Throughout our nearly 15 years of hotel Internet marketing experience, we have been consistently concerned about the increasing level of disparity between savvy Internet/Mobile marketers in hospitality and travel, and the Internet/Mobile Marketing-inept players in the industry.With the advent of social media in recent years, Web 2.0 technologies and the mobile Web, this disparity has accelerated dramatically.

On one side there are the extremely Web-savvy:

• Online travel agencies like Expedia, Travelocity, etc.
• Most major hotel brands’ e-commerce departments
• Airlines
• Some e-commerce departments at smaller and mid-size hotel and resort chains
• Some very bright individuals at the marketing departments of full service hotels, resorts and casinos

On the other side there is everybody else, which unfortunately means the majority of hospitality executives and sales and marketing professionals.
HeBS defines “Web Marketing Ineptitude” as the lack of hands-on experience in Internet marketing and all of its formats: website re-designs, SEO optimizations, search marketing, email marketing, strategic linking, banner advertising and online sponsorships, social media and Web 2.0 and more recently, mobile marketing. In addition, this ineptitude also indicates a lack of understanding of best practices and latest trends in the direct online channel.

In the 1990s, it was “normal” that only a few hospitality and travel marketers were proficient in the online channel.  Less than 3% of travel reservations in the U.S. were booked online back in 1999. In the 2000s (in 2001, online travel bookings reached 5.4% of all travel reservations in the U.S.), hospitality marketers and the major hotel brands began to pay closer attention to the Internet channel. In the years that followed, Internet travel adoption increased dramatically and in 2009 alone over 55% of all travel reservations in the U.S. will be online (45% of all hotel reservations) to the tune of a staggering $116.1 billion (eMarketer).

Yet, to our dismay, over the past 15 years the level of Internet marketing expertise in the hospitality industry has not kept up with this remarkable growth. On the contrary, we are witnessing whole new generations of hospitality executives and marketing professionals who are unfamiliar with Internet marketing in general as well as best practices and trends in the direct online channel.

This problem has been exacerbated by a) the social media and Web 2.0 phenomena, and b) mobile marketing. Both of these new marketing and distribution channels introduced an entirely new level of complexity and skill set requirements, as well as new best practices and trends.

• Social Media have changed how customers plan and purchase travel, how customers access information, and how customers perceive the credibility of information. How can hoteliers create/monitor/take advantage of the social media “chatter” around the hotel, target receptive audiences, and ultimately stimulate hotel website visits, interactions and bookings? What type of Web 2.0 and interactive features and functionality do you need on the hotel website?

• Mobile Web is expected to surpass the traditional Web within the next five years. The promise of “immediate, anywhere and anytime” Internet access, instant information and transaction capabilities, location-based services and personalization are some of the key factors for the “explosion” of the mobile Web. Hotel guests–past, current and potential–are increasingly becoming mobile-ready and hoteliers have to respond adequately to this growing demand for mobile services. This is the reason why hoteliers and travel marketers need to have robust mobile Web initiatives in place, including mobile brand websites, mobile apps, m-CRM and mobile marketing.

Why Is There a Growing Web Marketing Ineptitude in the Industry?

There are many reasons for this “Web Marketing Ineptitude” among the ranks, but here are some of the most important:

Franchised Properties:

• Many major brands control all Internet marketing initiatives at the corporate level, including property-level initiatives, thus depriving staff at the property from any meaningful experience in Internet marketing.

• We have seen a trend among small/mid-size chains to establish small but vital e‑commerce departments. In many cases, these companies outsource whatever online marketing they do to outside vendors. Here again, when outsourcing, they make a crucial mistake by not demanding professional development to be part of the Internet marketing vendor’s responsibilities. This results in Internet marketing expertise not being disseminated to the properties in the process.

Independent Hotels and Resorts:

• The biggest concentration of Internet marketing knowledge is at this level.

• Many big full-service hotels and resorts have some form of in-house Internet expertise. However, due to staff turnover and constantly decreasing budgets, these properties tend to have a very spotty Internet expertise retention rate.

• Smaller hotels and resorts are most vulnerable due to limited budgets and difficulties with hiring and retaining employees with expert knowledge.

Destination Marketing Organizations (DMOs) and Convention and Visitor Bureaus (CVBs):

• These organizations boast some of the brightest Internet marketing stars and some of the most inept marketers.

• In many cases among DMOs and CVBs, ignoring Internet marketing best practices is not even a matter of budget size, but a result of inertia and commitment to traditional advertising formats.

• The government or quasi -government nature of CVBs and tourism offices does not help with the hiring and retention of Internet expertise.

So What Is the Verdict?

HeBS believes there are different levels of Web Marketing Ineptitude in the industry regarding three important marketing media: Traditional Web, Social Media/Web 2.0 and Mobile Web. Here are our estimates of the ineptitude rates in each of these media:

Internet Marketing/Traditional Web

• Nearly 15 years of existence of the traditional Web

• Internet Marketing Ineptitude rate in hospitality:  65%

Web 2.0/Social Media Marketing

• Nearly 5 years of existence of social media

• Web 2.0/Social Media Marketing Ineptitude rate in hospitality:  90%

Mobile Marketing/Mobile Web

• Nearly 10 years of existence of Mobile Web but in reality, the Mobile Web in the U.S. exploded with the introduction of the first iPhone in June 2007.

• Mobile Marketing Ineptitude rate in hospitality:  97%

Conclusion

Hoteliers should strive to gain a crystal-clear understanding of what the best practices and latest trends are in hospitality Internet marketing: what works, what doesn’t, and why. Hoteliers should recognize that they do not have all the answers in-house and that there are thought leaders and other proven industry experts who can help them and their property stay competitive in these economic times, preserve and increase market share, and generate the highest website revenues and ROIs.

