Making the most of ICT-based Making the most of ICT-based opportunities for developing tourism opportunities for developing tourism

in destinationsin destinations

Dr Roger Carter

Managing Director, TEAM

WTO Affiliate

UNCTAD Expert Group Meeting on ICT and Tourism for Development

30 November 2005

Introduction to TEAMIntroduction to TEAM

• WTO Consultant and Affiliate Member• Co-authored the WTO Business Council publication,

“Marketing Tourism Destinations Online”, 1999, + successor publication “E-Business for Tourism, published in October 2001

• Consultant in strategy, business planning and operations for tourism destination organisations – strong focus on e-business in all our work

• Clients include the World Tourism Organization, European Travel Commission, Western Cape TB, Seychelles TMA, Enterprise Estonia, VisitBritain, Irish, Scottish and Wales TBs, and Destination Management/Marketing Organisations (DMOs) throughout the UK

• Managers of the European Travel Commission’s Web site, “New Media Review”, which monitors trends in the use of new media by consumers in all major tourism markets

• Publishers of ‘DMO World’, a newsletter for tourism destination organisations around the world

AgendaAgenda

• Key trends in the use of ICT in general and for travel and tourism

• Key roles for ICT/e-business in destination management and marketing

• E-business model for tourism destination communities

• Options for acquiring ICT/e-business systems

AgendaAgenda

• Key trends in the use of ICT in general and for travel and tourism

Rapid growth in use of the InternetRapid growth in use of the Internet

  

Source: Computer Industry Almanac (as quoted by ClickZ Stats in September 2004) / eTForecasts for earlier figures (December 2002)

Both Computer Industry Almanac and eTForecasts feature the same data.

44.5

184284

413544

665

814934

1,0701,210

1,350

0

200

400

600

800

1000

1200

1400

1995 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Number of Internet Users Worldwide (in million)

Growth in the use of broadbandGrowth in the use of broadband

63.0

98.8 100.0

250.0

0

50

100

150

200

250

2002 2003 2004 2007

Number of Broadband subscribers worldwide2002-2007

Source: eMarketer, April 2004.

Internet users forecasts by world Internet users forecasts by world regionregion

Source: eTForecats (www.etforecasts.com), July 2001.

0

100

200

300

400

500

600

1997 2000 2003 2006

Internet users by region, 1997-2006 by regions

USAN. AmericaW. EuropeE. EuropeAsiaS/C AmericaM. East/Africa

Number of Internet Users Worldwide by region as in March 2005 (in million)

302.3

259.7

221.4

56.2

19.4

16.3

13.5

0 50 100 150 200 250 300 350

Asia

Europe

North America

Latin America/Caribbean

Middle East

Oceania/Australia

Africa

Internet users by world regionInternet users by world region

Source: Internet World Stats statistics updated on 24th March 2005.

0

500

1000

1500

2001 2004 2007

Worldwide

0

500

1000

1500

2001 2004 2007

USA

Increasing Number of Wireless Internet users Increasing Number of Wireless Internet users (eTForecasts)(eTForecasts)

Non-Wireless Internet Users Wireless Internet Users

0

500

1000

1500

2001 2004 2007

Western Europe

0

500

1000

1500

2001 2004 2007

Asia-Pacific

Trends in overall online travel market size Trends in overall online travel market size in the US, 2000-2004in the US, 2000-2004

13

20.226.5

39.4

52.8

05

10152025303540455055

Bill

ion

US

$ p

.a.

2000 2001 2002 2003 2004

Source: PhoCusWright (various articles: Nua - December 2001, eMarketer - February 2002 and PhoCusWright itself – July 2004).

US online travel booking are expected to reach $91 billion by 2009 at which time it will represent 33% of the total US travel revenues. By comparison, in 2004 it represented only 23% of total US travel revenues.

Value of US online travel market 2003-Value of US online travel market 2003-20092009

4654

6270

7784

91

0

20

40

60

80

100

2003 2004 2005 2006 2007 2008 2009

US online travel booking revenues 2003-2009 (in billion $)

Source: JupiterResearch, quoted by ClickZ Stats in November 2004.

