IntroducingIntroducing tourismtourism industryindustry: : destinationsdestinations and tour and tour operatorsoperators

by by Roberto Gentile Roberto Gentile yy11st st sessionsession, , JanuaryJanuary 3131stst, 2011, 2011

We are the We are the nation of nation of

G l dG l dGoogle and Google and FacebookFacebookFacebook. Facebook.

Barack Obama'sBarack Obama'sBarack Obama's Barack Obama's State of the Union State of the Union

SpeechSpeechTucson, January 27th, 2011Tucson, January 27th, 2011Tucson, January 27th, 2011Tucson, January 27th, 2011

That world has changed. That world has changed. And for many the changeAnd for many the changeAnd for many, the change And for many, the change

has been painful. I've has been painful. I've seen it in the shutteredseen it in the shutteredseen it in the shuttered seen it in the shuttered

windows of once windows of once booming factories, and booming factories, and

the vacant storefronts of the vacant storefronts of once busy Main Streets. once busy Main Streets.

I've heard it in theI've heard it in theI've heard it in the I've heard it in the frustrations of frustrations of

Americans who've seen Americans who've seen e ca s o e seee ca s o e seetheir paychecks dwindle their paychecks dwindle or their jobs disappear or their jobs disappear ––proud men and women proud men and women who feel like the rules who feel like the rules

have been changed in thehave been changed in thehave been changed in the have been changed in the middle of the game.middle of the game.

They're right. The rules They're right. The rules have changedhave changed In a singleIn a singlehave changed. have changed. In a single In a single generation, revolutions generation, revolutions

in technology havein technology havein technology have in technology have transformed the way we transformed the way we

live, work and do live, work and do businessbusiness. Steel mills that . Steel mills that

once needed 1,000 once needed 1,000 workers can now do theworkers can now do theworkers can now do the workers can now do the

same work with 100. same work with 100. Today, just about any Today, just about any oday, just about a yoday, just about a y

company company can set up shop, can set up shop, hire workers, and sell hire workers, and sell

their products their products wherever wherever there's an internet there's an internet

connectionconnectionconnectionconnection..

Meanwhile, Meanwhile, nations like nations like China and India realized China and India realized

that with some changes of that with some changes of their own, they could their own, they could

compete in this new worldcompete in this new world. . And so they started And so they started

educating their childreneducating their childreneducating their children educating their children earlier and longer, with earlier and longer, with

greater emphasis on math greater emphasis on math g pg pand science. They're and science. They're

investing in research and investing in research and h l ih l inew technologies. Just new technologies. Just

recently, recently, China became China became home tohome to the world'sthe world'shome to home to the world s the world s largest private solar largest private solar

research facility, and research facility, and the the y,y,world's fastest computerworld's fastest computer..

The first step in winning The first step in winning the future is encouragingthe future is encouragingthe future is encouraging the future is encouraging

American innovationAmerican innovation. . None of us can predictNone of us can predictNone of us can predict None of us can predict with certainty what the with certainty what the

next big industry will be, next big industry will be, or where the new jobs will or where the new jobs will

come from. come from. Thirty years Thirty years ago we couldn't know thatago we couldn't know thatago, we couldn't know that ago, we couldn't know that

something called the something called the Internet would lead to an Internet would lead to an te et ou d ead to ate et ou d ead to a

economic revolutioneconomic revolution. . What we can do What we can do –– what what

America does better than America does better than anyone anyone –– is spark the is spark the

creativity and imaginationcreativity and imaginationcreativity and imagination creativity and imagination of our people.of our people.

We are the nation We are the nation that that put cars in drivewaysput cars in drivewaysput cars in driveways put cars in driveways

and computers in and computers in offices; the nation ofoffices; the nation ofoffices; the nation of offices; the nation of

Edison and the Wright Edison and the Wright brothers;brothers; of Googleof Googlebrothers; brothers; of Google of Google

and Facebookand Facebook. In . In America innovationAmerica innovationAmerica, innovation America, innovation doesn't just change doesn't just change

our lives It's how weour lives It's how weour lives. It s how we our lives. It s how we make a living.make a living.

Barack ObamaBarack ObamaPresident of the United States President of the United States

f A if A iof Americaof America

IDENTIFY YOURSELFIDENTIFY YOURSELF1.1. IDENTIFY YOURSELFIDENTIFY YOURSELF1. 1. IDENTIFY YOURSELFIDENTIFY YOURSELF

AreAre youyou aa TravellerTraveller ??Are Are youyou a a Traveller... Traveller... ??