Hoteliers should take a hard look at how Best Industry Practices are being utilized by their corporate offices or major brands, as well as by the hotel’s Internet marketing vendors. Almost 15 years after the first online hotel booking, best practices have been established in practically every aspect of hotel Internet marketing. Hoteliers should not allow their Internet marketing vendors to “learn the business on the hotel’s dime.”

The prospect of professional development should become the main criterion when choosing an Internet marketing vendor.  Hoteliers should hire experts who are able and willing to teach the hotel and staff best practices and keep the hotel appraised of the latest direct online channel trends.

Hoteliers should work only with Internet marketing experts who can help them acquire new core competencies and adopt best industry practices in the direct online channel. 

They should provide crucial professional development as well as guide the hotel’s direct Internet marketing strategies, online brand building strategies, e-CRM, website re-design and SEO optimization, search and email marketing, social media and mobile marketing initiatives.

Uwishunu.com (You wish you knew…)

Written by forty or so “in-the-know” contributors, this blog presents the contemporary, non-traditional side of Philadelphia. Real Philadelphians reveal their secrets about dining, nightlife, music, culture, fashion, outdoor activities, design, etc. The goal is to enable visitors to experience Philly like a local. Though created and maintained by the Greater Philadelphia Tourism Marketing Corporation, the site is presented as a separate entity. Readers are invited to post feedback and comments about the articles.

The site makes full use of Web 2.0 and social media with blogging, podcasts, online networking, photo and video sharing and RSS feeds. The site’s administrators even use Twitter (a social network and microblogging tool) to promote certain events.

Uwishunu is also home to Illadates, a popular weekly series of video podcasts where two amateur filmmakers take viewers to the best places around town.

This very inspiring site can serve as a model for most destinations and help them create an inexpensive promotional tool that is more effective than many other Web strategies.

Holland.com

The Netherlands Board of Tourism and Conventions recently launched a typical Web 2.0 site targeting the North American market. In addition to providing access to tourist information, the site also invites users to join its virtual community where they can share past trips and publish articles, videos and photos and thereby enable the site to constantly evolve. Using RSS feeds, the site also posts information from other sites like Google News, Yahoo Travel and YouTube.

Like many sites, Holland.com enables users to rate articles and add their comments, thereby highlighting the most relevant ones.

Site content is therefore generated by users, the Board of Tourism and by a few third parties. By using various news items, videos and comments to bring together past and potential visitors, the site has created a credible information source that offers visitors the best experience possible.

And that’s not all: the Board of Tourism has also opened the first national tourism board in Second Life, yet another example of using the virtual world to encourage real-world discussion about its destination. Most importantly, this move has created another opportunity to attract media attention!

VisitMyBaltimore

To enhance the city’s allure, VisitMyBaltimore.com invites Baltimore fans and residents to upload amateur videos highlighting their favourite places, must-see events, and well-kept secrets. To launch the project and encourage locals to publish their videos, the Baltimore Area Convention and Visitor’s Association (BACVA) organized a contest offering the creator of the best video a prize of US$2007. For small businesses, the contest was an excellent opportunity for self-promotion and a chance to win the prize! The site is planning future contests to maintain user interest.

VisitMyBaltimore also had another good idea that has proved very popular: invite celebrities to upload their own videos of the town!

Ifoundmymontreal.com

Montreal has also been busy, launching a blog where visitors, businesses and event organizers can publish their thoughts and comments and promote their site or event. IfoundmyMontreal.com is managed by Tourisme Montréal and aimed primarily at international travellers.

The blog appears as an extension of the Tourism Bureau’s FindyourMontreal.com site, which introduces visitors to Montreal’s festivals, cuisine, eclectic architecture, shopping, nightlife and cultural scene. Information is presented in the form of videos, images and podcasts.

Tourisme Montréal is currently doing a complete overhaul of the city’s official Internet portal, creating a major section for user-generated content (comments, photos, creating and sharing itineraries).

To recap

Web 2.0 destination sites with “insider” content clearly benefit from being seen as new and credible information sources. Whether content comes solely from locals or from a mixture of travel professionals and select contributors, the unofficial character of such sites, combined with their opportunities for user interaction, questions and comments, gives the impression of authenticity and a sense of being able to experience the destination just like a local.

The top tips from our examples:

• Provide a showcase for small businesses who can present themselves in an innovative way
• Involve some celebrities
• Organize a contest to encourage participation
• Attract the attention of the media
• Add content using RSS feeds, simply and freely

In addition to their relevant content, these sites have become popular thanks to significant media coverage. Their innovative, youthful, hip and off-the-beaten path character attracts users and creates a buzz. For locals, they offer an opportunity to introduce one’s favourites and experience 15 minutes of fame.>

Current Website development platforms make it relatively easy to include the functions needed for these new Web 2.0 sites (account creation, file sharing, comments, etc.) and, furthermore, are low-cost. However, be advised: despite the technological simplicity of such sites, their popularity is not guaranteed! Projects must still be well planned, well communicated and well managed. They must also be easily referenced by search engines.

Among other issues, it is difficult to accurately assess the impact of these new interfaces, but they do seem to enjoy good visibility. Also, these sites must strike a delicate balance between true user-generated content and that created by businesses, contributors and the tourism bureau. After all, a site’s very credibility is at stake. And although content is usually monitored, blogs are open to criticism and negative comments.

Is this a trend to monitor, or to try yourself? It is your decision, but once word-of-mouth gets going, you have no idea how far it can take you!

