Tracking Tourism: The Tourism Research Blog Archive for the ‘Industry interview’ Category

I spoke recently to Ian Yeoman, formerly Scenario Planning for Visit Scotland. As Ian is in the process of taking up a position at Victoria University, New Zealand, and has recently published Tomorrow’s Tourist, it seemed a good time to catch him to get his views on where industry is heading.

Anyone who has seen Ian speak will know that he does not speak from an ivory-tower but rather in a very accessible way on what could be a dense topic. And the book is little different – it’s aimed at business and planners within the travel and tourism sector definitely not a scholarly tome designed to gather dust.

Although Ian mentioned that Scenario Planning was a little like science fiction, I don’t think we should interpret this as meaning that what he does is a flight of fantasy. On the contrary, his work is backed up by a lot of empirical research and this one of the reasons why it is worth paying attention to him.

It’s important to note that at the outset that Ian’s work concentrates on the changing nature of the traveller. While this obviously has implication for how the supply side of the industry meets that demand, his work is not about the development of the supply side per se. Instead he looks the changing picture of demands, desires, constraints and impacts that the traveller and thereby the travel industry may face.

Ian’s work offers predictions through to 2030 but this interview concentrated more on the short term issues that we could be facing. For those of you wanting to find out what happens next, you’ll just have to buy the book.

So what is changing for the traveller and what are the implications?

While it is tricky to condense the whole conversation down into a couple of lines, I’ll start by trying to do just that.

• We are moving from a world of seemingly unlimited opportunity through to a world of constraints. These drivers are largely external leading to constraints that are economic, environmental, political and moral in nature.
• The growth of tourism will not stop – although it might be slower than it has been.
• The traveller will want more in less time or with less effort – this has implications for everything from the format of events through to booking processes and the nature of breaks.

Before this becomes a shopping list of changes, lets take those points and develop them more fully.

We are entering a world of constraints

It will have escape no-one’s notice that the economy is not as robust as it once was. And, although there is still resistance in some quarters about the degree to which climate change is attributable to human activity, governments are acting to lessen its impact whatever the cause. On the home front, we notice that our disposable income doesn’t goes as far as it did, say, 18 months ago. We notice that the cost of travel is rising, both at the immediate level of our cars and at a wider level.

When Ian described this as “leaving a world of low inflation – moving to an era of constraints”, it suggests that this is not just a short term blip on a historically inevitable rate of progress but rather a longer lasting change of pace.

“The consumer is being squeezed by rising prices and falling levels of disposal incomes, as a consequence out of home expenditure will fall. In the short term, rural Scotland will feel the pinch rather than Glasgow/ Edinburgh / Aberdeen. Leisure spending will fall but business tourism in cities will remain robust in the short term. The middle classes are the market that is going to be effected the most.”

We have been in situations like this before though, most notably in the oil shocks of the 1970s. In the case of the 1974 oil shocks, the economy rebounded swiftly but the problems of the79-83 took a lot longer to recover from.

It should be noted that the constraints are not just economic but political as well as governments make move to combat climate changes and other examples of environmental degradation.

On a positive note, Ian noted that we are more fuel efficient today than in the 1970s – our cars do more miles/kilometers to the gallon/litre for example. In the medium term, he sees coal and nuclear as the only realistic players in the energy market but acknowledges that the political and environmental issues surrounding this are immense and are constraints in themselves.

However, although ‘grid’ power could be delivered through coal/nuclear energy generation, the fact still remains that the vast majority of transport in the UK is oil based which will have an impact on people’s willingness to travel longer distances by car in a time of rising prices.

