Product differentiation by creating and packaging sustainable experiences

2. Productdifferentiationbycreating and packagingsustainableexperiences Guatemala Ciudad 10 septiembre, 2009 Presentación de Marie-Andrée Delisle, M.Sc. Consultora en desarrollo turistico www.madelis.com

3. Clarifying definitions • Ecotourism(or Green Travel/Green Tourism) • Environmental, ecological, social issues; interpretation and education activities • Eco-friendly: not harmful to the environment (nature and culture) • What about nature and adventure tourism? • Responsible tourism Having a responsible behavior and business practice, being socially-conscious (tourism businesses, service providers and visitors, local communities, partners and employees) • Community-based tourism Collective responsibility and ability to make decisions from a community standpoint www.madelis.com

4. Clarifying definitions Sustainable tourism Being aware and active in neutralizing and reducing actual and potential economic, environmental and cultural impacts of tourism In other words, it means we should look forward to a sustainable environment, to sustainable management and operations and to sustainable products and services www.madelis.com 4

5. Sustainable tourism • Based on three dimensions for long-term development: • Environmental : flora, fauna, ecosystems, etc. = observation, protection, conservation, carrying capacity + waste and energy management • Social/cultural: traditions, ways of life, heritage sites, etc. = protection, conservation, education • Economical : benefits the local population = improving life conditions; benefits the local businesses = revenues from the tourism activities • With the next generations in mind www.madelis.com

6. Sustainable tourism aspects • A product differentiation that represents : • A competitive advantage if it includes truly sustainable aspects • An excellent quality-price ratio • The ability to create memorable experiences and to educate the local population and the visitor • An awareness and tangible actions taken about: • The climate change (carbon emissions, offsets, carbon neutral) • The protection of land and culture • Best management practices and social responsibility www.madelis.com

7. www.madelis.com However… • Price and quality vs environmental friendliness • Many ecolabels = confusing • Ethical marketing vs ‘greenwashing’ • Sustainable practices must be integrated to the operations of a business : Energy efficiency, recycling, water conservation, waste management, carbon offsets, social practices, building/construction practices and purchasing policy

8. www.madelis.com Some tools • Sustainable Tourism Criteria • Demonstrate effective sustainable management • Maximize social and economic benefits to the local community and minimize negative impacts • Maximize benefits to cultural heritage and minimize negative impacts • Maximize benefits to the environment and minimize negative impacts Refer to : http://tinyurl.com/3z2wfv • Sustainable Tourism Self-Assessment Tool Refer to : http://tinyurl.com/klfo92

9. www.madelis.com Whybother to create an experience? • Innovation • Product differentiation : • being different from the competition instead of a ‘me too’ product • integrating distinct characteristics • Value-added • Exclusivity • Trend • Travelers with common interests / affinity

10. www.madelis.com Anyadvantages in creating a sustainableexperience? • Booking easiness : one-stop shop • Access to more information • Accessibilityto culture and nature • Security • Attracting • Retaining • Partnering • Word-of-mouth

11. www.madelis.com Trends… • Travelers are aware and preoccupied by their impacts while traveling but … • Travelers want authenticity and comfort • They look for security, safety and quality • They like to mix culture and nature • They want to interact with people, learn and play, taste local cuisine, try new activities • There are more and more short, multiple, closer to home, last minute reservations

12. www.madelis.com …Trends • The long-haul trips have more to do with personal interests regardless of age • The market segments are becoming more and more sophisticated • Family and friends travel to share memorable moments • The travelers use technology for researching, planning and booking

13. www.madelis.com Who should create a sustainable tourism experience ? It is a joint effort: • Creating: hotelier, attraction or activity, local tour operator, community (ex. Lago Atitlan, Peten, Chichi…) • Commercializing: local travel agency, local/national/foreign tour operator • Promoting: local tourist board, national tourist board

14. www.madelis.com Creating an experience • Fromwhere to where?When? • Based on what? • Culture, arts, food, heritage, people • Experientialitinerary / touring routes • Ecological and sustainableactivities • Nature / Adventure • With or withoutpartners? • Shoulditbepackaged? Elements to consider: transfers, transportation, lodging, food, attractions, activities + WOW

15. www.madelis.com What is considered a package? • More than one item but at one price (A hotel with a meal plan is usually not considered a package but a good deal) • A package versus a tour • Could be for hours or days • Dynamic packaging and modular trips • Deal or no deal ? • 5 key elements: WHY - WHAT - FOR WHOM - HOW - WITH WHOM

16. www.madelis.com WHY • What do you want to accomplish ? What is your objective ? • Is it based on research, on market analysis in order to identify your target market ? • Clients surveys; tourist board surveys • Trends; the competition • Tour operators’ requests or inquiries • Reports, statistics, destination marketing plan • Destination strategy, branding, etc.