Trends in overall online travel market size Trends in overall online travel market size in Western Europe, 1998 – 2006in Western Europe, 1998 – 2006

Source: Carl H. Marcussen “Trends in European Internet Distribution of Travel & Tourism Services”, April 2005 (Centre for Regional and Tourism Research – Denmark http://www.crt.dk/trends)

0.225 0.792.453

4.8138.34

12.5

17.6

22.3

26.9

0

5

10

15

20

25

30

In b

illi

on

Eu

ros

1998 1999 2000 2001 2002 2003 2004 2005 2006

Trends in overall online travel market size - Western Europe 1998-2006

Latest US online travel trendsLatest US online travel trends

% of US travel booked online

2002 15%

2003 21%

2004 27%

2005 32%

2006 35%

Sources: PhoCusWright data from June 2004 (quoted by eMarketer in March 2005)

Sources used to find out where Sources used to find out where to go in 2005 in various marketsto go in 2005 in various markets

30% 69% 23% 11%6% 12%

33% 61% 35% 22% 22% 8%

36% 64% 19% 7%5% 8%

39% 65% 22% 24% 14% 5%

42% 47% 20% 26% 23% 4%

43% 60% 14% 23% 11% 7%

44% 62% 26% 9%7% 10%

47% 31% 26% 25% 8% 6%

49% 50% 25% 19% 17% 11%

49% 57% 25% 33% 26% 1%

50% 63% 29% 39% 21% 13%

50% 36% 13% 29% 13% 7%

51% 65% 50% 44% 35% 11%

52% 53% 33% 26% 12% 7%

54% 58% 12% 22% 16% 16%

54% 55% 8% 20% 21% 15%

59% 51% 27% 32% 31% 1%

59% 37% 24% 32% 13% 7%

0% 50% 100% 150% 200% 250% 300%

Korea

Italy

France

UK

PoIand

Netherlands

Spain

Mexico

Canada

Germany

Australia

Brazil

China

Japan

USA

Denmark

India

Russia

Personal recommendation Web search Visit travel agent's office See TV program Read a newspaper Other

Source: Global Market Insite (GMI) Survey of 18,000 consumers globally, June 2005.

Sources used to search for last minute Sources used to search for last minute deals by UK holidaymakers in 2005deals by UK holidaymakers in 2005

Source: Survey by Amadeus of 2,000 UK holidaymakers conducted in May 2005 (reported by travelmole).

51%

34%

32%

29%

22%

0% 10% 20% 30% 40% 50% 60%

Online travelagencies

Traditional paperholiday brochures

Personalrecommendations

from friends & family

Local high streettravel agent

Tourism websites

Sources used by affluent US consumers to Sources used by affluent US consumers to obtain travel information in 2004obtain travel information in 2004

Source: a study by Thomas, Townsend & Kent, reported in eMarketer, September 2004.

76%

47%

42%

35%

24%

0% 20% 40% 60% 80% 100%

Internet search engines

Travel magazines

Referrals

Travel agents

Email newsletters

Primary source of information for Primary source of information for planning travel by Canadians in 2003planning travel by Canadians in 2003

35%

14%

14%

7%

6%

5%

2%

2%

0% 10% 20% 30% 40%

The Internet

Travel agents

Family & friends

Auto clubs

Brochures

Newspapers

Tour Operators

Other

Source: Ipsos-Reid, August 2003.

Changing use of online booking Changing use of online booking

The new tourist – a summary of changing The new tourist – a summary of changing behaviour, attitudes and valuesbehaviour, attitudes and values

• Takes more and shorter holidays• Makes decisions later, reducing the lead time• Seeks more individual offers; self-enrichment; better,

immediate information about the product and the destination; better service

• Is more mobile and critical; more brand aware but less loyal; more price sensitive

• Is more knowledgeable about international travel

And• Has access to the Internet to obtain instant, in-depth

information and booking

And• Has access to low cost international air travel

AgendaAgenda

• Key trends in the use of ICT in general and for travel and tourism

• Key roles for ICT/e-business in destination management and marketing

• Destination marketing, including branding and image• Marketing campaigns to drive business, particularly to SMEs• Unbiased information services • Operation/facilitation of bookings• Destination coordination & management for visitor ‘quality of

experience’ + involvement in the daily operation• Visitor information and reservations• Strategy, research and development• Training and education • Business advice• Product “start-ups”• Events development and management• Attractions development and management