T i tT i t??… or are … or are youyou a a TouristTourist??

You are aYou are a realreal traveller iftraveller ifYou are a You are a realreal traveller if…traveller if…you avoid travel agencies and you tailor youryou avoid travel agencies and you tailor youryou avoid travel agencies and you tailor your you avoid travel agencies and you tailor your

trip to your own needstrip to your own needsyou think Bruce Chatwin or Tiziano Terzani are you think Bruce Chatwin or Tiziano Terzani are

th b t itth b t itthe best writers everthe best writers evero lo e strolling aro nd getting to knoo lo e strolling aro nd getting to knoyou love strolling around, getting to know you love strolling around, getting to know

local people and tasting local foodlocal people and tasting local foodp p gp p g..it doesn’t really matter ..it doesn’t really matter whatwhat you see but you see but howhow

you experience it…you experience it…

You areYou are justjust a tourista tourist ififYou areYou are justjust a tourist a tourist if…if…your luggage contains mainly high heels shoes (ifyour luggage contains mainly high heels shoes (ifyour luggage contains mainly high heels shoes (if your luggage contains mainly high heels shoes (if

you are you are ♀♀) and D&G sneakers (if you are) and D&G sneakers (if you are♂♂))you are disappointed as your smartphone is out of you are disappointed as your smartphone is out of

coverage and you cannot get on Facebookcoverage and you cannot get on Facebookcoverage and you cannot get on Facebookcoverage and you cannot get on Facebookyou know who has been nominated for Best Actoryou know who has been nominated for Best Actoryou know who has been nominated for Best Actor you know who has been nominated for Best Actor

at the Golden Globe Awards but you have no idea at the Golden Globe Awards but you have no idea which the Estonia capital iswhich the Estonia capital iswhich the Estonia capital iswhich the Estonia capital is

all you need is to relax under the sun have fun andall you need is to relax under the sun have fun and..all you need is to relax under the sun, have fun and ..all you need is to relax under the sun, have fun and have a beer: no stress, please!...have a beer: no stress, please!...

So… Now that youSo… Now that youSo… Now that you So… Now that you know who you areknow who you areknow who you are…know who you are…

Are you ready toAre you ready toAre you ready to Are you ready to take off?take off?take off?take off?

22. . EGYPT DID A GREAT JOB IN EGYPT DID A GREAT JOB IN DEVELOPING TOURISM IN THE DEVELOPING TOURISM IN THE

RED SEA AREARED SEA AREAHowHow diddid theythey managemanage toto… … HowHow diddid theythey managemanage toto

dodo thatthat??do do thatthat?...?...

That’s the story : the 30sThat’s the story : the 30sThat s the story : the 30sThat s the story : the 30s

Everything started with a Everything started with a y gy gfew posh British tourists few posh British tourists e pos s ou s se pos s ou s s

picnicking at Giza and thepicnicking at Giza and thepicnicking at Giza and the picnicking at Giza and the Pyramids…Pyramids…Pyramids…Pyramids…

the 80sthe 80sthe 80sthe 80s

th i i f L tth i i f L t… then cruising from Luxor to … then cruising from Luxor to A b iA b iAswan became an attractive, Aswan became an attractive,

but still elitaristic, place to but still elitaristic, place to go…go…

the 90sthe 90sthe 90sthe 90s

… the Red Sea Riviera was … the Red Sea Riviera was turned into a gold mine turned into a gold mine

targeting both divers and targeting both divers and families…families…

Sharm El Sheik anyone?!Sharm El Sheik anyone?!Sharm El Sheik anyone?!Sharm El Sheik anyone?!

until yesterdayuntil yesterdayuntil yesterdayuntil yesterday

It is still a market in It is still a market in evolution... New places to evolution... New places to discover: discover: MarsaMarsa AlaamAlaam, El , El QueseirQueseir, , MarsaMarsa MatrouthMatrouth, , QQ ,, ,,

NwebaNwebaNwebaNweba

but today...but today...but today...but today...

and then what’s going toand then what’s going to... and then , what’s going to ... and then , what’s going to happen to the Egyptianhappen to the Egyptianhappen to the Egyptian happen to the Egyptian

tourism industry?tourism industry?tourism industry?tourism industry?

Maybe almost nothingMaybe almost nothingMaybe, almost nothing...Maybe, almost nothing...

EgyptEgyptEgypt Egypt Nothing compares!Nothing compares!g pg p

Welcome to our interactiveWelcome to our interactiveWelcome to our interactive Welcome to our interactive catalogue!catalogue!