17. www.madelis.com WHAT - Example of packages from… Amuseum: Museum and Cruise Package – One dayCombines visit of Pirates, Privateers and Freebooters’ Exhibition with AML’s Cruise excursion (a tour of the city on the River aboard the Cavalier Maxim). Anattraction: Tulum Archeological Ruins with Xel-Ha Natural Wonder Park – one-day package. Comfortable transportation from hotel zones included. A national park:Canoe Downriver Rapids Initiation Package One day – Includes a professional guide service, canoe, life jacket and paddles, map of the river, shuttle (return trip), dry bag for personal belongings

18. www.madelis.com Other examples A lodgingproperty:DiscoverCopan Package 3 days/2 nights - Includestransfers, somemeals, entrance to parkwith guide + choice of 2 activities (coffee tour, Bird Park, canopy tour, horsebackriding, yoga, spa) A travelagency/tour operator: Birding Package 7 days/6 nights - Includessomemeals, transfers, accommodation, private bus, local flight, guided tour. A community: Community life Package 7 days/6 nights - Includes accomodatoinvisits plus one night homestay, meals and participating in community activities

19. www.madelis.com FOR WHOM • What is your target market ? • Where are they coming from ? Is it far? Close? • Have you identified their interests and expectations? • What segments are you after ? • By profile: young travelers, mature travelers, women travelers, multi-generation, boomers • By theme: adventure, culture, nature and eco-tourists, romance, education, business, etc.

20. www.madelis.com HOW Develop the experience with the package components: • Choose the activity, the visit, the content of the theme: Ex. hiking to the Laguna Chicabal + a visit to the Abaj Takalik archeological site • Select the partners that will supply parts of the content: Ex. guide to be hired, park or site entrance fee, transportation, transfers from the hotel to the sites, etc. • Decide on the lodging number of nights: Ex. each activity will take one day, the package should be based on a 2 night/3 day accommodation • Integrate meals: Ex. breakfast and dinner at hotel; lunches provided by another partner • Sketch a schedule from the arrival to the departure time

21. www.madelis.com WITH WHOM… • Build an inventory of potential partners: • Cultural, archeological, heritage expert/site/guide • Arts expert, artist(s) • Ecological, environmental expert/site/guide • Flora and fauna expert; birding expert/site/guide • Sports / adventure expert/site/guide • Community expert/site/guide • Food, cuisine expert (chef, producer, …), etc. • Others: restaurants, transportation companies, etc. • The guide is a key element

22. www.madelis.com …WITH WHOM • Look for partners with similar quality and service standards, to enrich content and share promotional costs • Inform and train your staff accordingly • Establish written agreements with your partners (reservations, vouchers, package inventory, price guarantee, communications, payments, cancellations, refunds, etc.) • Evaluate the promotional budget with your partners

23. www.madelis.com Pricing • The pricing should always include an element that the consumer cannot evaluate • The pricing should include all the components costs • The retail price should always be on a per person basis, and on a double occupancy basis • The profit margin should be reduced whenever there is volume offered by the tour operator • The best net rate should be given to local/national tour operators; it should always be better than the one for foreign tour operators

24. www.madelis.com Pricing structure… TOTAL COSTS : $ + Profit margin (flexible*): + $ NET RATE ** to sales intermediates*** : $ + Commission or rebate to sales intermediates (between 10 and 30 %) + $ CONSUMER / RETAIL PRICE or rack rate : $ * Depending on the volume of sales given by the intermediate ** Net rate = confidential, without tax or commission) *** Travel agents, tour operators

25. www.madelis.com …Pricing structure

26. www.madelis.com Testing • Evaluating the creative experience packaged before it is promoted: • With customers • With tour operators • Evaluating the customer satisfaction once it is experienced • Customer satisfaction = difference between the expectation beforehand and the perception of the value once the product is experienced

27. www.madelis.com Evaluating results • On a three-year span • Costs versus revenues • Customer survey • Partnerships evaluation • Budgeted promotion • Results following the promotion, etc.

28. www.madelis.com Preguntas ? The next presentation will cover the marketing of sustainable packages. Muchas gracias por su generosa atención!

29. www.madelis.com References Useful websites: Networks and associations: • The International Ecotourism Society (TIES) - Uniting Conservation, Communities and Sustainable Travel • For info and membership: http://tinyurl.com/nx8d9m • Your Travel Choice Blog: http://www.yourtravelchoice.org/ • Ad of Service Summit event on TIES website www.ecotourism.org/site/c.orLQKXPCLmF/b.4835333/k.B6C5/News.htm • Rainforest Alliance: www.rainforest-alliance.org • + Monthly updates newsletters: www.rainforest-alliance.org/news.cfm?id=publications • + Sustainable Trips for a Better Future : www.rainforest-alliance.org/tourism/sustainable_trips • UN World Tourism Organisation on Sustainable Tourism: www.world-tourism.org/frameset/frame_sustainable.html • Comiturs: http://www.export.com.gt/Portal/Home.aspx?sub=Turismo • Guatemala Green: http://www.guatemalagreen.com/

