Alternative data: think outside the box
Alternative data refers to data compiled from various non-traditional data sources such as global location-based cell phone data. For airports, this means using destination-based visitation data—how many people are visiting a given destination, how long they are staying, how they are getting there, how likely they are to return, etc. This is in contrast to traditional sources of data, which are generally airline-reported.
The real question is, how can we turn this alternative data into realized benefits for an airport? With the right tools and strategy, an airport can leverage alternative data into enduring cost savings and sustainable growth. While serving as Director of Air Service & Business Development for Myrtle Beach International Airport (MYR), I applied this strategy with some great results. I’m confident the same strategy can be used at airports nationwide.
Case Study: Myrtle Beach International Airport (MYR)
MYR serves one of the most popular vacation destinations in the US: Myrtle Beach, SC. Myrtle Beach has a permanent population of 465,000 people, and relies heavily on the tourism industry to keep its community thriving. In 2018, the destination attracted over 20 million visitors.
Because of this dependence on tourism, nonstop air service is essential to the success of the market. However, until early 2013, airlines generally viewed the market as hyper-seasonal, focusing on summer only. This was mainly due to limited origin and destination data.
Prior to 2013, MYR’s average annual seat capacity growth rate was negative, and service levels were in a constant state of flux. To address this, I and my team created and implemented a new air service development strategy, taking into account MYR’s specific markets and needs.
The strategy focused on quantifying true demand for the market using alternative data. We used precise GPS location data to track the movement and length of stay for all people visiting the market from locations throughout the US and around the world—regardless of mode of transportation.
This data then allowed us to pinpoint market-specific air service development opportunities, along with seasonality trends down to the day. By tracking length of stay using days of arrival and departure, we helped airlines identify new routes and extend their seasonal schedules beyond the traditional summer peaks. This alternate data and the resulting air service demand index is now the main consideration of MYR’s air service business cases.
Because of this approach, the number of airlines operating at the airport increased by nearly 40 percent, the number of nonstop markets rose by more than 110 percent, and seat capacity grew nearly 80 percent. Today, eight airlines serve MYR, providing access to almost 50 markets. The airport experienced record passenger counts.
In addition to the incredible growth, this approach to air service development has resulted in five prestigious Routes Americas awards for the airport, and MYR was also shortlisted for the World Routes Awards twice.
MYR’s success here is a prime example of what can be accomplished if you apply new, innovative solutions in unexpected ways. Our team is committed to creating and implementing innovative solutions that help airports elevate the communities they serve.
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