#TTE2016
#TTE2016
“Transform or be disrupted”Can the traditional Tour Operators survive?
Marco Ryan
#TTE2016
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@marcoryan
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#TTE2016
Early disruption focused on specific stages of the Travel experience
Dream
Plan
BookExperience
Share
#TTE2016
What trends will cause further disruption?
Generation–n
IOT
Atomization of Apps Digital Transformation
SMAC Business models
Mobility
Design thinking
#TTE2016
Key trends; Generation-n
Generation-nThe “needs based” generation
Relevancy Simplicity Lifestyle Immediacy
#TTE2016
What “needs” are tour operators fulfilling?
Convenience?Price?Value?Trust?Scale?
Flexibility?
Are they still a match for the changing needs of
their customers?
#TTE2016
Key trends: Internet of Things (IOT)SO WHAT?
¨ Data now becomes an Asset, Analytics a hygiene factor
¨ New business models based around solutions & Partnering
¨ Drive increasing Customer expectations around friction fee Experience
EXAMPLES¨ Virgin Atlantic, Milton Keynes Council, RR,
BGas, Fitness First, Disney, John Deere
#TTE2016
Key Trends: Atomization Of AppsSO WHAT?
¨ Increases revenue opportunities for new Solutions/services
¨ Provides more micro-measurement opportunity
¨ Customers increasingly less tolerant of App boundaries and poor integration.
¨ Increased complexity of Customer Ownership
¨ Challenges IT and Mobile Roadmaps
EXAMPLES¨ Spotify, WeChat
#TTE2016
Key Trends: Design Thinking
SO WHAT?¨ Emotional responses build loyalty. Design
thinking ensures products and services drive high loyalty.
¨ Often Require cultural shift and sometimes leads to organizational change
¨ Products are often simpler, more focused but always more relevant
EXAMPLES¨ Nest, Square, Disney, GE, IBM, Apple
Return to your
original use
group and
testing for
feedback
TestBuild a
representation of
your ideas to
how others
Prototype
Brainstorm and
come up with
creative solutions
IdeateConstruct a point of view that is based on use needs and
insights
Define
Learn about the audience for whom you are
designing
Empathize
#TTE2016
Key Trends: Mobility & Smart Devices
SO WHAT?¨ Device less important, emphasis now on
seamless experience across devices¨ Increase reliance on Real-time analytics
and User Experience Design to make interaction contextual
¨ Low tolerance for experiences that are too generic or that create friction
EXAMPLES¨ Natwest, Snapchat, Slack, Virgin
America, Uber
#TTE2016
Key Trends: Digital Transformation
SO WHAT?¨ Needs CEO leadership to succeed¨ Culture change is critical as Digital needs
to be pervasive across organization¨ Fundamentally different from Digitization¨ For many organizations failure to
transform will ¨ Sometimes difficult to “change the wings
of the aircraft in flight”
EXAMPLES¨ Axel Springer, Delta, Air New Zealand,
Thomas Cook
#TTE2016
Key Trends: The Rise Of SMAC
SO WHAT?
EXAMPLES
¨ Increasingly a “hygiene Factor” for digital organizations
¨ Individually important, but when combined can be both disruptive and differentiating.
¨ Implications for Data Protection and Cyber Security
¨ Finally enables 1:1 marketing to be cost effective
¨ Netflix
Social Mobile
Analytics Cloud
#TTE2016
Key Trends: Artificial Intelligence
SO WHAT?¨ Can process unstructured data (e.g. Social
media)¨ Success measured by ROI, Impact, new
models not on traditional IT measures¨ Levels of investment requires partnering
and new ecosystems focused on solutions not on traditional corporate boundaries
EXAMPLES¨ IBM, Amazon, Microsoft.