For more information on how customers can influence others, see:
- Today’s customers influence tomorrow’s choices

Sources:
- Sauer, Abram. “Uwishunu,” [www.BrandChannel.com], June 25, 2007.
- [www.uwishunu.com]
- [www.findyourmontreal.com]
- [www.ifoundmymontreal.com]
- [http://us.holland.com/]
- [www.visitmybaltimore.com]

Growth. In the past few decades, the commercial adventure tourism sector has continued to grow. Many cash-rich, time-poor, reasonably fit people now treat adventure activities as purchasable short-term holiday packages, rather than as lifetime personal investments in skills and equipment. This has led to expansion at both the low-skill and high-skill end of the adventure sector.

Product price pyramid. The adventure tourism industry includes a small number of very highly priced products which rely on specialized equipment, take place in remote areas, or require considerable prior skills, and a large number of short, low-priced, unskilled products in accessible areas close to major tourist gateways.

More luxury. The level of luxury available in adventure tours continues to increase. Backpacker buses are more comfortable. Wildlife heliski and diving lodges have spas and massage therapists. Dive boats, surfboats and heliski operations offer private charters with especially luxurious facilities. Expedition cruise boats have suites with satellite phones, and sometimes even a helicopter. It has almost become a truism that successful adventure tour operators continue to move up-market.

Adventure destinations. The number of tourist destinations marketing themselves specifically as adventure destinations, often using the term adventure capital, has increased greatly in recent years. Some of these are long-standing tourist destinations that have added new products or changed their marketing strategies. Others are small-scale destinations seeking to develop tourism through a portfolio of adventure products. Some also use adventure events as destination marketing tools. Adventure events are growing rapidly in number, scale and variety.

Amenity migration. In some areas, outdoor recreation opportunities and, to a lesser extent, commercial adventure tourism, have triggered amenity migration. This in turn has led to an increase in adventure tourism as the amenity migrants seek commercial opportunities to maintain their lifestyles.

Retail packaging. Many tour operators offer a portfolio of products at different destinations. They do not necessarily maintain an operational base at each of the destinations concerned. Most are retail packagers which sell a range of local tour products to an international clientele. There are also specialist tour operators which offer similar products or activities at multiple destinations.

Combination products. It has become commonplace for individual tour operators to offer a range of different adventure activities at a single destination. These are often packaged as a discounted bundle of individual tours, marketed as a “combo” product. Some combo products simply involve syndicated marketing, with on-ground activities operated by separate companies. Alternatively, a single company either buys up local competitors offering other activities, or acquires equipment, staff and permits to conduct similar activities itself.

Cross marketing. There is a strong trend towards increased cross-marketing links between adventure tourism products and other products purchased by the same consumers. These links are made through magazines, mailouts, inserts, Internet websites, television, films, fashion, shops and merchandising, mobile phones and music players, and entertainment venues such as nightclubs.

Exploratories. Many top-end adventure tourism companies now offer “exploratories” as well as routine tours. These are not necessarily first ascents, descents or traverses, but they are generally new itineraries, for that operator at least. The term is used both as a marketing device, to advertise adventure, and as a legal disclaimer, to warn clients that the trip may not necessarily run smoothly or according to plan.

Flexible itineraries. Other tour companies also make a virtue of necessity by advertising that their schedules or itineraries are flexible and that this is part of the adventure. This approach is used at both ends of the economic scale, from overland buses to polar expedition cruises.

Copycats and takeovers. Establishing a new adventure tourism product requires considerable investment in product development and marketing. Once a product has become well-known, other entrepreneurs often attempt to take over the operation, or establish copycat products at undercut prices. This is a particular risk for new products in developing countries. A number of examples are now well documented.

Insurance. Because of litigation, especially in North America, adventure tourism providers have become increasingly concerned over issues of potential liability. This has led to increasingly lengthy and complex pre-trip waivers and disclaimers, as well as much-increased insurance premiums. For some activities in some countries, it has simply driven many former providers out of the market. With reduced competition, remaining operators have increased prices so as to cover increased insurance costs. Liability-capping legislation, either general as in New Zealand or activity-specific as in some US states, is increasingly important for the future of the industry.

Source:

Buckley, R. (2006) Adventure Tourism, CABI, Oxford, [www.cabi.org].

There’s “geo-info”…

Although it is crucial for companies in the tourism industry to know their markets and clientele, many of them view compiling lists of client postal codes as an onerous task.`

It is, however, well worth the effort since grouping clients geographically enables companies to pinpoint their current markets. Knowing the regions and municipalities their clients come from enables marketing executives to more effectively target their advertising messages. While this time-honoured practice provides companies with information about their current client base, it does not allow them to identify and penetrate new markets – the primary basis for growth.

… and then there’s geomarketing!

Briefly, geomarketing is a marketing concept that uses geographical data to analyze consumer behaviour and expectations. The value-added factor derives from the application of location-based information, combined with segmentation.

By examining demographic, economic and sociological data through the filter of the environment in which client segments live, geomarketing enables tourism companies to make new connections between geography-based market data and client segmentation based on consumer habits.

Birds of a feather…

One of the principles of geomarketing is that people with similar tastes, values and behaviour will tend to congregate. It therefore follows that, once the company has compiled information on its customers’ lifestyle types, it can use geomarketing to identify the neighbourhoods where this type of clientele represents a significant percentage of the population.

Consumer segmentation systems by lifestyle types

The current popularity of this marketing approach has led a number of research firms to develop consumer segmentation systems by lifestyle types. Some of the more well-known ones are:

• PRIZM CE from the Canadian company Environics Analytics, based on the PRIZM system developed by American company Claritas. This system classifies Canadians into one of 66 groups (www.environicsanalytics.ca);
• PSYTE@ADVANTAGE, by Mapinfo Corporation and Compusearch Canada, divides the Canadian population into 65 different lifestyle segments (www.mapinfo.com);
• FOCUS, by Quebec’s Optima Marketing, has a different approach; it divides the population along provincial and territorial lines, with 20 segments in Quebec alone (www.optimarketing.com).

