Everyone loves to travel. And now, more than ever, this pastime once exclusive to the affluent West is within reach for billions of people. Many of these new travellers are part of the newly minted middle classes of the emerging market countries. With more than one billion people travelling abroad in 2014, domestic and international tourism sectors are quickly evolving to meet the needs and demands of these new consumers, and Australia is looking to capitalize on these trends.

Australia currently spends over $26 billion per year on international tourism, placing it in the top ten countries for international tourism expenditure. With sights set on China and other Asian countries, Australia is hoping to engage new and repeat tourists. Jayne Hrdlicka, CEO of Jetstar Airways, Nicolas Chu (MBA Exec 2012), President of HotelClub, and John O'Sullivan (MBA Exec 2005), Managing Director of Tourism Australia, sat down with Simon Barrett, Senior Partner & Chairman, L.E.K. Consulting Australia to discuss the business of travel and how Australia is tapping into new markets as the travel landscape shifts.

With more Chinese tourists traveling internationally than Germans, the Chinese market is central to any tourism marketer's business plan. And what they want is not clichés and photos in front of the Sydney Opera House. According to O'Sullivan, the Chinese tourist is no longer happy with the traditional landmark tourism experience. Like their Western counterparts they want unique and local experiences when they travel. This move towards immersion, meeting the winemaker not just sipping the wine, is defining large segments of the travel market.

Technology is helping tourists find those unique experiences. As the majority of the travel planning and booking process moves online, accommodation sites like Airbnb connect travellers with homes instead of hotel rooms. Travel focused businesses encourage customers to post on their Facebook pages to produce free user generated content for marketing purposes. Low-cost carriers like Jetstar are not just in the business of flying but providing their customers with end-to-end services wrapped in a user friendly digital platform. And what these technological innovations have led to, aside from increased market participation, is the mass collection of data.

Big Data is allowing countries like Australia to open new markets. Jetstar was able to corner the Bali market early because data from their end-to-end services pointed towards increasing tourism engagement with the tiny Indonesian island. By examining the data collected on the travel routes of their Chinese customers, Jetstar was able to infer service to and from secondary Chinese cities was limited, but that these cities had populations hitting 10 million. According to Hrdlicka, this led Jetstar to examine ways it could partner with these underserved markets, expanding their customer base.

The collection of data has also led travel companies to create detailed composites of their customers. Chu noted that his company generates one terabyte of data per day on its users. The data is tagged and filtered by more than 20 different attributes. HotelClub feeds this information into a predictive model which builds a report on the habits of users. HotelClub then uses this information to drive demand, develop loyalty, and tailor their marketing to the specific interests of their customers.        

These data insights are transforming the business of travel and leading to new marketing strategies. Countries like Australia that recognize the value of the visitor economy and are adapting to the sophisticated needs of the modern traveller are benefiting as new markets come online.

Listen to the Business of Travel podcast for the full story.​​