Some other examples of constraining factors include:

• Environmental constraints: Some destinations start to become too hot to visit on account of climate change – the eastern and southern Mediterranean countries particularly will be challenged under this scenario. In other areas, decisions will be made to limit the number of visitors on account of their impact on a sensitive region (I suspect that Antarctica cruises might be see this)
• Moral constraints: Ostentatious luxury will be frowned upon in some travel sectors – Ian noted that there was a trend for businesses to meet in ‘misery locations’ that sent a clear message that money was being spent on doing business, not having fun.
• Cost constraints: Airlines will protect revenue by reduce capacity. Effectively, this would mean that we could go back to 1990s style prices for some of the less profitable routes.

The growth of tourism will not stop – but it might slow down

Ian discussed two scenarios - one in which demand is not constrained and one in which it is. His estimate was that under the scenario where there is no limiting factor on growth, then we could be looking at around a 3.4% rise per year leading to 1.9 international arrivals by 2030. However, in world of constraints, that growth rate would slow to 1.2-1.5% per annum, resulting in 0.8 billion fewer arrivals by the same data.

How the constraining factors affect visitors

But how will the present situation affect the travel industry? Well, I’ll detail a few of Ian’s predictions below but I think they can be summarised as, ”travellers will want more from what they can get.” This shouldn’t be immediately interpreted to mean (for example) that travellers will want 2 meals for the price of 1 as standard but rather they will want to seek travel options that enable them to do more in the time they have available to them and this has implications for the process, products, promotional and logistical aspects of the delivery of travel.

• Proximity of destination to home will rise in importance

In a post on peak oil tourism a while ago, I speculated on whether local destinations would again become popular. Ian answer suggested that local destinations would indeed become more important but probably not in the way that many of us might imagine it. 30 years ago, ‘local’ would have suggested ‘domestic’, it now suggests ‘regional’ and regional should be understood as being within a three hour travel zone. Therefore, from a UK perspective, Paris, Athens, Tunisia etc are local.

The driver behind this shift to local is that the traveller does not want to waste their precious break (or indeed their work time) travelling. If they can only afford to take 5 days break, they do not want to spend the equivalent of 2 days travelling.

This has a number of implications including:

• A rise in city breaks (but only if they offer good transport links)
• A fall in rural breaks in remote areas
• A fall in long-haul customers.

It should be noted that city status does not guarantee that an area remains attractive to potential travellers – the important thing will be its accessibility and it’s role as just one of many competing destinations. From a Scottish perspective, the ‘local’ nature of Edinburgh and Glasgow to London will be no guarantee of their status as major tourism centres when the London customer has a choice of the whole of Europe from their local airports and international rail terminals. It should also be noted that good transport links extends not only to the nearest airport to the destination but also the connection between the terminal and the end destination.

• There will be complex customer strategies of trading up and down

Although there will be a move in time of economic challenges for people to seek cheaper and better value accommodation, the picture isn’t a simple as everyone suddenly deciding that 5 star hotels are beyond their budget. Ian noted the tendency for some people to trade up – but only if they could trade up to their first choice of hotel (for example). And if this first choice were not available, then the visitor would trade down - meaning that the choice would be between Gleneagles or the local Travelodge.

This reminded me of a paragraph from a recent edition of the Wall Street Journal, discussing Walt Disney Co’s recent performance “[Chief Executive] Mr. Iger said one factor helping the company during the downturn - as opposed to previous economic slides like the one in the early 90’s - is that 75% of our hotel product is “moderately priced”or “value priced”. In 1991, over 55% of the rooms were considered “premium priced”. Our portfolio of rooms is more accessible.

The article also notes the impact of the weakness of the dollar leading to a) an influx of visitors from overseas and b) “US residents looking to avoid the high cost of travelling abroad are visiting the domestic parks instead.”

Ian said he thought that families especially were looking to trade down at the moment and that accommodation that was ‘difficult’ to book would suffer and this point is discussed more fully in the context of the next bullet point.

I found this observation about the how people trade down interesting because it obviously applies in some markets but not others. As we discovered recently, in some markets trading up is seen as a necessity as it is a hygiene/standards factor – people simply do not trust a three star in that area to be of comparative quality and so ensure that they are getting decent hotel by booking a five star.

