Wednesday, October 8, 2014

Vacation time is the new value

The new value is vacation time: “Take as much as you want” said Richard Branson to the Virgin Group employees. While you may think this is a revolutionary idea, Sir Richard himself pointed out that he got the idea from Netflix which already gives its employees unlimited vacation time. And many other companies have been doing it in one form or another, including a few that have been doing it for more than fifty years! The implications for the tourism industry are significant. If people change the way they think about vacations, they also change the way they plan for it and what they look forward to may be different than that of people on a more traditional annual schedule of two or three weeks vacations at the same time of the year. This new challenge is a great opportunity to reconsider what features and amenities really matter when people are considering impromptu vacations and revise vacation marketing accordingly.

With impromptu scheduling and variable vacation time, the traditional time-frame of anticipation and planning goes out the window as it is no longer a yearly event scheduled months earlier. Duration would also change from the average vacation time in the generating markets to a diverse mix of short breaks and much longer time away from work. The increasingly shorter booking lead times and the next day city breaks featured by some airlines in Europe would fit perfectly in this new model. As the standard 14-day packages evolves into open-ended programs, tour and charter airlines will have to adapt their cycles of operation just as travel agents may have to finally retire their traditional vacation booklets and replace them with offers formulated on demand and on the spot.

The mindset of expectations would also change whereas preset time-frames filled with itineraries and resort stays in the traditional model would be too restrictive for customers now empowered to choose the duration of their vacation. Instead, they could easily set their vacations to fit to their travel wishes allowing for even more personalized planning. Destinations and resorts would also need to diversify their offering to appeal to both the short break tourists and the slow pace travellers instead of the more narrow profile they are accustomed to.

Tuesday, September 30, 2014

Tourism to grow with income inequality

It may be uncomfortable to acknowledge, but tourism destinations’ competitiveness will depend increasingly upon the choice they make to cater to either the luxury or the economy market. Remaining open to every budget will become increasingly difficult to meet the expectations of both ends of the market as income inequality enlarges the divide between classes. The higher end of the market expects more exclusiveness and distinction while the lower end of the market requires accessibility and affordability. While the concept is hardly new as the hospitality industry has always separated economic and social classes through distinct properties, what is new is the propagation to airlines and terminal facilities which are becoming increasingly segregated along the same economic divide as driven by market demand. The FSC (Full Service Carriers) are moving up market as the LCC (Low Cost Carriers) focus almost exclusively on the economy segment. Terminals and even entire airports are now built or reconfigured to serve either the economy or the luxury class exclusively.

Tuesday, September 23, 2014

The good, the bad and the awful words of social media

Along with the (not so) “easy way” in social media covered in last week’s article, there is also the quest for magic words to get people to stop and look at your message. Being that everyone wants attention, everyone tends to use the same ones, the words they see most often on tweets and Facebook posts, which of course defeats the purpose of being different and being noticed. Rather than searching for catchy and far too often superlative words, how about being engaging and descriptive so that the audience that may be interested in you pauses for a second and clicks to discover what you may have of interest to them. It is then up to you to offer something that is indeed useful or interesting to them. But first, you have to entice them to click you!

Monday, September 15, 2014

The easy way in social media to get nowhere!

So you decided it was about time to get serious about promoting your hotel or other tourism business through social media. You already had a page in Facebook, a Twitter account and maybe even a Google+ profile because you so happen to use to use Gmail. Needless to say the sixty some likes on Facebook and the hundred or so followers on Twitter have done absolutely nothing for you, probably worse, they made you look like you are asleep or that you don’t really care, although you probably did not yet understood the downside of looking asleep on social media. So, you follow the popular and easy way that everyone seems to be using (no, they are not!): you spend some money to buy a bunch of likes and followers to make you look popular. Your Facebook page now has 10000 Likes while your Twitter followers have mushroomed to a few thousands … and still nothing happens. Ah! … content! You sign-up on some web site to feed content to your Facebook page and rack up the tweets to look busy and active … and still … nothing happens. By then, you probably realized that you bought dummies, and that the content is only remotely relevant to your business and out of synch with whatever else you are doing to promote your business.

Monday, September 8, 2014

Will the legacy carriers be the next designer brands?