Each of these companies has drawn on information from a variety of sources, such as Statistics Canada or the Print Measurement Bureau (PMB), in order to develop client segmentation systems that take into account demographic, economic and consumer data.

What can it do for you?

If your company or organization wants to try this approach, read on for a basic introduction to geomarketing:

Step 1: Find out where your clientele comes from:

• Determine which segment(s) of your clientele you want to target by this approach (pleasure or business, summer or winter, etc.). This classification usually focuses on a number of factors: reason and frequency of visits, choice of activities, services used, average spending, etc.
• Use postal codes to determine where the clients in each of the segments come from. Choose a research firm to create a map that represents this information visually.
• Identify the areas (regions, cities or neighbourhoods) with a high concentration of your clients. Note absolute values as well as penetration rate (percentage of clients in terms of total population).
• This will help you pinpoint your “success areas”, i.e., those areas where your company’s clientele comes from.

Step 2: Next, identify the client lifestyle types originating in each of these success areas:

• Find a company that specializes in geomarketing and choose a segmentation system that identifies lifestyle types by residential area.
• Have the geomarketing specialist help you analyze each of your chosen geographical areas and identify the lifestyle types that represent the highest percentage of area residents.
• Compare these sociodemographic descriptions (habits, interests, consumer profile) with the characteristics displayed by your clients on-site, in order to identify the lifestyle type(s) that correspond to these clientele segments.
• This will enable you to identify the lifestyle types of your clientele – or, at least, that segment of your clientele targetted by this process.

Step 3: Find new areas where clients from the same lifestyle segment are likely to live:

• Have the geomarketing specialist help you draw up a list of places where much of the population has a lifestyle profile similar to the one displayed by your current clientele.
• You will obtain a list of areas (regions, cities or neighbourhoods) in which the residents are more likely to be interested in your product or service since they have the same lifestyle profile as your current clientele.

If your company plans to follow up by implementing a marketing plan, geomarketing tools can also generate the kind of information that will maximize your campaign’s effectiveness. For example:

• Identifying the postal codes of high-potential areas means you can pinpoint the best strategies to use for mass-mailings or newspaper inserts;
• Combining a specific aspect of a consumer profile (such as interest in a certain activity) with a list of pre-selected postal codes enables you to purchase or rent address lists for a targetted mailing;
• Identifying the reading habits (newspapers, magazines, etc.) of your selected profiles enables you to maximize the effectiveness of your media advertising budget;
• Identifying purchasing habits not related to travel and tourism also paves the way for the creation of non-traditional business alliances and partnerships.

Make your client database work for you

The more varied and specific kinds of information you have about your clients, the more marketing opportunities you have at your disposal. Since it is increasingly becoming both impossible and unprofitable for companies to try and reach every customer out there, it is high time they focussed on currently available client data. Geomarketing could be an interesting way for some of these companies to put that data to use.

Sources:
- Institut d’analyse géographique (ISG). Qu’est ce que geomarketing?, [www.iag.asso.fr] www.iag.asso.fr/questions/geomarketing.htm.
- Latour, Philippe. Geomarketing, vite!… mais pas trop, [www.visionarymarketing.com] visionarymarketing.com/articles/geomarketing.html.
- Niot, Carine. Géomarketing: un nouvel outil au service des entreprises, Indexel [www.indexel.net], January 3, 2002. www.indexel.net/doc.jsp?id=1341.

A limited, regional role

As a general rule, smaller airports are confined to playing a limited role, overshadowed by the hub used by major carriers. The connections offered are often provided by small aircraft and quasi-monopolistic situations lead to particularly high prices. This type of situation is certainly not unique to Québec.

Secondary airports are usually public entities owned by municipal or governmental authorities. Under-utilized, most of them operate at a loss and require subsidies to keep afloat. A monopolistic environment, as we experienced here with Air Canada, can create an unusual situation of minimal competition between airports and a lack of incentive for airports to reduce costs and improve efficiency. The result is that these airports have virtually nonexistent marketing practices, limited primarily to passive approaches such as publishing an airline timetable.

A changing environment

According to Nigel Halpern, airport marketing is evolving rapidly to adapt to a new business environment characterized by changes in travel behaviour and structural changes in the airline industry. In Northern Europe, several airports have embraced these new business realities and adopted more market-driven management practices. Competition is now global, both for all-inclusive packages and independent travellers. Furthermore, in several regions, the presence of low-cost or discount carriers is making the market extremely dynamic.

In an increasingly open business environment, airport managers have to deal with often unpredictable airline decisions that are increasingly based upon market forces. Airports wishing to strengthen their position as a tourist destination must adapt their management practices accordingly and become much more pro-active in their approach to marketing.

More and more airports, like Oslo’s Gardermoen Airport, for example, are using advertising campaigns to target specific markets (see photo). However, due to the high cost, such initiatives are usually available only to larger airports or, at the very least, to airports that have developed joint campaigns with other partners. Some groups also make a point of attending tourism trade shows to stimulate the development of new markets.

A clientele that now includes more than just airlines

Airports are increasingly called upon to offer services directly to tourists, notably by providing travel planning tools such as online timetables and links to online agencies. Surprisingly, only 10% of the world’s airports provide timetables on their websites. The service provided by Highlands and Islands Airports Limited is an interesting example because the website offers advanced search options (see photo. In comparison, the Aéroports de Montréal website only posts information on the day’s flights.