Destination management and marketing functionsDestination management and marketing functions

• Destination marketing, including branding and image• Marketing campaigns to drive business• Unbiased information services • Operation/facilitation of bookings• Destination coordination & management for visitor ‘quality of

experience’ + involvement in the daily operation• Visitor information and reservations• Research and development• Training and education • Business advice• Product “start-ups”• Events development and management• Attractions development and management

Destination marketingDestination marketing

• Destination marketing, including branding and image• Marketing campaigns to drive business• Unbiased information services • Operation/facilitation of bookings• Destination coordination & management for visitor ‘quality of

experience’ + involvement in the daily operation• Visitor information and reservations• Research and development• Training and education • Business advice• Product “start-ups”• Events development and management• Attractions development and management

Destination managementDestination management

• Destination marketing, including branding and image• Marketing campaigns to drive business• Unbiased information services • Operation/facilitation of bookings• Destination coordination & management for visitor ‘quality of

experience’ + involvement in the daily operation• Visitor information and reservations• Research and development• Training and education • Business advice• Product “start-ups”• Events development and management• Attractions development and management

Destination managementDestination management

E-Business for destination managementE-Business for destination managementFunction E-Business supported activity

Destination management for visitor ‘quality of experience’

Visitor needs/ satisfaction research

Project planning/ management

Communication network for destination partnership

Problem alert system

Visitor information and reservations

Product data search and presentation

Reservations

Digital audio/video guides

Information centre management

Strategy, research and development

Strategic research, including impact assessment

Evaluation

Online surveys

Training and education

Distance learning

Networking between institutions to share resources

Practitioner input

Business advice / support

E-newsletters

Knowledge bank – research, plans, case studies, advisory handbooks/ videos, etc

Business management tools

Online support

Product “start-ups” Business planning tools, case studies, knowledge bank (as above)

Start-up online advisory support, including financial advice

Events development and management

Market analysis

Project planning and management

e-Marketing

Business management tools

Online support

Attractions development and management

Market analysis

e-Marketing

Business management tools

Online support

AgendaAgenda

• Key trends in the use of ICT in general and for travel and tourism

• Key roles for ICT/e-business in destination management and marketing

• E-business model for tourism destination communities

The destination as a communityThe destination as a community

• The destination represents the focal point for all the players in tourism whose interests are interdependent – government, residents, suppliers, carriers, major corporations, intermediaries, consumers

• A core role for DMOs is bring together those players to work together in a meaningful way

• The DMO’s ICT/e-business systems potentially provide key media for these players to work together in destination management and marketing

• These systems enable the DMO to communicate with all the players – but also, for the players to communicate with each other

• The destination community e-business system may be represented like this ……

© TEAM 2000

Handheld

Consumersat home

Major Partners – Public & Private

PC

TV

Handheld

Handheld

PC

TourismInformation

Centres

PC

Handheld

ConferenceBuyers Visitors –

MobilePC

Kiosk

CallCentres

PC/TV (Hotel)

Handheld

Tourism Marketing

PC

Tourism Facility

OperatorsPC

Info search

Print mgmt CMS/

Web Publishing

Image library

CRM/Contact mgmt

‘Push’ marketing

Marketanalysis

ImpactAnalysis

Internet

Tourism Development

& BusinessSupport

PC

Travel Trade/ Group

Organises

Reser-vations

MIS/evaluation

Online surveys

PC

Travel Media

Databases

Handheld

PC

Handheld

Product Customer

KnowledgePC

Visitor Services &Manage-

ment

PC

Community– Residents,Schools, etc

Handheld

PC

© TEAM 2000© TEAM 2002

Implementing the communityImplementing the community

• Three year agenda for development

• Many different interfaces, each of which may be subdivided

• A two way process of communications – pull (Web) and push (e-mail)

• A core pool of data and content that is, or can be, available to all of the users

