This article was taken from Tourism Update, 16 Sept:
Tour operators globally have been hit hard by a combination of the recession of the past few years and soaring online travel sales that are expected to double this year, exceeding US$350bn (R3.4 trillion), says Damian Cook, CEO of E-Tourism Frontiers.
Speaking at the recent E-Tourism Africa Summit in Cape Town, he said the traditional tour operator model was diminishing. “KPMG lists 49% of tour operators as in decline and 24 major tour operators bankrupted in 20011-12, including Thomas Cook. Online is regarded as the motivating factor, as well a lack of customised and dynamic travel bookings.”
However, SA Tourism (SAT) Chief Marketing Officer, Jan Hutton, believes the rapid growth of e-tourism and online travel agents will not damage or replace the role of traditional tour operators, many of whom are getting involved in the digital environment.
“It certainly is not a case of TripAdvisor and Expedia eating our lunch,” she said. “We can see a strong trend of most tour operators becoming quite digital in the way they market themselves, engage and communicate with their consumers. It is rather a case of the fast versus the slow. There are some leading tour operators that are taking the market by storm digitally and they are making a bigger dent and are getting a bigger piece of the market share because they are being proactive. The rest are in an adoption process.”
Cook agrees: “We live in an environment of constant change, which means the industry needs to adapt.” It faces the following challenges:
- 59% of all travel is now researched, booked, bought and sold online.
- 98% of people start their travel research online.
- More than 200 000 people booked trips to South Africa through online booking engines last year.
- The number of flights booked to South Africa on Expedia grew by 32% to more than 109 000 in the six months ending June 2013.
- Reviews and referrals are the number-one driver behind people’s choice of destination.
“For tourism businesses,” says Cook, “this means they need real-time bookability and e-commerce; have a strong social media presence on Facebook, Twitter and YouTube; must manage online relationships; manage and optimise conversion points; and know what they are selling and who they are selling to,” said Cook.” The online market is too crowded and too loud to be making bland generic statements. Your message needs to be unique and stand out. Sell an experience. Sell a story.”
He said customers and social media networks were driving travel, which is shaking up the industry. According to Google, only 18% of consumers use travel agents before they travel, whereas 66% consult family and friends, mostly on social media networks. Over 50% of all time online is spent on social networks; YouTube viewers consume over 3bn hours of video monthly; and Twitter gets 308 000 tweets per minute.
He said 70% of travellers posted photos while travelling, communicating to an average 200 people who know them, creating a great opportunity for the trade to reach an active audience that is constantly engaging, commenting and recommending. “Travel suppliers now need to be part of this constant engagement. The single most stupid thing you can do in the travel trade is to charge your customers for using the Internet! If it’s too expensive, put up your rates to include it!”
With 4.8bn mobile users worldwide, he said future trends focused on mobile and location-based tools, apps and sites that find information and contacts around you, post, report and relate to your content. In addition, the first wearable watch phone, Samsung’s Galaxy Gear, was launched recently, while Google is developing the first wearable spectacles with usable content.