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A Tour Operator Perspective On Destination Strategies
To Maximize Mutual Benefits
Jürgen BACHMANN
UNWTO Seminar, Moscow
March 14th, 2011
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Contents
• Perspective on … Market changes
• A Tour Operator…
• Perspective on… Destination strategies
• Mutual benefits
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A Tour Operator …
• Producing value
– Research, procurement , marketing, operations
– Source market: consumers
– Destinations: stakeholders
• Close links to destinations
– Partner: strenght & weakness, opportunities & threats
– Projects: development, risc taking, investment
– People: contact & knowledge, private & public
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Our Strategic Imperative
• Establish its proper place in the world, and as a result, its long term sustainable future in the context of a low carbon society
• Where that place in society is defined
– first by what the industry brings to the destination communities who receive tourists
– and then by the benefits for those who visit.
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• Consumer
• Industry
• External
Perspective on… Market changes
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• What ?
– Added value
• Real services & standardised quality
– Convenience
• Facilitation of buying decision based on previous (travel) experiences and/or a personal propensity to « low involvement »
– Security
• Convincing solutions for perceived travel risks
– Flexibility
• Get coherent with the imperatives of « modern » life
The consumer:
Mature, demanding and «zapping» (1/3)
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• When ? – Last-Minute: late booking became a common consumer
pattern • « Bargaining attitude » versus « limitation of planning horizons »
• How ? – Level of information: Very well !
• Real market transparency via Internet & social media
– Channel of information: Multiple, without structuring hierarchy • But: how to avoid that customers get lost, mislead or frauded ?
• How much ? – Market price: Nothing more, if possible less !
• « Price Premium » will be accepted only if promising access to added values
The consumer:
Mature, demanding and «zapping» (2/3)
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The consumers: A demographic (r-)evolution !!! (3/3)
• The segment of « seniors 55+ » will increase
• They learnt to travel and will continue to do so !
• Attention, all this will be determined in the long run by a number of external factors, e.g. – Security
– Sustainability
– Solid financing system for retirement-pensions !
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• The risk of our global business will increase and therefore play in favour of an « multi-destination » approach
• The market will evolve and leave a place for « Generalists » as well as for « Specialists »
• The vertical integration will be an option, depending on the Business Model pursued
• The process of concentration will continue (e.g. merger of « Generalists » and « Specialists » due to necessity and/or opportunity)
The tourism industry:
Master the dynamics of change !
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Tour Operators: New means of production (1/2)
• Transport: New opportunities – Rail: Densification of High-Speed-Train network in France &
Europe facilitates feeder-services and new offers
– Road: Densification of motorway network in France & Europe facilitates auto-mobility and new offers
– Air: Capacity increase will facilitate TO’s access to
• Long Haul: A-380 to major destinations/cities
• Short Haul: Point/Point services with “Low Cost” carriers
– Sea: New generation of ships is adressing new clientele
• Vessels: Mega cruise-ships as floating resorts with flexible destinations
• Ports: dedicated installations & integration in transport network
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Tour Operators: New means of production (2/2)
• Technology – Restructuring the foundations of the industry
• Organisational development – Source and leverage of corporate performance
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• Economy
– Economic Integration of the EU
• Creates intra-European opportunities to enhence operational competitiveness, e.g. labour market
• Enforces competition with extra-EU countries, e.g. laws, currency/exchange rates
– Deviation of consumers tourism buying power
• Consumerism
The external factors : Cope with their impacts ! (1/2)
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Impact of the external factors (2/2)
• Jurisdiction & Politics
– Reinforcement of legislation in France and Europe
– Standardisation: definition of new standards and their internationalisation, e.g. air transport
– Real implication of political agents, e.g. national Foreign Offices and « Brussels Administration»
• Sustainable tourism
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• Key Factors of Success
• Marketing Prerogative
Perspective on… Destination Strategies
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Key Factors of Success
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Development of tourism capacities and
infrastructures
Coherent and consistent Marketing
Integration of tourism and regional planning
Consideration of socio-economical challenges
Innovation
Sources :
NTO’s , Presse , CETO , IFTO , analysis of Roland Berger Consulting and EuroCycle
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Development of tourism capacities and infrastructures
• Accomodation
– Capacity
– Quality
• Transport
– Infrastructure
– Flow Management
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Integration of tourism and regional planning
• Cluster
• Utilities
• Platform
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Consideration of socio-economical challenges
• Sustainabilty
• Reducing collateral damages
• Develop internal tourism
• Risc Assessment & Management
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• Get and stay recognisable…
– The consumer wants to be oriented, reassured, and, transparency given, is willing to pay the market price for branded products
– « Branding »: Having strong brands and managing these assets professionally is becoming an imperative
• … and face the challenge of differentiation !
– Clients do no longer constitute homogeneous and stable entities, the segmentation of the offering therefore is a « must »
– The markets getting more & more specialised, it is vital to define a positioning being clear, coherent & competitive
Coherent and consistent Marketing (1/2)
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Coherent and consistent Marketing (2/2)
• Good-bye «Marketing for the masses»
– Monitor societal changes in the market, in Europe, in Asia and elsewhere
– …evaluate their impact for the business, their inherent chances/risks and the companies’ strength/weaknesses
– …re-define the Marketing Strategy in favour of either adaptation or innovation and get it targeted and segmented
– … re-work the Marketing-Mix: product, pricing, branding, communication, distribution, EVERYTHING !
• Welcome to the frontier land of social media !
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Mutual Benefits
• The evident ones…
• « Conditio sine qua non » for maximizing them
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The evident ones
• Monetary – E.g. profit & wealth
• Community – E.g. jobs & education
• Socio-Cultural – E.g. protection & identity
• Ecology – From « hygene factor » to long term key factor of success
• …
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« Conditio sine qua non » to maximize them: Destinations & TO’s together !
• Sustainable and Responsible Tourism – Promote environmental and sustainable management
• Health and Safety – Monitor all developments in legislation on health and
safety directly affecting the tourism business.
• Crisis Communications Coordination – Facilitate the exchange of information in key areas of
operational delivery
• Destinations Policy , e.g. – Liaise with governments at destinations regarding tour
operating & tourism issues – Promote the positive and professional image of the
industry in source markets and in destination countries