Spotting icebergs in the Caribbean

Valuable airline consumer metrics are hidden under-water & melting fast

The International Ice Patrol was founded in 1914 to monitor iceberg movements in the Atlantic and Arctic oceans. Every year, swarms of bergs calve off glaciers and drift south before melting away. The Ice Patrol keeps watch to keep shipping lanes safe.

Real icebergs melt before reaching warm Caribbean waters, but airlines in the Caribbean & other desirable tourism regions might note that just as 87% of an iceberg’s mass is underwater, invisible to mariners, their “iceberg” of customer data contains “above-water” metrics measurable using standard analytics, “under-water” metrics requiring new analytics and “melting” metrics which will be lost unless captured in time.

Airlines keeping their heads above water may drown

Standard airline data shows how far in advance tickets are bought, how much people have paid and how both of these vary across cabins and markets. Airlines will typically use around seven years of data to forecast demand suggesting how busy flights will be and adjust this through a year of bookings according to how closely the new year matches the past.

This type of data collection worked well in the past. But in the years following COVID we just do not know which countries, attractions and hotels will be open or where passengers will be coming from. As such it is unlikely that passengers will be booking travel in the same way that they did historically and Caribbean airlines focusing only on these traditional metrics could get into trouble.

Caribbean co-brands are an easy win

For many travellers, coming to the Caribbean is one trip of many and an airline ticket one purchase from the whole trip. Caribbean airlines who learn more about how their passengers travel, including other places they go, other airlines they use, hotels where they stay and experiences they enjoy, will be able to tailor their future offers, boosting the chance that a person will book the airline again or recommend to friends.

Current travel infrastructure is not well suited to generating suitable data and so is “under-water” for many Caribbean airlines today. But airlines with co-branded credit cards, offering loyalty points to reward payments, will generate the data they need. These cards are also marketing that people see every day. Caribbean airlines without a loyalty programme will normally find that their payments provider can set up and operate one for them.

Caribbean travellers speak about their plans every day

Sometimes the demand for Caribbean travel spikes unexpectedly. Perhaps a TV programme in Germany about stingrays will encourage people to see Stingray City at Grand Cayman. Maybe a viral post about parties in Jamaica will encourage students to travel there on spring break.

Unfortunately, by the time such bookings are made Caribbean airlines have lost the opportunity to monetise them effectively – this is why some data can be said to “melt”. The production of social media data that shows how current trends influence demand is an emerging field and Caribbean airlines should work with a specialist in this area. Please contact me if you would like an introduction.

Getting all the above right is not difficult, but does require some effort. Are you ready? Write to tell me how you get on.