30. www.madelis.com References • USTOA (United States Tour Operators Ass.): www.ustoa.com/pressroom/newsreleases/ecotourism.html • Tour Operators Initiative (TOI) or Responsible Tourism: http://www.toinitiative.org/ • REDTURS : Red de Turismo Communitario de America Latina: http://www.redturs.org/nuevaes/articulo1.php?ca_codigo=9&home=1 • Asociacion panamena de turismo sostenible: http://www.aptso.org/english/ • National Geographic Centre for Sustainable Destinations: http://www.nationalgeographic.com/travel/sustainable/professionals.html • Boletin Turistico: www.boletin-turistico.com • The International Centre for Responsible Tourism: www.icrtourism.org • Green Maps: www.greenmaps.org • The Nature Conservancy: www.nature.org • Voluntary Initiatives for Sustainable Tourism (VISIT): www.visit21.net

31. www.madelis.com References Listings : • Accommodation listings on Trip Advisor: http://www.tripadvisor.com/pages/getlisted_hotel.html • Listings on the Eco-Index Sustainable Tourism website: http://eco-indextourism.org/en/home Tools: • Eco certification Self-assessment tool – Sustainable Travel International:http://www.sustainabletravelinternational.org/documents/sustainabletourismcertification_howtoapply.html • Global Tourism Criteria - Sustainable Travel International : http://www.sustainabletourismcriteria.org/index.php?option=com_content&task=view&id=58&Itemid=188 • Rainforest Alliance: Guide for sustainable tourism best practices: http://www.rainforest-alliance.org/tourism.cfm?id=guide • Tour Operators Good Practices: http://www.toinitiative.org/index.php?id=48 • Certification for Sustainable Tourism: www.turismo-sostenible.co.cr • The Virtual Marketing Service for Sustainable Tourism: www.greentravelmarket.info + Criteria for tour operators: ttp://tinyurl.com/moy2mk

32. www.madelis.com References Green lists: • Green Travel: green-travel-subscribe@yahoogroups.com • TerraCurve.com • Planeta.com – Global Journal of Practical Ecotourism • VISION on Sustainable Tourism [travelmole-wire@travelmole.net] Various examples: • Example of Basic package + extensions : http://downloads.raileurope.com/brochure/latin_america/guatemala.pdf • Example from a hotel: Discover Copan Ruins http://www.hotelmarinacopan.com/package_offers.htm • GORP Travel – Itineraries and choice of theme http://gorptravel.away.com/xnet/one-product.tcl?product_id=118254 • Example of Adventure Package: http://www.greencostarica.com/in_pa001.html#todo • Example of Port Moresby River Adventure: http://www.em.com.pg/PNG/emtours/itineraries/EM19%20TAURI%20RIVER%20ADVENTURE.htm

33. www.madelis.com References • Example from a tour operator: Eco-Circuitos Panama http://www.ecocircuitos.com/index.php?option=com_content&task=view&id=106&Itemid=38 • Canadian tour operator GAP Adventures Packages in Central America: http://tinyurl.com/nxwe3j • Example of an eco-sustainable lodge in Ecuador: http://eco-indextourism.org/mantaraya_ec_en • Example of a lodge involving the community: http://eco-indextourism.org/en/takalik_maya_lodge_gt_en • The InterContinental hotels and National Geographic Geotourism initiatives: www.terracurve.com …. http://tinyurl.com/lsejlu • US TRAVEL & AMERICAN EXPRESS website: http://www.travelgreen.org/ • Co-branding examples: http://www.haciendachichen.com/activities.htm • Responsible travel holidays website : http://www.responsibletravel.com – see menu on left side • Philanthropy tourism: http://www.travelersgivingback.org • Carbon offsets website: http://www.carbonoffsets.org • Volunteer tourism, EcoResorts, Extreme Adventure, Active Boomers – see top menu: www.away.com

34. www.madelis.com References • GO Green Traveler / Travel Tips for the Eco-Conscious Traveler: http://gogreentravelgreen.com/green-travel-101/responsible-travel-vs-eco-friendly-travel/ • Rosalie Community Ecolodge: http://www.rosalieforest.com/rates_packages__community.php • Community Tours: www.alltournative.com Packages: • 8 day/7 night Package with itinerary: http://www.mexicoculturaltours.com/our_tours/yucatan_travel_package.html • Hotel Package, minimum 3 nights: http://www.hotelcasavelas.com/html/canopy-adventures-puerto-vallarta-mexico-pkg.asp • One-day Mayan Encounter Package: http://www.alltournative.com/tours-products/maya-encounter • La Victorine Inn – choice of packages: http://www.quebecfinestinns.com/inn-hotel-quebec/packages-les-victorines-du-lac-257_ang.cfm • Packaged tours to Guatemala: http://www.latinamericacollection.com/packages/savor_guatemala_holiday.html • Packages for women: http://www.northernedgealgonquin.com/