How has the Egyptian How has the Egyptian touristic market evolvedtouristic market evolvedtouristic market evolved touristic market evolved

overtime?overtime?overtime?overtime?

Giza and the PyramidsGiza and the Pyramidstarget: uptarget: up marketmarket

Giza and the PyramidsGiza and the Pyramidstarget: uptarget: up--marketmarket

worldwide travellers,worldwide travellers,worldwide travellers, worldwide travellers, interested in culture andinterested in culture andinterested in culture and interested in culture and

history expecting top levelhistory expecting top levelhistory, expecting top level history, expecting top level services and facilitiesservices and facilitiesservices and facilitiesservices and facilities

cruising on the Nilecruising on the Niletarget: couples and honeytarget: couples and honey moonersmooners

cruising on the Nilecruising on the Niletarget: couples and honeytarget: couples and honey--moonersmooners

in search of a good mix of culture in search of a good mix of culture history, good food, shopping and history, good food, shopping and entertainment… but also looking entertainment… but also looking

for time to relaxfor time to relax

Sharm el Sheikh & Co.Sharm el Sheikh & Co.target:target: tout le mondetout le mondetarget: target: tout le mondetout le monde

the initialthe initial--goers, divers, were goers, divers, were followed by the sofollowed by the so--called IT called IT

l fl fpeople, groups of teen&yang, people, groups of teen&yang, t t DINK lt t DINK lempty nesters, DINK couples empty nesters, DINK couples

and families ith childrenand families ith childrenand families with childrenand families with children

How the Red Sea Riviera defeated How the Red Sea Riviera defeated Mallorca, Greece, TunisiaMallorca, Greece, Tunisia

11. . Open 12 months/yearOpen 12 months/yearp yp y2 Mild temperature all over the year2 Mild temperature all over the year2. Mild temperature all over the year 2. Mild temperature all over the year 3 Accommodations (from b&b up to 5*3 Accommodations (from b&b up to 5*3. Accommodations (from b&b up to 5 3. Accommodations (from b&b up to 5 hotel) suiting all tasteshotel) suiting all tasteshotel) suiting all tasteshotel) suiting all tastes4 cheaper prices compared to competitors4 cheaper prices compared to competitors4. cheaper prices compared to competitors4. cheaper prices compared to competitors

How the Red Sea Riviera defeated How the Red Sea Riviera defeated Mallorca, Greece, TunisiaMallorca, Greece, Tunisia

5. the 3 S: clear sea, sandy beaches, 5. the 3 S: clear sea, sandy beaches, h ( b h ’ h )h ( b h ’ h )hot sun (maybe there’s another one…)hot sun (maybe there’s another one…)6. word of mouth: You go, I follow you6. word of mouth: You go, I follow you7. Trend setters’ (actresses, rock7. Trend setters’ (actresses, rock7. Trend setters (actresses, rock 7. Trend setters (actresses, rock stars, TV starlets, footballers) stars, TV starlets, footballers) , ,, ,followersfollowers

How Red Sea Riviera defeated How Red Sea Riviera defeated Mallorca, Greece, TunisiaMallorca, Greece, Tunisia

8. safer than other countries (well, not 8. safer than other countries (well, not always...)always...)9. huge investment in marketing9. huge investment in marketing9. huge investment in marketing 9. huge investment in marketing initiatives, advertising and promotioninitiatives, advertising and promotion10. …… You find!!10. …… You find!!10. …… You find!!10. …… You find!!

ExerciseExercise # 1# 1ExerciseExercise # 1# 1

Think of how to turn yourThink of how to turn yourThink of how to turn your Think of how to turn your country in a new gold minecountry in a new gold minecountry in a new gold mine country in a new gold mine

for tourismfor tourismfor tourismfor tourism

Identify one convincing “reason why” tourists Identify one convincing “reason why” tourists should visit your Countryshould visit your Country

S i b kS i b k kkSet your own target: tourists, backSet your own target: tourists, back--packers, packers, worldwide travellers, families etc..worldwide travellers, families etc..worldwide travellers, families etc..worldwide travellers, families etc..

choose THE attraction not to be missedchoose THE attraction not to be missedchoose THE attraction not to be missedchoose THE attraction not to be missedfind at least 3 typical local products and find at least 3 typical local products and yp pyp p

identify a way to sell themidentify a way to sell them… you have no budget limits (advertising, … you have no budget limits (advertising, promotion fam trip etc )promotion fam trip etc )promotion, fam trip etc.)…promotion, fam trip etc.)…

