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Touri sm Management Luiss – 2013/2014 Fabio Maria Lazzerini Direttore Generale Italia Emirates. Customers. Two main categories. Leisure Travellers Styles ? Reasons to travel ? Business Travellers Styles ? Reasons to travel ?. Consumer Consume Wish Single Transaction. User Usage
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Tourism Management Luiss – 2013/2014 Fabio Maria LazzeriniDirettoreGenerale Italia Emirates
Two main categories • Leisure Travellers • Styles ? • Reasons to travel ? • Business Travellers • Styles ? • Reasons to travel ?
Consumer Consume Wish Single Transaction User Usage Need Organization Relation Consumer vs. User
Fabio Lazzerini Business Travel in an organization • Travel is purchased to fulfill a need related to perform business activities • Purchase is a Team process in which many Company roles are involved • Purchase of travel is performed to : • Increase efficiency of internal processes • Increase market penetration through Customer interface • Attend organizational internal projects
Leisure Travellers • Individuals • Families • Friends
Less time, more time • Atomized tourism models: • Seamless relationship with job (always on) • World at fingertip • Increased accessibility of travel offers • Main trends: • Shorter main vacation time • Short breaks throughout the year
Less time, More time: consequences • Fruition of tourist destination: • Efficiency and voracity • Search of customized and theme experiences • Search for authenticity (culture, tradition, folklore, enogastronomy, etc.) • The new tourist: • Looks for an active role • Does not look for a destination: is looking for an EXPERIENCE to be lived in a given destination • Is an expert, fully aware and informed
We love chatting … • Experience is shared: • Word of mouth is the most effective promotional vehicle • Communities are playing an increasingly important role
How do tourists buy ? Digital Natives Digital Immigrants
…and the Tourism industry, as well ! Internet changed our lives ... Love affairs Banks / Insurances Shopping Music Comunication Tourism
Are we really sure ?!? Fonte: Facebook
On-line penetration in Tourism +40% +45% +42% +72% +63% +44% Source: PhoChus Wright’s U.S. Online Travel Overview Sixth Edition
28% 40% 23% 20% 17% 12% 37% On-line penetration in Europe Online Penetration Overview 2006-2010 European Travel Markets Online Penetration 2008 % Online penetration Source: PhocusWright’s European Online Travel Overview 4th Edition
Howtopromote a destination ? • Internet is the primary source of information and the second top buyingmethod • Ifyou are notvisible on the Web, itmeansyou do notexist : the typicalfragmentation and atomizationof the Italiantouristofferrepresents a weakness • Internet evolution and the speedofgrowthof Web 2.0 makes the “classic” Portals obsolete
Shades of grey 2000 2001 2002 2003 2004 2005 2006 2007 2008 Reduced commission Merchandising Selling Steering Retail Tradizionali Competition from OLTAs and direct distribution Just in time packaging Customer management Low cost carrier impact Common competition for end consumer Acquisition and growth Verticalisation Fornitori Integration and Multi-channel Flexibility Distribution cost cutting Investment in direct sales Missing content and differentiation B2C Maturity B2C Investment Agenzie on-line Expansion in non-air
TRAVEL SERVICES END USERS Providers Online Direct Distribution Generic Search engines Generic Portals Meta Search +500% Travel information Websites Generic non travel websites OLTAs Retails online Multichannel explosion
Off-line Travel Agenicies High Potential Growth Average Potential Growth Low Potential Growth Distribution Channels – status and trends + Providers Websites Meta-search Generic Search Engines Generic Portals Value for Providers OLTAs Providers – Direct Offline Distribution Niche Online Travel Information Websites Generic Non Travel Websites - - + Value for the End User Fonte: Amadeus Nota: El tamaño de las esferas es solo indicativo del tamaño real de cada canal y no está a escala
Internet: the new distribution paradigm Fonte: IATA, ICAO and Amadeus estimates. Note: Local CRS treated as Indirect.
Direct distribution Fontee: IATA, ICAO and Amadeus estimates. Note: Local CRS treated as Indirect.
Air Bookings: distribution evolution Source: Amadeus – Dic. 2006 vs. Dic. 2005 (YTD)
Travel market in USA - 2003 – 2008 (US $B) Nota: 2006 – 2008 stime Fonte: PhoCusWright Inc., 2005
Internet penetration Nota: 2006 – 2008 stime Fonte: PhoCusWright Inc., Mayo de 2006
Air bookings: trend Base Case Industry Volumes 2004-10 (in mio bkgs) Base Case Channel Shift 2004-10 (in %) CAGR 2006-10: 4.4.% CAGR 2006-10 Shift to Direct (2006-10): +4% 0.1% Shift to Online (2004-10): +9% 10% 13% 0.7% Fonte: IATA, ICAO, GDS
Internet: main functions • Visibility and Promotion • Distribution • Integrated information system • Simplification • Global reach
Global distribution trend • Travel and Tourism is the world’s largest business sector • Leisure travel is growing and will continue to grow • More people are booking online • Europeane-commerce is growing • Traditional channels are being by-passed • Airline commissions are declining / disappearing • Retailers are forced to look elsewhere for commission • Buying patterns are changing • Consolidation is continuing and is strongest online This industry is attractive but, to succeed, one needs to consolidate a broad range of content and provide online as well as offline access
4Ps and 4 Cs • … are 4 Cs from a Customerperspective: • CustomerValue • CustomerCosts • CustomerConvenience • CustomerCommunications • Kotler’s 4 Ps …: • Product • Price • Place • Promotion
Internet IS NOT just a Technology “Our economy is moving towards an Information Economy: it is time we forget to measure commerce through atoms” Nicolas Negroponte, “BeingDigital”, 1995
Web e Marketing Useof web for Marketing • Publishing • Feed-back • Service and Support • E-Commerce • Strenghts • Wide “public” • Realtimeupdates • Multimedia communication • Interactivecommunication • Hypertextualcommunication
Web asexperience • Internet allows interaction … • … and interaction generates experience • Experience is to find, to learn, to choose, to express themselves, to share. It is about feeling part of the world … in 1 click
Experiencetravelthrough the Web “Create your own travel is the first Step of your travel experience Active role of the on-line tourist The trip becomes a continuous experience, Which continues by sharing what you have seen and lived Web 2.0 42
Fromtransactiontorelationship On the web and in store(multichannel) Past relations(CRM) Participate(blog, forum, …) Profiling and customization FAQ LINK, LINK, LINK ! Attention (questionnaire, awards, etc.) NEWSLETTER Multimedia(YouTubedocet) Involvement(contests, games) Regular Updates WEB Site
Internet Marketing and Tourism • Internet and Oturism: a huge opportunity • The (Re)evolution of tourism market • Many channels … and the price ? • Viral Marketing • Value the relationship with Customer • Know your Customers
New Entrants Competitionforces Barriers to entrance Competitors (competitionintensity) Providers Customers Negotitation Power Negotitation Power Drivers to Customers’Negotiation power Drivers to substitute Substitutes