Air traffic has doubled every 15 years and it is expected to continue at the same exponential rate of growth over the next decade. However in economy class over the last 10 years, the legacy carriers have inexorably lost market share in the short-haul market to the LCC (Low Cost Carriers) who are now taking on the legacy carriers on the long-haul market as well. On the other hand, upper classes have largely remained the realm of the legacy carriers with most of them earning over half their revenue from upper class customers while the economy class with 75% to 80% of the seats and about half the space capacity generates less than half, in some cases as little as a third of the revenue. It is also reasonable to assume that, given the market conditions and the marginal profitability of legacy carriers, the economy class is sustained by the more profitable upper class.

Wednesday, September 3, 2014

Tourism crises: who benefits?

Conflicts and crises severely affect tourism destinations. With increasing frequency since the turn of the century, even major destinations lost their entire tourism industry. While much has been written about their misfortune, rarely does the question comes up as to where are the lost tourists going to instead? Egypt, for example, once the most popular destination in the Middle East, has lost more than 5 million tourists from its peak in 2010 to 2013. To put this number in perspective, it is more tourists than the Philippines received in 2013 or nearly as much as Brazil. As the vast majority of tourists do not cancel their vacations but instead make alternate choices, which destinations benefits from the misfortunes of the others?

Monday, August 25, 2014

The price of cultural tourism

Angkor Wat 1880.
The attraction of cultural tourism is its uniqueness and, most often, its scarcity. It is precisely because a historical monument or a cultural tradition is unique and only found in one place that cultural tourism exist: one must go there to experience the culture. Unlike attraction parks that can be replicated anywhere to meet market demand and spread the traffic, cultural destinations cannot duplicate themselves and cannot expand without compromising or diluting some aspects of their cultural value. Where is the fair and ethical line between preserving virgin state and meeting demand?

Wednesday, August 20, 2014

Are Chinese tourists spending more or less?

Siam Paragon, Bangkok
Singapore reports lower-spending Chinese tourists [1] while Korea reports soaring numbers from them [2], overtaking Thailand, currently on a decline, as their top destination [3]. These seemingly conflicting headlines reflects the evolution of Chinese tourists abroad: they are not the “same” tourists, they are different groups and different generations each affecting changes in different directions. Last week’s article, "Where is the Chinese tourists' money going?" explains how Chinese tourists fall into three key groups where the tourists to Singapore reflect the receding tide of “Hedonists” while the soaring numbers to Korea comprise the rising tide of the “Wenyi” and in Thailand the growth of the “Traditionalists” has been affected by both the end of zero-cost tours and their uneasiness about pictures of unrest.

Friday, August 15, 2014

Should cultural tourism be limited to luxury tourists?

It is indeed a provocative question with uncomfortable answers. By its very nature, cultural tourism is potentially the most beneficial form of tourism toward understanding cultural differences and consequently promote social harmony. So it should be encouraged and facilitated to reach the largest audience. That is the bright side of the idea. The downside of cultural tourism is the “observer effect” where the subjects are affected by the mere presence of the observers. As cultural tourism become increasingly popular so does the increasing effect on the culture being observed altering its nature and diminishing its value.

Monday, August 4, 2014

Where is the Chinese tourists' money going?

The Wenyi tribe?
Looking past the media hype and the glittering headlines, it is fascinating to find out who, in the tourism industry, benefits the most today and who will tomorrow. No question that Chinese tourists are big shoppers of luxury goods, but do they also spend lavishly in the other sectors of the tourism industry and in other locations than their top 5 or 10 favorite destinations? That is where the anecdotal nature of the media stories fails to match with factual numbers. The numbers are up there, they are big and growing, but the media stories obscure the real picture of where most of that money goes.

Wednesday, July 30, 2014

Resorts and hotels: your office hours are wrong!

Can you answer that?
If you want more overseas guests, then change your office hours and keep your social media awake at night. Don’t be asleep when they are awake, looking at your property and but asleep when you reply, that’s 24 hours to lose the booking. Answer now and the odds are even better in the middle of the night to get that booking as they are going to be really impressed that you have staff on deck at 3 in the morning. Makes you look great!

