” Briggs says. “We’re looking for fraud triggers within hours of a ticket being sold.” As a result, travel agency fraud was reduced more than tenfold in five years.
Detection is just one aspect of combating fraud. Utilizing past trends, ARC “looks at the predictive and the preventative,” says Briggs. It is working with airlines and travel agencies to develop benchmarking criteria to spot potential fraud.
"It was one of the easiest multi-million-dollar sales that I’ve done with a board of directors"
Tapping into new opportunities
Building on a base of historical travel data, ARC has increased its EDW’s value by adding information on flight schedules, worldwide destinations and flights flown, and public domain U.S. census data.
Always looking for more ways to improve the business, the company plans to add more demographic and global data in the near future. In addition, ARC is exploring new ways to support the entire travel industry. These include:
- Data hosting services for travel and transportation companies, as well as services that use ARC’s data or combine it with customers’ data. Says Briggs, “It’s one thing to come up with the model, but how do you turn that into an economic benefit to customers and help them integrate it into their processes?”
- Augmentation of customers’ in-house IT departments, particularly as companies look for ways to increase efficiency. “We know that’s an opportunity, and we’re working with several customers to see how we can integrate ARC resources with the customers’,” she adds.
Beyond exploration, ARC is in the process of implementing:
- Improved market analysis. ARC is looking at advance-purchase data and overlaying it with demographic information, the price of oil and the consumer price index to see how these factors affect the travel industry as a whole or a specific carrier. “That’s where we are headed with our next-generation predictive analytics,” Briggs says. “This will allow customers to see where they are going, not just where they have been.”
- A more interactive dashboard experience for customers. The intention is to raise the bar on presentation tools to make it easier to interpret data and broaden the audience for these advance tools.
- Greater insights into airline customers and their buying habits. “We’ve found out from some of the research we’ve done, even the largest airlines don’t have all the insight they want or need into their customers,” Briggs notes. “That’s an opportunity for ARC to provide the information and to help customers use the data and achieve the maximum ROI [return on investment].”
The business value soars with each incremental investment in ARC COMPASS. Introducing tools that allow faster analytics—such as more real-time offerings where clients can set parameters and drill down into the data—enables more timely analysis. “We’re always refining and re-evaluating our business rules and assumptions to make sure that our predictive models are correct,” Briggs says. “This is one of the biggest competitive advantages we offer to the ARC data customers.”
From panning gold to fashioning it into useful implements, ARC provides the travel industry with the tools to strike it rich. The EDW “changed how ARC does business,” Briggs says. “It’s taken us to some really good places.”