#TTE2016
Where is the Disruption? Social Travel Agents
The ability to mix crowdsourcing, expert insight and professional services into a collaborative solution challenges Tour operators who are hampered by expensive retail footprint, that restricts their agility, their profitability and their relevance
Important because…
#TTE2016
Where is the Disruption? The Sharing Economy
New products and services are being rapidly extended on existing disruptive platforms where the principle is about sharing rather than owning at a pace that the Tour Operator cannot match
Important because…
#TTE2016
Where is the Disruption: Social Content & Trust
Reviews, Localized content and services based on Social trust that are modularized and can be integrated into different and changing ecosystems, undesigning the Tour Operator’s value chain
Important because…
#TTE2016
What Are The Typical Characteristics Of A Digital Enabled Company?
Talent and leadershipSupporting internal processes
Organisation
Internal collaboration across functions and high performing cultureRisk appetite regarding digital initiativesSpeed of decision making and agility of digital organization
Access of capabilities through external partnerships
Promotion of "test and learn" environment
Culture and mindsets
Bold, long-term orientationAbility to address customer need
Linkage to overall corporate strategyStrategy
Digital content creation/innovation strategyDigital customer experience applicationDecision making/data analyticsTechnology infrastructure and growth management
Automation of customer activities and back office
Overall capacity and channel usage
Capabilities
Which Tour Operator can claim
to match up to this?
Copyright 2016 McKinsey & Co
#TTE2016
Tour Operators are evolving … but slowly
Tour Operator 1.0
• All About manual and analogue processes
• Product led• Focused on Operations• Little or no digital initiatives
Tour Operator 2.0
• Silo’d organization• Legacy IT being addressed• Operationally efficient• Fragmented Digital initiatives• Basic CRM• Main Focus on AR revenue• Beginning to adapt• Some new products and
services
Tour Operator 3.0
• SMAC compliant technology• New Organization model driving
cross-functional projects• Operationally efficient, but with
increasing focus on Lifetime Customer Value
• Clear digital Roadmap and coordinated digital plans
• Single View of the customer• Data and Analytics driving
insight and performance• Agile to changing Customer
needs• Design thinking driving new
products
Tour Operator 4.0
• Fully connected for all stakeholders
• “Smart” Culture of real-time operations & insight led actions across all functions
• Friction free experience between channels ,devices and locations
• New Organization model • Operationally efficient,
Commercially mature• Digital core competency across
organization• Single View of the customer• Customer needs at heart of a
new ecosystem of digital partnerships
• Deep understanding of Customer Lifetime value
“Legacy/basic”
“Agile /Digital”
“Smart Tour Operator”
“Adapting /Digitizing”
#TTE2016
What strengths and weaknesses do Tour Operators typically exhibit?
• Legacy Systems• Poor data management• Analog culture & largely Product
focus• Non-digital leadership in Board and C-
Suite• Listed companies • “Rumsfeldian” denial about disruption• Belief that their historical strengths
are enough to deter disruption
Historical strengths and yet also historical weaknesses
#TTE2016
AnalogTraditional channel Silo‘d
DigitisingMulti-channel monologue
DigitalOmni-channel dialogue
Tour Operators & The Digital Tipping Point
#TTE2016
What Should Transformation Mean To Tour Operators
TALENT: Bring in digital talent at all levels, especially for succession planning at the top. Shareholders and investors must hold the board more accountable to digital progress
DATA: Treat data like a Balance Sheet Asset. Invest,. Use, audit and understand its value
TECHNOLOGY: Partnership, open & scalable systems are key CULTURE: Challenge the Silos and “Product /Yield” mindsetDIGITAL: It is not a function or a team, it is your future. Make it
pervasive.DESIGN THINKING: Lead with Customer Experience and Needs. Products
should be simpler and more relevant to CustomerCOLLABORATE: Get your head out of the sand and look for new disruptive
partnerships
#TTE2016
Conclusion – Can Tour Operators Survive? ... but we are at a tipping point. Tour Operators must
• Increase digital boldness in the boardroom• Create a “Data/Analytics first” culture• Instill Design thinking as a core behavior• Really – DEEPLY – understand customer needs• Dramatically change their technical & product
agility (especially around customer data)• Pursue innovative and disruptive partnerships
YESand
NO
… or be disrupted
#TTE2016
Thank you
@marcoryan
www.marcoryan.com
uk.linkedin.com/in/marcoryan
www.marcoryanphotography.com
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