Working to develop business

Airports can use a number of practices to take advantage of market trends and meet the needs of their clientele, the airlines. To successfully compete and attract new destinations, airports must become aware of the incentives that can enhance their market position.

If an airport wants to attract new business, key factors are the rates charged and the existence of promotional campaigns developed with strategic partners. For example, carriers who select Cork Airport in Ireland for a new scheduled route benefit from substantial savings on airport charges. The five-year business model offers the following incentives:

• 100% discount for the first year
• 80% for the second year
• 60% for the third year
• 40% for the fourth
• 20% for the fifth

The strategy appears to have worked because traffic at the Cork Airport nearly tripled in the 10 years from 1994 and 2003. This is all the more impressive considering Cork essentially shares its market with Shannon Airport, the Irish hub of low-cost carrier Ryanair. Competition between the two airports is limited, however, by the fact that both are owned by Aer Rianta. In fact, since 2005, Cork Airport has employed a different incentive program, based instead on fare reductions per passenger.

Obviously, a carrier could terminate a new route once the lease has expired. But with financial incentives, airlines can take a risk on a connection that is more of a gamble. And a five-year time frame is usually long enough to generate a sufficient client pool to ensure profitability. The first few years following the introduction of a new route is when a carrier truly needs support from the airport.

Another interesting development is the World Route Development Forum called “Routes”. This annual event facilitates meetings between airports and air service providers and encourages airports to pursue new options. A type of “speed dating”, Routes provides airports with multiple opportunities to forge new business relations with various tourism industry stakeholders.

Avenues for specialization

Airports wishing to target the tourist market can choose to specialize and focus primarily on the following areas:

• Costs (e.g. by operating a very simple terminal and offering a minimum of services)
• Flexibility (e.g. by employing a multi-skilled workforce and outsourcing handling)
• Speed (e.g. by offering fast turnarounds and advantageous positioning for aircraft)
• Access (e.g. by offering longer opening hours and emphasizing its proximity to the destination)
• Infrastructure (e.g. by having a longer runway and enhanced terminal capacity)

Airports wishing to grow their market are, nevertheless, dependent upon demand. Marketing efforts cannot, in themselves, guarantee success. However, airports can certainly benefit from gathering market intelligence and collaborating closely with local tourism stakeholders and regional development agencies.

See also

Highlands and Islands Airports Limited 
World Route Development Forum

> The cruise industry will experience explosive growth.

> An older, better-educated population in Europe and North America will increasingly seek ecotourism and cultural travel products.

> “Slow cities” and “slow food” trends will expand from Italy to much of Europe.

> London, New York, Sydney and Dubai will be the leading tourism poles through the end of the decade.

> Non-residents will pay significantly higher entry fees to tourist attractions than those paid by locals (Venice, Petra, Bath, etc.).

> Tourism Satellite Accounting will be adopted by several developing countries but ignored by the U.S., China, Japan, Russia and most Western European countries.

> Prayer rooms and compasses will be installed on most passenger aircraft serving the Islamic world.

> Antarctica will become an ecotourism tourism destination complete with hotels, restaurants and full-service tours.

> Shopping, from mega-malls to folk craft centers, will increasingly become a critical feature for tourism destinations.

> Rides on private spacecraft will become a recreational outing for the wealthy.

> Mega-resorts (Las Vegas, Orlando, Sun City, etc.) will do what no one thought possible: get bigger.

> Cruise ships will sell condominiums, becoming ocean-going resorts.

> In spite of organized international efforts to fight them, sex and drug-focused tourism will flourish.

> Airlines, travel agents and tour operators will ally themselves with financial institutions to offer consumer travel loans.

> Western tourists will shun countries with immense tourism potential but “rogue” leaders (Zimbabwe, Libya, Iran, North Korea, etc.).

> MGM Mirage will beat out rivals Hilton, Harrah’s and Bally’s to become the undisputed leader of the casino industry.

> National economies in Cuba, Egypt, Spain and Thailand will become dangerously dependent on tourism.

> “Rave” tourists will travel further abroad in search of the perfect party (BringItOn! Travel, Like Hiptrips, Experienceibiza, etc.).

> Enormous infrastructure projects will significantly expand automobile-accessible tourism options (Channel Tunnel car lane, Bahrain-Qatar causeway, etc.).

> China will be the first country to receive 100 million international arrivals in a 12-month period, sometime around 2018 - France will follow within 2-3 years.

Product & Service Trends

> Hotel rooms, increasingly equipped as offices with full-size desks, computers and advanced communications technologies, will minimize the need for business centers.

> Expansion of Europe’s high-speed train network will eliminate short haul flights.
 
> Hotel meeting and dining areas will be designed less formally in an attempt to attract the casual business traveler.

> Small super-luxury boutique inns will take market share from Four Seasons, Ritz Carlton and Fairmont.

> Hub airports will install capsule-cocoon hotels in terminal facilities.

> Hotel and restaurant facilities will be designed for an aging population with lower rise steps, more handrails and wider doors.

> Travel guidebooks will become highly specialized and more frequently consulted - primarily on the web.

> The distinction between business and leisure hotels will erode as business clients seek fitness and entertainment activities and vacation guests demand advanced telecommunications IT.

> “100% Satisfaction Guaranteed” will replace “Let the Buyer Beware”.

> Growth in demand for home food delivery will outpace all other food service segments.

> An aging population and growing infatuation with healthful living will bring a wave of European holistic spas and  ‘health-tels’ to North America and Asia.

> A new wave of budget conference & exhibition hotels will be built to meet the convention needs of cost conscious companies.

> European and Japanese new-build hotels will be obliged to design larger guest rooms closer to North American standards.

> Restaurant groups will operate F&B outlets wherever people gather (Laundromat bars, espresso counters at service stations, etc.).