You can do this without hiring more staff. Train, promote and empower your front desk night shift and put them to work in social media and marketing. In fact, you should have your best and brightest staff on the night shift, the ones who can give the right answer and make the right decision without referring to a manager. These are your future managers proving their abilities. Set up a system to insure that there is always someone on social media duty throughout the day, night and weekend. At one hotel, the staff has a small koala bear with a clip which is clipped to the screen of whoever handles social media now. When that employee goes off duty, the little bear must be moved and clipped to someone else's screen, so it moves around the back office, the front desk, even the GM's desk through the week and there is never any gap of coverage.

Tuesday, July 22, 2014

Legacy airlines in upheaval: Keep or ditch the economy class?

AirAsia in Thailand
Conventional wisdom says that the LCC (Low Cost Carrier) model only works for short-haul flights and cannot compete with the legacy carriers for the long-haul business. But most legacy carriers know full well that it is only a matter of time until they are challenged by the LCC on the long-haul. Already AirAsia X and Norwegian are demonstrating that conventional wisdom is wrong and that the LCC model is not limited to the short-haul business. Lufthansa is toying with the idea of creating a long-haul LCC to South-East Asia and India in addition to its regional Eurowings and its low-cost Germanwings. With Norwegian now offering low-cost service to Bangkok from northern Europe, it is obvious that Lufthansa would stand to lose some of their economy business to Norwegian.

Tuesday, July 15, 2014

Now, destinations can talk with consumers directly

Engage into the conversation!
Social media empowers destinations to reach consumers to open direct conversation channels with them. Yet few are taking the opportunity and use social media in the same way as they do with the Internet: as a window to feature their product in the best possible light. A beautiful picture with a glossy paragraph may get “likes” but few “share” as these PR styled posts do not generate comments or questions because they fail to engage the audience into a conversation. Worse yet, the most glorious paragraphs describing nothing short of paradise are likely to attract even fewer “likes” and only scant “share” as consumers recognize advertising when they see it and no one wants to share advertising with their friends unless they have a strong economic or emotional motivation to do so.

Tuesday, July 8, 2014

The metamorphosis of travel and tourism

How much mass tourism can squeeze on an island?
In the short span of a generation, travel and tourism has gone through a sweeping evolution with everything becoming easier, faster with fewer intermediaries. Wheels on our baggage, paperless travel, booking a room on your smartphone while walking in the lobby of that hotel, bringing your own lunch aboard, etc. a multitude of seemingly small changes that together have created a new dynamic causing a metamorphosis in the industry.

The flow of tourism no longer originates exclusively from developed countries as emerging countries, historically only exotic destinations, became significant generating markets in the last decade. The emergence of low cost carriers and online travel services have sent traditional travel agents the way of video stores. Tourism is now a two-way street anyone can use, mostly, without the middleman. There is still good business to be had for the middleman with groups and MICE, but in a different role of coordination rather than information and booking. Destinations and operators, once dependent upon travel agents in generating markets to bring them customers, are now reaching customers directly and taking bookings without intermediaries.

Tuesday, July 1, 2014

A short history of tourism popularity through words

The guides really dressed up back then!
A good way to check the popularity of something is to count how often people talk about it or write about it, sort of like the trending hashtags on Twitter. If you want to see the trending over several decades, way before the Internet, then the best place to look for words would be in books! Google has indexed over 5 millions books going back a couple centuries and they have a really cool application called “ngram” which lets you plot the frequency of usage of a word over a long period of time. To better grasp the concept, try the words “war” and “peace”, or “internet”, the graphs will be very obvious to understand.

Monday, June 23, 2014

Income inequality and the travel class divide

There is an unmistakable correlation between the growing income inequality in society and the increasing gap in economy and luxury classes in both airlines and hotels. It should be no surprise being that tourism depends mostly on the disposable income that is most sensitive to income disparity.

On one hand, we have the extraordinary growth of LCC (Low Cost Carriers), the shrinking seats in the now spartan economy class of legacy carriers, the emergence of branded very low cost accommodation like Tune hotels (built on the AirAsia operating model) while on the other hand the airlines upper classes are getting more spacious, with better and bigger seats, with more amenities and services and 5-star hotels up their offering, refurbish to more lavish rooms and more services.