Destination E-marketing: Trends, Opportunities and priorities


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Destination E-marketing: Trends, Opportunities and priorities

  1. 1. Anna Pollock, DestiCorp Presentation, Tromso, June 4 th , 2008 Destination E-marketing: Trends, Opportunities and Priorities 06/09/09
  2. 2. Scope <ul><li>E-marketing 1.0 </li></ul><ul><ul><li>why a destination management system is necessary today </li></ul></ul><ul><ul><li>What it consists of </li></ul></ul><ul><li>E-marketing 2.0 </li></ul><ul><ul><li>Where the web is heading </li></ul></ul>06/09/09
  3. 3. The Complex Value Chain 06/09/09
  4. 4. The IN-BOUND Tourism System <ul><li>In the tourism social system there are four stakeholders: </li></ul>Destination Community 06/09/09
  5. 5. What are they trying to achieve? <ul><li>Guests wants it to be easy to find and enjoy a destination that delivers the kind of experience they seek; </li></ul><ul><li>Host suppliers want to attract suitable customers and deliver their services at a profit over an extended period of time; </li></ul><ul><li>Intermediaries want to help guests meet hosts and enable a profitable transaction; and </li></ul><ul><li>The host community wants to realize sustainable net benefits from tourism activity. </li></ul>06/09/09
  6. 6. Characteristics of the Tourism System <ul><li>Visitors do not consume products – they have unique experiences that occur in a unique moment in time and space; </li></ul><ul><li>Guests or visitors travel to the point of consumption, therefore </li></ul><ul><li>They cannot pre-test the experience or return it if it is unsatisfactory, therefore perceived as high risk </li></ul><ul><li>These experiences are multi-faceted , involving many components (accommodation, food, activities, etc.) delivered by independent parties and unique . </li></ul><ul><li>The nature of the experience varies enormously according to purpose, activity, length of stay, visitor origin and party composition. </li></ul>06/09/09
  7. 7. Characteristics of the Tourism System <ul><li>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! </li></ul><ul><li>Suppliers’ products & services are perishable </li></ul><ul><li>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. </li></ul><ul><li>Both guests and suppliers rely on intermediaries and their “distribution channels” to help them do business with one another. </li></ul>06/09/09
  8. 8. Characteristics of the Tourism System <ul><li>10. All intermediaries are “information brokers” but take different forms </li></ul><ul><ul><li>1. Destination Marketing Organizations (DMOs) </li></ul></ul><ul><ul><li>2. Other suppliers 3. Tour Wholesalers/Operators 4. Travel Agencies – online and offline 5. Press and media – newspapers </li></ul></ul><ul><ul><li>6. Technology </li></ul></ul><ul><li>11. Distribution Channels are growing in number and complexity </li></ul><ul><li>12. Increasingly they are electronic and require both guest and host supplier to become digitally literate. </li></ul>06/09/09
  9. 9. US Data – Source Terry Jones, Reardon USA 06/09/09
  10. 10. EUROPE 06/09/09
  11. 11. Automate the Value Chain! 06/09/09
  12. 12. And Reduce Friction or Pain! <ul><li>If the Destination Management System does not reduce the pain experienced by guest or host, it should not exist! </li></ul>06/09/09
  13. 13. 50% of UK buyers find holiday bookings stressful! What pain exists in the system? 06/09/09
  14. 14. Consumers have less time to do more complex tasks 06/09/09
  15. 15. How Does She Get Information? 06/09/09
  16. 16. What pain exists for Guests? <ul><li>Growing numbers of independent travelers want to create their own unique experience </li></ul><ul><li>They are having difficulty finding and assembling multiple products </li></ul><ul><li>Impossible to compile multiple elements of a trip at one time, from one web site </li></ul><ul><li>Choice is restricted to major tour operators or online agencies that rely on product delivered in the past by GDS (global distribution systems) </li></ul><ul><li>The small, unique and unusual is particularly hard to find. This is what the high yielding tourist seeks! </li></ul>06/09/09
  17. 17. Before During and After Her Visit? 06/09/09 2/3rds of the tourist experience is virtual – in their heads
  18. 18. The Guest’s Purchase Cycle – in theory 06/09/09
  19. 19. 06/09/09
  20. 20. How Does the Supplier Reach Her? <ul><li>Print - brochureware </li></ul><ul><li>Print – classified or glossy ads in print media </li></ul><ul><li>Web Site – static or dynamic descriptive content </li></ul><ul><li>Web Site with inquiries (email) </li></ul><ul><li>Web site with booking </li></ul><ul><li>Via other sites run by Destination, Third-party agencies (Expedia, Opodo), other suppliers, Tour Operators </li></ul>06/09/09 When…..