> Center-city urban resorts will challenge sun, sand & sea vacation villages in the leisure market.

> Credit card check-in/check-out, F&B vending machines, self-cleaning bathrooms and self-serve laundries will eliminate most human contact in budget hotels.

> Luxury resorts that once shunned children will welcome them with an expanded array of activities and tailored dining options.

Investment & Finance

> Hotel real estate assets will be increasingly concentrated in the portfolios of fewer investors, particularly private equity funds.

> Intense competition for hotel operating contracts will push management fees as low as 1% of gross, 5% of IBFC and $4 per reservation.
 
> Airlines will continue to rack up significant losses as they struggle to deal with high fuel costs, new security requirements, an onslaught of no-frills carriers and brutal competition from ‘open skies’ agreements.

> Following the big American sell off of the 1980s and 1990s, hotel companies will be repatriated to the U.S. (Westin, Ramada, Renaissance, etc.).

> Airline alliances of the 20th century will evolve into acquisitions as weaker players struggle to survive (Air France-KLM, American-TWA, etc.).

> By the end of the decade, a score of management companies will control the world inventory of branded hotel rooms.

> Hotel feasibility studies will become an unprofitable commodity for hospitality consulting firms.

> Hotel operating companies will sell their remaining equity in real estate to free up capital for expansion of management contracts.

> Per room hotel acquisitions in Europe will reach stratospheric new records (i.e. Savoy Group).

> Franchising will experience explosive growth as hotel companies strategically reposition to get out of the hotel business and into the business of hotels (i.e. Radisson, Choice, Cendant, Holiday Inn, etc.).

> Fewer new-build hotels in Europe and North America, more existing property renovations.

Human Resources

> Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers.

> The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery - to the contrary, it will gain importance.

> Unionized hotel and restaurant workforces will trade scheduling and task flexibility for job security and quality-of-life benefits.

> Tourism and hotel management schools will move out of the classroom and out of the library, onto the web and into the field.

> Powerful unions, a shorter workweek and reluctance to taper social benefits will maintain Europe’s standing as the world’s most expensive tourism destination.

> Middle Eastern countries enforcing employment quotas for nationals will experience reduced productivity and higher labor costs.

> Airline employees will accept significant wage and benefit cuts to prevent their employers from going bankrupt.

Marketing

> The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries.

> Understanding customers as people - their likes, dislikes, habits, interests and hobbies - will become critical to establishing competitive advantage in hospitality marketing.

> Customer retention will replace customer acquisition as travel agencies’ strategic objective.

> Homogenization of airline services will render them commodities while lodging products will continue to focus on differentiation.

> Data warehousing and data mining will provide one-to-one and relationship-marketing opportunities never imagined.

> Print media advertising will move onto the Web.

> Increasingly value-conscious customers will demand more and better product information.

> Consumers will increasingly expect to negotiate hotel and airline rates.

> Cross-sector strategic alliances between food service, lodging, travel and entertainment companies will prove to be effective marketing formats.

> Better understanding of psychographic consumer behavior will lead to more precise identification of customer segments and sub-segments.

> As marketers increasingly distinguish between loyalty and satisfaction, frequent use programs will become more elaborate.

> Hotel revenue management systems will become more sophisticated and be relocated from the reservations department to sales & marketing.

> Revenue management tactics will be applied to pricing in restaurants, amusement parks, golf courses, tour buses, cinemas, convention centers and sports stadiums.

> Hotel companies’ PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency.

> Market share and product profitability will be replaced by customer share and customer profitability as measures of marketing effectiveness in the hotel industry.

Safety & Security

> Consumers will systematically consult travel health sites before checking ticket or room availability.

> Security concerns in the Holy Land encourage religious tourists to make pilgrimages to sites in Ethiopia, Cuba, Greece, Italy and Morocco.

> Crime and terrorism will render some traditional tourist destinations unsellable.

> Customer credit cards will replace coded key cards in most hotels.

> Guest room safes will be enlarged to accommodate standard laptop computers.

> International hotel companies will refuse management contracts and franchises for hotels without in-room sprinkler systems.

> Terrorism fears will keep Israel, Indonesia, Iraq and India off the mainstream tourist circuit for the foreseeable future.

> Advanced encryption technology will make on-line payment genuinely secure.

Financial Management & Cost Control

> Zero-based budgeting will become the industry norm.

> GOPAR will replace RevPAR as the standard measure of hotel sales profitability.

> Speech recognition technology will lower staffing levels and operating costs in CRS call centers.

> To improve energy and water conservation, hotels will install usage meters and levy charges for consumption.

> Deregulation of the global telecommunications market will benefit the hospitality industry more than the deregulation of the airline markets.

> As hotel reservations made through global distribution systems diminish, GDS will exploit communications advances to reduce fees and costs.

> While hotel and café guests will increasingly expect wireless Internet access, other factors will encourage hospitality operators to invest in it - serving as a platform for mobile point-of-sales, reducing cable costs and more efficient restaurant table auditing.

