Facing DisintermediationHK tourist facing the IT stormA discussion at HKU SPACE

By Erwin Huang VP education, HKITF

Quick backgd: Erwin Huang

• HKIT Federation, VP of Education Committee

• IT, Media, Retail background• Assisting the HK Tourist industry to react

to IT changes for 8 years– Partially sponsored by HK.gov

Agenda

• Internet and the Tourist Industry– Born of the Knowledge Consumer– Disintermediation

• IT, Friend or Foe?– Sample Solution

A Paradigm Shift in the Tourist Industry

A Paradigm Shift

• Born of the Knowledge Consumer• Internet as Disruptive Technology• Disintermediation

– Changes in the Value Chain = Potential Cut out of the Middleman

• What can we do?• A new way of thinking…

Born of the Knowledge Consumer

• Free, Direct, Easy, Up-to-date Information flow through Internet

• Customer becomes more knowledgeable• New Generation of Consumer with High spending

power: Demand Value, Customization, Speed, Flexibility

Knowledge Customer Sample:

• Direct contact between the 3star Hotel in Budapest with the Traveler from Shatin in 1 minute

Disintermediation

• If all that a Tourist Agent is offering is:– Ticketing (due to access of proprietary information,

e.g. flight availability.. Hotel vacancies..)– Lower price by cutting into agent discount

• A good chance that disintermediation will occur soon..

So what shall we do? Are we DOOMED?

• IT Revolutions as a Disruptive Technology has the Potential to really hurt the sales of the Travel Agencies

• Esp. SME type agencies– Competing on Price– Convenience– Access to Proprietary Information

• Different environment Demands a Different way of Thinking• Adopting Customer Oriented Systems and Business Flow

Panel Speaker

• Sun N Sea Holidays

• http://www.sunnseaholidays.com/en/

Sun N Sea Holidays

• Using Web as Marketing tool• Focus on a Niche Market• Add Value/Service to the Customer experience

• List Management• Recurring/Loyal Customer• VIP Program?• A CRM Program?

What is a CRM?

• CRM: Customer Relationship Management• Think everything from the angle of the Customer• Who are they? Where do they come from?• What are their Interest? What is the spending level? How many

family member? When is their birthday? • Where do they want to go on Xmas? Easter?• How much is she willing to spend?• Predict what her needs? And offer products accordingly..• NOT necessarily a Computer System• Definitely a System of Operation

Basic CRM Model for Tourist Industry

Acquiring Customer

Knowing your Customer

Building Products, and Service

Increasing Revenue

CRM: Creating the list and

Protecting the list

• Your current custom, do you keep a list of their contact?

• Buying it?• Typing it in from

directories?• Upgrading customer

on the list?• Protecting your list?!

Mass mailing List

Confirmed email

Real Customer

Coming backCustomer

LoyalCustomer

Understanding Customer-Centric Systems: HSBC

• Customer “Life-Cycle”• When you are 12, your mother open

your first Bank Account.. Your first HSBC account

• 15 your first ATM card…• When you are 18, HSBC offers you your

University Loan, or your first Credit card (even when you have no credit yet)

• When you are 23, HSBC will be your natural choice for your first Salary payment… then first Autopay

• 24, your first Tax• 30 your first Insurance sales• 34 your first house mortgage• 35 plan for your first kid..• 35 your investment accounts• 45 your retirement accounts etc…

Lesson from HSBC

Know your Customer• What do they want at what time?• How much did they spend with you last year• How to increase that?• How does he think?• What does he value?• What Service does he want?

Shopping for CRM: Common Questions

• How do I start• How much should I spent?• How do I measure ROI?• How to maintain the system?• Can I export or import info?• Is my data safe?

New Marketing tools

• Web 2.0 (Social Networking)– Extending into the Social Networking World– Even more segmented market– A better chance to understand your customer– The Long Tail opportunity

• Mobile Internet Solutions

Shopping for Web 2.0 Solution: Common Questions

• How do I start• How do I catch on the Facebook wave and

reach these users?• How much should I spent?• Do I need dedicated staff?• How do I measure ROI?• How to maintain the system?

Discussion

• Q + A

• Facebook: erwinhuang1• Slide available: Slideshare.net/erwinhuang