Anna Pollock, DestiCorp Presentation, Tromso, June 4th, 2008

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Destination E-marketing: Trends, Opportunities and Priorities

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Scope

• E-marketing 1.0 • why a destination management system is

necessary today• What it consists of

• E-marketing 2.0• Where the web is heading

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The Complex Value Chain

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The IN-BOUND Tourism System

• In the tourism social system there are four stakeholders:

Destination Community04/10/23 4

What are they trying to achieve?

• Guests wants it to be easy to find and enjoy a destination that delivers the kind of experience they seek;

• Host suppliers want to attract suitable customers and deliver their services at a profit over an extended period of time;

• Intermediaries want to help guests meet hosts and enable a profitable transaction; and

• The host community wants to realize sustainable net benefits from tourism activity.

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Characteristics of the Tourism System

1. Visitors do not consume products – they have unique experiences that occur in a unique moment in time and space;

2. Guests or visitors travel to the point of consumption, therefore

3. They cannot pre-test the experience or return it if it is unsatisfactory, therefore perceived as high risk

4. These experiences are multi-faceted, involving many components (accommodation, food, activities, etc.) delivered by independent parties and unique.

5. The nature of the experience varies enormously according to purpose, activity, length of stay, visitor origin and party composition.

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Characteristics of the Tourism System

6. Guests minimize their risk by obtaining as much information as they can before they select and book a product – but they have to be motivated!

7. Suppliers’ products & services are perishable8. Suppliers try to expose their products and

services to as broad a market as possible in an attempt to maximize the chances for a sale.

9. Both guests and suppliers rely on intermediaries and their “distribution channels” to help them do business with one another.

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Characteristics of the Tourism System

10. All intermediaries are “information brokers” but take different forms

1. Destination Marketing Organizations (DMOs)2. Other suppliers3. Tour Wholesalers/Operators4. Travel Agencies – online and offline5. Press and media – newspapers6. Technology

11. Distribution Channels are growing in number and complexity

12. Increasingly they are electronic and require both guest and host supplier to become digitally literate.

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US Data – Source Terry Jones, Reardon

USA

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EUROPE

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Automate the Value Chain!

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And Reduce Friction or Pain!

If the Destination Management System does not reduce the pain experienced by guest or

host, it should not exist!

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50% of UK buyers find holiday bookings stressful!

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What pain exists in the system?

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Consumers have less time to do more complex tasks

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How Does She Get Information?

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What pain exists for Guests?

• Growing numbers of independent travelers want to create their own unique experience

• They are having difficulty finding and assembling multiple products

• Impossible to compile multiple elements of a trip at one time, from one web site

• Choice is restricted to major tour operators or online agencies that rely on product delivered in the past by GDS (global distribution systems)

• The small, unique and unusual is particularly hard to find. This is what the high yielding tourist seeks!

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Before During and After Her Visit?

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2/3rds of the tourist experience is virtual – in their heads

The Guest’s Purchase Cycle – in theory

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How Does the Supplier Reach Her?• Print - brochureware• Print – classified or glossy ads in print media

• Web Site – static or dynamic descriptive content• Web Site with inquiries (email)• Web site with booking• Via other sites run by Destination, Third-party

agencies (Expedia, Opodo), other suppliers, Tour Operators

04/10/23 20When…..

When the Customer Has Less Trust

76% of consumers don’t trust brands (Yankelovich)

80% of US shoppers place more trust in brands that offer ratings and reviews than those that don’t

75% of shoppers stated that it was extremely or very important to read customer reviews.

Peer reviews are preferred over expert reviews by a 6 to 1 margin.

Source: FutureLab

Consumers are turning their backs or worse……

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Or When She Pays Less Attention?

• In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.” (Jim Stengel, Global Marketing Officer, P&G)

• 78.2% of Germans are irritated by advertising, only 24% actually still watches it (GfK Marktforschung)

• 54% of US consumers avoids products & services which “overwhelm” with advertising (Yankelovich Partners)

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Or is simply overloaded?

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What pain exists for the HOST?

• Host suppliers sell and deliver only one component of a guest experience

• Distribution costs – especially into international markets - are high (25-40%)

• The product is perishable – cannot be re-sold or returned. Difficult to unload distressed inventory.

• Distress leads to discounting. • Discounting leads to paper thin margins• At the same time, suppliers must deal with…..