  21. 21. 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…… 06/09/09
  22. 22. Or When She Pays Less Attention? <ul><li>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) </li></ul><ul><li>78.2% of Germans are irritated by advertising, only 24% actually still watches it ( GfK Marktforschung) </li></ul><ul><li>54% of US consumers avoids products & services which “overwhelm” with advertising (Yankelovich Partners) </li></ul>Source: FutureLab 06/09/09
  23. 23. Or is simply overloaded? 06/09/09
  24. 24. What pain exists for the HOST? <ul><li>Host suppliers sell and deliver only one component of a guest experience </li></ul><ul><li>Distribution costs – especially into international markets - are high (25-40%) </li></ul><ul><li>The product is perishable – cannot be re-sold or returned. Difficult to unload distressed inventory. </li></ul><ul><li>Distress leads to discounting. </li></ul><ul><li>Discounting leads to paper thin margins </li></ul><ul><li>At the same time, suppliers must deal with….. </li></ul>06/09/09
  25. 25. More Access 06/09/09
  26. 26. More Traditional Channels * Before digital radio and podcasting, Not counting blogs, face book and myspace pages 06/09/09 1960 2003 * Radio Stations 4,400 13,500 Magazine Titles 8,400 17,300 Channels per home 5.7 82.4
  27. 27. 200,000,000 blogs 1.8 million residents >100,000,000 videos (65,000/day) 21 Nov 2006 14,463,346 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 06/09/09
  28. 28. And there’s more! <ul><li>Host suppliers sell and deliver only one component of a guest experience </li></ul><ul><li>That product is perishable – cannot be re-sold or returned. Difficult to unload distressed inventory </li></ul><ul><li>Distribution costs – especially into international markets - are high (25-40%) </li></ul><ul><li>Inventory: Allocation and Management </li></ul><ul><li>Changing e-commerce practices and trends are hard to follow </li></ul><ul><li>Fear of costs and time to develop new skills </li></ul><ul><li>Hard and soft-ware acquisition choice and costs </li></ul><ul><li>Incompatible systems </li></ul>06/09/09
  29. 29. Introducing the DMS Puzzle! 06/09/09 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
  30. 30. 1A. Content Creation <ul><li>SCOPE </li></ul><ul><li>Product Listings with search capability </li></ul><ul><li>Product Inventory & Availability </li></ul><ul><li>Place Content </li></ul><ul><li>Reviews </li></ul><ul><li>Ratings </li></ul><ul><li>FORMAT </li></ul><ul><li>Descriptive Text, Multi-lingual </li></ul><ul><li>Numerical data (rooms, prices/rates, commission rates, nights, pax) </li></ul><ul><li>Images (still & video) </li></ul><ul><li>Maps, GIS coordinates </li></ul><ul><li>Tags </li></ul>06/09/09
  31. 31. 06/09/09 Hotel site
  32. 32. expedia 06/09/09
  33. 33. 06/09/09 Trip Advisor
  34. 34. 1B. Content Aggregation <ul><li>RSS/XML FEEDS </li></ul><ul><li>Default Feeds – International and local news, weather, sports, entertainment </li></ul><ul><li>Supplier or third-party feeds – special offers, directories, events calendars, image galleries, streaming audio and video </li></ul><ul><li>User feeds – reviews, ratings, blogs, images, videos aggregated from external sites such as TripAdvisor, Flickr, Travelistic etc. </li></ul>06/09/09