Tourism Control Intelligence
E-mail: Nowlis@aol.com

• The cruise industry will experience explosive growth.
• An older, better-educated population in Europe and North America will increasingly seek ecotourism and cultural travel products.
• “Slow cities” and “slow food” trends will expand from Italy to much of Europe > London, New York, Sydney and Dubai will be the leading tourism poles through the end of the decade.
• Non-residents will pay significantly higher entry fees to tourist attractions than those paid by locals (Venice, Petra, Bath, etc.).
• Tourism Satellite Accounting will be adopted by several developing countries but ignored by the U.S., China, Japan, Russia and most Western European countries.
• Prayer rooms and compasses will be installed on most passenger aircraft serving the Islamic world.
• Antarctica will become an ecotourism tourism destination complete with hotels, restaurants and full-service tours.
• Shopping, from mega-malls to folk craft centers, will increasingly become a critical feature for tourism destinations.
• Rides on private spacecraft will become a recreational outing for the wealthy.
• Mega-resorts (Las Vegas, Orlando, Sun City, etc.) will do what no one thought possible: get bigger.
• Cruise ships will sell condominiums, becoming ocean-going resorts.
• In spite of organized international efforts to fight them, sex and drug-focused tourism will flourish.
• Airlines, travel agents and tour operators will ally themselves with financial institutions to offer consumer travel loans.
• Western tourists will shun countries with immense tourism potential but “rogue” leaders (Zimbabwe, Libya, Iran, North Korea, etc.).
• MGM Mirage will beat out rivals Hilton, Harrah’s and Bally’s to become the undisputed leader of the casino industry.
• National economies in Cuba, Egypt, Spain and Thailand will become dangerously dependent on tourism.
• “Rave” tourists will travel further abroad in search of the perfect party (BringItOn! Travel, Like Hiptrips, Experienceibiza, etc.).
• Enormous infrastructure projects will significantly expand automobile-accessible tourism options (Channel Tunnel car lane, Bahrain-Qatar causeway, etc.).
• China will be the first country to receive 100 million international arrivals in a 12-month period, sometime around 2018 – France will follow within 2-3 years.

Product & Service Trends

• Hotel rooms, increasingly equipped as offices with full-size desks, computers and advanced communications technologies, will minimize the need for business centers.
• Expansion of Europe’s high-speed train network will eliminate short haul flights.
• Hotel meeting and dining areas will be designed less formally in an attempt to attract the casual business traveler.
• Small super-luxury boutique inns will take market share from Four Seasons, Ritz Carlton and Fairmont.
• Hub airports will install capsule-cocoon hotels in terminal facilities.
• Hotel and restaurant facilities will be designed for an aging population with lower rise steps, more handrails and wider doors.
• Travel guidebooks will become highly specialized and more frequently consulted – primarily on the web.
• The distinction between business and leisure hotels will erode as business clients seek fitness and entertainment activities and vacation guests demand advanced telecommunications IT.
• “100% Satisfaction Guaranteed” will replace “Let the Buyer Beware”.
• Growth in demand for home food delivery will outpace all other food service segments.
• An aging population and growing infatuation with healthful living will bring a wave of European holistic spas and ‘health-tels’ to North America and Asia.
• A new wave of budget conference & exhibition hotels will be built to meet the convention needs of cost conscious companies.
• European and Japanese new-build hotels will be obliged to design larger guest rooms closer to North American standards.
• Restaurant groups will operate F&B outlets wherever people gather (Laundromat bars, espresso counters at service stations, etc.).
• Center-city urban resorts will challenge sun, sand & sea vacation villages in the leisure market.
• Credit card check-in/check-out, F&B vending machines, self-cleaning bathrooms and self-serve laundries will eliminate most human contact in budget hotels.
• Luxury resorts that once shunned children will welcome them with an expanded array of activities and tailored dining options.

Investment & Finance

• Hotel real estate assets will be increasingly concentrated in the portfolios of fewer investors, particularly private equity funds.
• Intense competition for hotel operating contracts will push management fees as low as 1% of gross, 5% of IBFC and $4 per reservation.
• Airlines will continue to rack up significant losses as they struggle to deal with high fuel costs, new security requirements, an onslaught of no-frills carriers and brutal competition from ‘open skies’ agreements.
• Following the big American sell off of the 1980s and 1990s, hotel companies will be repatriated to the U.S. (Westin, Ramada, Renaissance, etc.).
• Airline alliances of the 20th century will evolve into acquisitions as weaker players struggle to survive (Air France-KLM, American-TWA, etc.).
• By the end of the decade, a score of management companies will control the world inventory of branded hotel rooms.
• Hotel feasibility studies will become an unprofitable commodity for hospitality consulting firms.
• Hotel operating companies will sell their remaining equity in real estate to free up capital for expansion of management contracts.
• Per room hotel acquisitions in Europe will reach stratospheric new records (i.e. Savoy Group).
• Franchising will experience explosive growth as hotel companies strategically reposition to get out of the hotel business and into the business of hotels (i.e. Radisson, Choice, Cendant, Holiday Inn, etc.).
• Fewer new-build hotels in Europe and North America, more existing property renovations.

Human Resources

• Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers.
• The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery – to the contrary, it will gain importance.
• Unionized hotel and restaurant workforces will trade scheduling and task flexibility for job security and quality-of-life benefits.
• Tourism and hotel management schools will move out of the classroom and out of the library, onto the web and into the field.
• Powerful unions, a shorter workweek and reluctance to taper social benefits will maintain Europe’s standing as the world’s most expensive tourism destination.
• Middle Eastern countries enforcing employment quotas for nationals will experience reduced productivity and higher labor costs.Airline employees will accept significant wage and benefit cuts to prevent their employers from going bankrupt.