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More Access

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More Traditional Channels

1960 2003 *

Radio Stations 4,400 13,500

Magazine Titles 8,400 17,300

Channels per home

5.7 82.4

* Before digital radio and podcasting, Not counting blogs, face book and myspace pages

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200,000,000 blogs

1.8 million residents

>100,000,000 videos(65,000/day)

www.ebay.com 21 Nov 200614,463,346 auctions

Almost 4,000,000 articles(10 languages)

33,347,000 profiles

60 million members

More New Channels

7 billion page views in Dec 2006

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And there’s more!

• Host suppliers sell and deliver only one component of a guest experience

• That product is perishable – cannot be re-sold or returned. Difficult to unload distressed inventory

• Distribution costs – especially into international markets - are high (25-40%)

• Inventory: Allocation and Management• Changing e-commerce practices and trends are hard to

follow• Fear of costs and time to develop new skills• Hard and soft-ware acquisition choice and costs• Incompatible systems04/10/23 28

Introducing the DMS Puzzle!

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A Destination Management System is a technology platform that comprises:

1. Content (creation, aggregation and distribution)2. Processes (transactions and metrics)3. Community (users and relationships)

in order to attract and support guests; help tourism providers find and serve customers; and increase the net benefits of tourism to the host community

1A. Content Creation

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SCOPE• Product Listings with search capability• Product Inventory & Availability• Place Content• Reviews• Ratings

FORMAT• Descriptive Text, Multi-lingual• Numerical data (rooms, prices/rates, commission rates, nights, pax)• Images (still & video)• Maps, GIS coordinates • Tags

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Hotel site

expedia

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Trip Advisor

1B. Content Aggregation

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RSS/XML FEEDS

• Default Feeds – International and local news, weather, sports, entertainment

• Supplier or third-party feeds – special offers, directories, events calendars, image galleries, streaming audio and video

• User feeds – reviews, ratings, blogs, images, videos aggregated from external sites such as TripAdvisor, Flickr, Travelistic etc.

1C. Content Distribution (Publishing)

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CHANNELS• Supplier Web Site & e-newsletters• Destination Portals • Third-party web sites and portals:

– Online agencies: Expedia, Travelocity, Hotels.com– Other suppliers (tour, ferry , airline, train companies)– Media: newspapers and magazines – on and offline– Banner and classified advertisements– Directories (Yellow pages)– Travel Community Sites (Trip Advisor, Real Travel,

WAYN)– Social Media Sites (Facebook, MySpace)

• Kiosks• Hotel, airline TV• Mobile phone channels

2A. Processes - Transactions

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TRANSACTIONS• Inventory Allocation and Management• Booking Inquiries • Booking Transactions

– Accommodation– Tickets: tours, transport, events– Table Bookings

• Other sales (souvenirs, books, merchandise)• Information/brochure downloads• Customer support (call centre)

2B. Processes - Metrics

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PERFORMANCE METRICS

• Content (browsers, page views etc) • Distribution (Search Engine Optimisation)• Transaction (value of booking, sales)• Commerce (inquiries, bookings, “look to book” ratios• Consumer metrics

3. Community

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USERS• Identity • Profiling• Sign On • Access Rights

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)• Business CRM (directory of suppliers, members)• Customer CRM (database of inquiries, customers)

COMMUNITY• Destination Extranets• Visitor/resident Communities

TIPS FOR AND ABOUT THE FUTURE

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1. Think like an alien!Make it easy for the stranger to explore, plan and reduce that perceived risk

2. Content must be created and maintained as close to the source as possibleCreate content locally, distribute globally

3. Sort out roles and responsibilities – don’t compete with each other unnecessarilyMake it easy for the host supplier to sell and serve

4. One web site is not enough (see next slide)Each trip is a unique “event”

One web site is not enough

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TIPS FOR AND ABOUT THE FUTURE

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5. Focus on the content that enriches the experienceTake care of the long tail

6. Make it easy every step of the wayGo the full circle of the purchase cycle

7. Enable and encourage everyone to be an intermediaryDustribution, distribution, distribution!

8. Don’t forget the purpose is to attract - add color, sound, enrich your palette, make it fun, compelling Colour my world!

9. Interact in order to make it personal

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Let the Locals Do the Talking

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Resident Blog

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http://www.communityofsweden.com/Pages/Start/StartPage.aspx

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http://www.newzealand.com/travel/USA/

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http://www.classicbritain.no/

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http://www.fallstv.ca/

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Thank You!

Anna Pollock President

DESTiCORP UK

Anna.pollock@btconnect.com

+44 1544 388 400

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