3.3. EUROPEAN TOUREUROPEAN TOUR3. 3. EUROPEAN TOUR EUROPEAN TOUR OPERATORS: NUMBERSOPERATORS: NUMBERSOPERATORS: NUMBERS OPERATORS: NUMBERS

AND TRENDSAND TRENDSAND TRENDSAND TRENDS

How travels have been sold on line in E 1998 t h 2009 (billi €)Europe, 1998 trough 2009 (billion €)

20042004

300

350

…% = in % sul mercato globale

25 7%300

350

…% = in % sul mercato globale

25 7%

20042004€ 18.9 billion

9,5% market share

200

250

16,1%19,4%

25,7%

22,5%

200

250

16,1%19,4%

25,7%

22,5%20082008

100

150

200

2 3%4,0%

6,5%9,5%

12,9%16,1%

100

150

200

2 3%4,0%

6,5%9,5%

12,9%16,1%

€ 58,4 billion22,5% market share

50

100

0,1%0,4%

1,1%2,3%

50

100

0,1%0,4%

1,1%2,3%

200920090

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Mercato viag gi Vend ite on line

01998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Mercato viag gi Vend ite on line

€ 65,2 miliardi25,7% del mercato

Leading tour operator s, in Italy and in Europe: a comparison

Turnover 2009

Growth2009/2008

Turnover 2009

( €)

Growth2009/2008

Company (billion €)

Gruppo Alpitour 1090,2 -11,9%

Gruppo Ventaglio 443,1 -

Company Country (billion €)

TUI AG D/UK 14.255,4 -28,3%

Thomas Cook UK/D 10 403 4 6%Eden Viaggi 258 -2%Hotelplan Italia 183,2 -25,6%Teorema Tour default -

Thomas Cook UK/D 10.403,4 -6%

Rewe Group D n.d. -

K i CH 2 578 5 15 7%Valtur 215 +3%

Veratour 170 -4%Eurotravel default -

Kuoni CH 2.578,5 -15,7%

Club Med F 1.360 -8,3%Eurotravel default -Settemari 98 -8%

I Grandi Viaggi 85,3 -14,9%

AlltoursD 1.220 -6,2%

FTI Group D 1.093 +24,4%

In Viaggi n.d.

Kuoni Italy 69,5 -23,9%

Swan Tour 86 11%

Alpitour I 1.090,2 -11,9

Hotelplan CH 1.071,5 -11,8%Swan Tour 86 -11% p ,

2005 2006 2007 2008

Number of Tour Operators and Travel Agents in Europe (2009)

Austria 2.522 2.645 2.571 2.583Belgio 1.223 1.145 1.158 1.158Bulgaria 1.196 1.670 2.068R bbli C 6 396 2 350 2 450Repubblica Ceca 6.396 2.350 2.450Danimarca 627 603 599 594Finlandia 1.016 795 780 710Francia 4.922Germania 12.639 11.866 11.404 11.046Grecia 3.277Ungheria 1.799 1.116 1.137 1.122Irlanda 320Italia 11.124 9.800 11.846Malta 669 239 248Olanda 2.355Norvegia 948

from

Portogallo 1.484 869Polonia 5.184 2.628Romania 1.989 2.600 2.950 3.200Slovacchia 402 502 600 650 from:Slovenia 365 356 376Spagna 8.373 5.258 5.600 5.100Svezia 2.826 800Svizzera 2.200 2.200Svizzera 2.200 2.200Gran Bretagna 6.663 6.124 6.108 5.858

VERTICAL INTEGRATION OF THE EUROPEAN LEADING TOUR OPERATORS: A FAILURE

Milan, april 2008 - “The failure of the model of vertical integration of tour operators, much in vogue in the g f p , g

'90s, is obvious. The German conglomerate Preussag (TUI meant that ten years ago, Thomson, Nouvelles(TUI meant that ten years ago, Thomson, Nouvelles

Frontières, and shares in Club Med and Alpitour) lost 300 million € from 2003 to date ”300 million € from 2003 to date ...

“ …The error was pay more attention to volumes in the proper management of business and product.

Error that the specialists have not made, the market as those closer to the needs of consumers. "

J Pi L J f f i dJean Pierre Lozato Jotart, professor of tourism and culture at the New Sorbonne in Paris

Here’s the Boss, Michael Frenzel,

rgentile@networkrgentile@network--news.itnews.it