• In addition, special messages can be tailored for particular audiences

AgendaAgenda

• Key trends in the use of ICT in general and for travel and tourism

• Key roles for ICT/e-business in destination management and marketing

• E-business model for tourism destination communities

• Options for acquiring ICT/e-business systems

The components of a destination The components of a destination systemsystem

Technical components

• Hardware + operating system

• A network for communications between the main users – the Web, extranets or intranets

• Software for storing, managing, searching, analysing and publishing data and content

• Web sites (or interfaces) for different groups of users

• Data and content – product, customers, knowledge – traditional assets which must now be positioned at the heart of the system, designed for multiple purposes and resourced accordingly

• The operations – call centres, kiosk networks, Web publishing, push marketing, etc. These are all part of the day-to-day activities of DMOs in an e-business environment and need to be considered as enterprises in their own right

The components of a destination The components of a destination systemsystem

Two broad approaches for obtaining a Two broad approaches for obtaining a destination systemdestination system

• Incremental– Start with product database(s) and one or two

Web interfaces– Buy-in or develop the functionality and add in

new interfaces over time in response to expressed user requirements

• Planned system– Work towards the concept of a fully integrated

system, normally for multiple user groups – even if it is implemented in phases

The incremental approachThe incremental approach

• Database management system

• Database structure

• Content management system

• Knowledge management system

• Web publishing

• Print publishing

• Applications of third party Web services developed or bought-in, when required

Particularly appropriate for DMOs/NTOs with limited resources and requirements

The planned system approach – The planned system approach – two software optionstwo software options

• Buy a fully integrated software system - e.g. World.net, TIScover, Visit - as a package ‘off-the-shelf’, with some customisation and/or highly flexible templates.

• Buy or develop a purpose designed system, built from components:

– Generic and/or

– Tourism specific

Planning for an integrated DMS - Planning for an integrated DMS - TEAM’s approachTEAM’s approach

• E-Business strategy – defines the wider e-business network, provides the framework for action and basis for buy-in; principal focus is on opportunities to make existing activities more cost-effective

• Specification of user requirements – a two-way process

• Functional specification

• Project scoping/Business case analysis

• It is an iterative approach

Planning for an integrated DMS - Planning for an integrated DMS - TEAM’s approachTEAM’s approach

• ‘Request for Information’ from system suppliers or integrator – optional but educational – may result in changes to the specifications or the business case analysis and shortlisting of potential suppliers

• ‘Request for Proposals’ (or ITT) – which should result in an evaluation of the options based on a variety of factors, including a systematic assessment of the extent to which the products will meet the DMO’s detailed requirements

• Implementation Plan – not only the role-out of the ICT, but also the information management plan, the training plan and so on….

• As early as possible in this process, appoint the Project Manager, to contribute to the evolving process

ResuméResumé

• Key market trends, the factors that make it essential for DMOs to take the use of new media seriously and recognise its dynamic nature

• Review of destination management and marketing functions and the way that may be supported by a e-business

• Concept of destinations as communities, and the way that may be supported by a destination e-business system

• Analysis of the options for acquiring ICT/e-business systems

Thank you for your attention!Thank you for your attention!

For further information:

Dr Roger CarterRogerCarter@team-tourism.com

+44 7932 739 453

30 November 2005

1. The central role of ICT and the Internet– Consumers– Intermediaries– Tourism businesses– Internal business processes

2. Demanding consumers – Price conscious – Demanding immediate attention/bookings– Expecting rich, accurate information

3. Commercial players– Operating in your traditional space– Customer focused– Efficient business processes– Effective distribution– Continual improvement

Three drivers of change for DMOsThree drivers of change for DMOs

• DMOs have no God given right to exist

• They must add value by doing things that the private sector does not wish to do or cannot do as efficiently and as effectively as the DMO

• DMOs must be clear about where they can add value and develop a high level of competence in these areas

• Most importantly, they must become expert in exploiting the opportunities that ICT and the Internet offer

So, who needs a DMO?So, who needs a DMO?

• Running a DMO is not easy. You have many masters to please and diverse, and sometimes conflicting objectives to achieve

• Combine public and private sector aims - the achievement of social, cultural, economic and environmental objectives for the destination with the delivery of business to the tourism industry

• The tasks of DMOs are many, as shown in the next slide

The future role of DMOsThe future role of DMOs