  35. 35. 1C. Content Distribution (Publishing) <ul><li>CHANNELS </li></ul><ul><li>Supplier Web Site & e-newsletters </li></ul><ul><li>Destination Portals </li></ul><ul><li>Third-party web sites and portals: </li></ul><ul><ul><li>Online agencies: Expedia, Travelocity, </li></ul></ul><ul><ul><li>Other suppliers (tour, ferry , airline, train companies) </li></ul></ul><ul><ul><li>Media: newspapers and magazines – on and offline </li></ul></ul><ul><ul><li>Banner and classified advertisements </li></ul></ul><ul><ul><li>Directories (Yellow pages) </li></ul></ul><ul><ul><li>Travel Community Sites (Trip Advisor, Real Travel, WAYN) </li></ul></ul><ul><ul><li>Social Media Sites (Facebook, MySpace) </li></ul></ul><ul><li>Kiosks </li></ul><ul><li>Hotel, airline TV </li></ul><ul><li>Mobile phone channels </li></ul>06/09/09
  36. 36. 2A. Processes - Transactions <ul><li>TRANSACTIONS </li></ul><ul><li>Inventory Allocation and Management </li></ul><ul><li>Booking Inquiries </li></ul><ul><li>Booking Transactions </li></ul><ul><ul><li>Accommodation </li></ul></ul><ul><ul><li>Tickets: tours, transport, events </li></ul></ul><ul><ul><li>Table Bookings </li></ul></ul><ul><li>Other sales (souvenirs, books, merchandise) </li></ul><ul><li>Information/brochure downloads </li></ul><ul><li>Customer support (call centre) </li></ul>06/09/09
  37. 37. 2B. Processes - Metrics <ul><li>PERFORMANCE METRICS </li></ul><ul><li>Content (browsers, page views etc) </li></ul><ul><li>Distribution (Search Engine Optimisation) </li></ul><ul><li>Transaction (value of booking, sales) </li></ul><ul><li>Commerce (inquiries, bookings, “look to book” ratios </li></ul><ul><li>Consumer metrics </li></ul>06/09/09
  38. 38. 3. Community <ul><li>USERS </li></ul><ul><li>Identity </li></ul><ul><li>Profiling </li></ul><ul><li>Sign On </li></ul><ul><li>Access Rights </li></ul><ul><li>CUSTOMER RELATIONSHIP MANAGEMENT (CRM) </li></ul><ul><li>Business CRM (directory of suppliers, members) </li></ul><ul><li>Customer CRM (database of inquiries, customers) </li></ul><ul><li>COMMUNITY </li></ul><ul><li>Destination Extranets </li></ul><ul><li>Visitor/resident Communities </li></ul>06/09/09
  39. 39. TIPS FOR AND ABOUT THE FUTURE <ul><li>Think like an alien! Make it easy for the stranger to explore, plan and reduce that perceived risk </li></ul><ul><li>Content must be created and maintained as close to the source as possible Create content locally, distribute globally </li></ul><ul><li>Sort out roles and responsibilities – don’t compete with each other unnecessarily Make it easy for the host supplier to sell and serve </li></ul><ul><li>One web site is not enough (see next slide) Each trip is a unique “event” </li></ul>06/09/09
  40. 40. One web site is not enough 06/09/09
  41. 41. TIPS FOR AND ABOUT THE FUTURE <ul><li>5. Focus on the content that enriches the experience Take care of the long tail </li></ul><ul><li>6. Make it easy every step of the way Go the full circle of the purchase cycle </li></ul><ul><li>7. Enable and encourage everyone to be an intermediary Dustribution, distribution, distribution! </li></ul><ul><li>Don’t forget the purpose is to attract - add color, sound, enrich your palette, make it fun, compelling Colour my world! </li></ul><ul><li>Interact in order to make it personal </li></ul>06/09/09
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  46. 46. Let the Locals Do the Talking 06/09/09
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  48. 48. Resident Blog 06/09/09
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  54. 54. Thank You! <ul><li>Anna Pollock President DEST i CORP UK </li></ul><ul><li>Anna.pollock@ </li></ul><ul><li>+44 1544 388 400 </li></ul>06/09/09