Marketing

• The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries.
• Understanding customers as people – their likes, dislikes, habits, interests and hobbies – will become critical to establishing competitive advantage in hospitality marketing.
• Customer retention will replace customer acquisition as travel agencies’ strategic objective.
• Homogenization of airline services will render them commodities while lodging products will continue to focus on differentiation.
• Data warehousing and data mining will provide one-to-one and relationship-marketing opportunities never imagined.Print media advertising will move onto the Web.
• Increasingly value-conscious customers will demand more and better product information.
• Consumers will increasingly expect to negotiate hotel and airline rates.
• Cross-sector strategic alliances between food service, lodging, travel and entertainment companies will prove to be effective marketing formats.
• Better understanding of psychographic consumer behavior will lead to more precise identification of customer segments and sub-segments.
• As marketers increasingly distinguish between loyalty and satisfaction, frequent use programs will become more elaborate.
• Hotel revenue management systems will become more sophisticated and be relocated from the reservations department to sales & marketing.
• Revenue management tactics will be applied to pricing in restaurants, amusement parks, golf courses, tour buses, cinemas, convention centers and sports stadiums.
• Hotel companies’ PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency.Market share and product profitability will be replaced by customer share and customer profitability as measures of marketing effectiveness in the hotel industry.

Safety & Security

• Consumers will systematically consult travel health sites before checking ticket or room availability.
• Security concerns in the Holy Land encourage religious tourists to make pilgrimages to sites in Ethiopia, Cuba, Greece, Italy and Morocco.
• Crime and terrorism will render some traditional tourist destinations unsellable.
• Customer credit cards will replace coded key cards in most hotels.
• Guest room safes will be enlarged to accommodate standard laptop computers.
• International hotel companies will refuse management contracts and franchises for hotels without in-room sprinkler systems.
• Terrorism fears will keep Israel, Indonesia, Iraq and India off the mainstream tourist circuit for the foreseeable future.
• Advanced encryption technology will make on-line payment genuinely secure.

Financial Management & Cost Control

• Zero-based budgeting will become the industry norm.
• GOPAR will replace RevPAR as the standard measure of hotel sales profitability.
• Speech recognition technology will lower staffing levels and operating costs in CRS call centers.
• To improve energy and water conservation, hotels will install usage meters and levy charges for consumption.
• Deregulation of the global telecommunications market will benefit the hospitality industry more than the deregulation of the airline markets.
• As hotel reservations made through global distribution systems diminish, GDS will exploit communications advances to reduce fees and costs.
• While hotel and café guests will increasingly expect wireless Internet access, other factors will encourage hospitality operators to invest in it – serving as a platform for mobile point-of-sales, reducing cable costs and more efficient restaurant table auditing.

Tourism Control Intelligence
E-mail: Nowlis@aol.com

A thousand and one reasons to cut prices

It is only normal that customers want to get the most for the least amount of money. There are many reasons to cut prices:

• promotions to publicize a new product;
• deals to attract new customers;
• lower prices to beat the competition ;
• special group rates;
• “early-bird” specials;
• last-minute prices to liquidate stock;
• off-season prices;
• guaranteed best rates to lure reservations away from middlemen.

And yet, at the end of the day, such measures cut into the profit margin.

The low-cost concept is in no way synonymous with cheap

Working from the idea that people are looking for low prices, a number of businesses have successfully questioned their traditional ways of doing things and found ways to cut costs and still offer a quality product. In fact, the term low cost (which is often poorly translated into French as “bas prix” or low price) simply means that – since operating costs are lower – one can ultimately offer lower prices. Of course, the calculations are very different for Air Canada from what they are for WestJet when it comes to a $99 Montreal-Toronto flight. Since these two companies do not have the same cost structure, one operates such a flight at a loss, while the other can make a profit. For WestJet, the price is in line with its operating costs, while for Air Canada, it is simply a strategy to boost sales or keep up with the competition.

An increasingly popular business model

The avant-garde, low-cost concept was first adopted by Southwest Airlines in the United States back in 1978. Although it has taken time to catch on, the low-cost concept and the carriers using it are causing a lot of turbulence in the airline industry. WestJet was the first to adopt the concept in Canada and it has been followed by JetsGo, Canjet and Air Canada’s Zip and Tango services.

Even airports are investing in the market. Marseille, Beauvais, Geneva and, most recently, Singapore have all announced plans to open low-cost terminals expressly for these carriers. Could Montréal’s suburban Saint-Hubert Airport be far behind?

To counter stiff competition from low-cost carriers, France’s national rail company (SNCF) has also decided to explore the concept. It has launched a low-cost version of its TGV high-speed rail service, combined with an innovative array of special services. Basically, the rail company is offering exclusive online-booking and “early-bird” rates, considering partnerships to enable customers to design their own products, and is testing a process whereby all tickets are checked upon boarding, rather than on the train.

In France, the Formule 1 hotel chain has revolutionized the economy hotel industry. The concept was developed in the 1980s after a study showed many travellers found hotel rooms too expensive. The entire hotel “production line” was closely scrutinized to reduce capital and operating costs. This type of hotel meets customers’ primary expectations: cleanliness, comfort and low-cost.

Low-cost cruises are now on the horizon. Already the owner of easyJet (a low-cost carrier), easyGroup will soon launch easyCruise. Some are criticizing the idea, saying that easyCruise is more about ocean transport and ferry service than an actual cruise. As opposed to the usual cruise concept based on luxury and attentive service, easyCruise will follow the example of the airlines with a reduced crew, simplified pay-per-use services and, above all, low prices.

Even destinations (Cuba, Tunisia and Turkey) are targeting the low-cost market. At the opposite end of the spectrum, destinations like Monaco, Île Maurice and Deauville wish to maintain their image as playgrounds of the elite.

To each his own, but make sure you are clear

Many successful businesses have proven the merit of the low-cost business model. When a company’s prime objective is to offer a low-priced product, it is important to communicate this clearly and ensure the customer understands what this implies in terms of quality, service and price.

The strength of those who develop new concepts lies in their ability to discern opportunities and take advantage of what the environment offers. Although this is easy enough to say, one must truly have a visionary streak to venture off the beaten path.

Source: Les Cahiers Espaces. “Stratégies de petits prix,” Vol. 79, November 2003.