Ian used a couple of examples to illustrate how activities re adapt themselves to a world where people are unwilling or unable to divert as much time to that activity that previously.

You see it in sporting events. In cricket the move toward the 20Twenty format (essentially a cricket match lasting about 3 hours instead of 3-5 days) reflects how people want the experience but want to be able to have it in a condensed form to fit in with their busy lifestyles.

Ian pointed to the importance of quicker booking and check-in processes as being something that issued from the same impulse – cutting down on the ‘hard’ parts of the travelling experience to maximise the pleasurable or profitable parts.

From a Scottish perspective, Ian thought that B&Bs will lose market share to budget accommodation due to their lack of ecommerce. “Only 4% of accommodation providers in Scotland operate a dynamic on line reservation system like Easyjet. Many SME’s still only have website that effectively says, “Please make a reservation and we will contact you the next day.” In today’s society the consumer won’t wait.”

Many SME’s still only have website that effectively says, “Please make a reservation and we will contact you the next day.” In today’s society the consumer won’t wait.

He also cited the City of York’s outside gallery as an example of allowing visitors access to culture ‘on the hoof.’

So who’s getting it right?

There will continue to be destinations that are approaching these challenges in the right way. Ian cited the following as examples of the right approach:

• Scotland: Scotland has invested in research and understanding its customers to an extent unrivalled by most other areas (and my own experience suggests that this is the case also).
• Vienna: Vienna (and Austria as a whole) also collects great visitor data and Vienna has a really strong emphasis on delivering quality to the MICE market.
• Las Vegas: Vegas is a hedonism hotspot and well positioned to exploit gambling opportunities coming from Asia

Additionally, some niche markets will continue to do well but other broader markets will struggle. This shouldn’t be understood as meaning just destinations but also visitor segments – for example, single people travelling in a group.

Ian’s message for operators and providers is simple. “Overall, this means that business needs to know the price elasticity of consumers - using a process of segmentation - some consumers will continue to pay a premium.” In other words, you need to know your customers inside out and really ‘up your game’ when it comes to customer intelligence as there will be people out there who will pay for good value. Obviously a lot of big players do this already but, from a personal perspective, I fear that there is a lot of the market who view the notion of understanding and identifying the tolerances and desires of distinct customer types as something akin to a science beyond their grasp and not worth attempting.

There will also be parts of the world that continue to be profitable. We suggested Canada would be a beneficiary of the fuel rise in a post a while ago and Ian added Aberdeen to this list on account of its status as the home of North Sea Oil.

So, what does this mean?

I think the thing that history tells us is that, although circumstances can look similar and indeed share similar traits, no period will be exactly like a previous period. So we will not be going forward to the past to 1974 or 1979 and here are a number of reason off the top of my head why this will be the case:

• Tourism and Travel have grown since the 1970s and so we live in under a completely different set of circumstances than those experienced at that time. Put simply, we are standing in a different place and that is not one characterized by 1970s travel levels and expectations.
• Technology plays a more integrated and personal role in the process of travel and tourism than it did in the 1970s and we can expect this to remain the case – the internet will not be ‘un-invented’ any more than commercial television was ‘un-invented’ in previous times of economic scarcity.
• The demographics are different – we are about to experience the mass retirement of the baby-boomer generation for example.
• Markets are more free now than in the 1970s

So the constraint of ‘only’ going to Milan for a break instead of a break to Vancouver will be the equivalent of someone in the 1950s only going to Blackpool instead of going to Paris

It is clear that some providers will need to fight harder for their customers. My take on it is that knowing your customer and the whole market in which you operate will be key to navigating these waters. Reading a book like Ian’s or blog like this are part of that process but understanding the customer and their trends needs to be ingrained within the tourism industry even at the smallest level. To navigate these water blind would be to immediately operate at a competitive disadvantage.

---

I would just like to finish the post by thanking Ian for his time with this post and to wish him the best in his new position in New Zealand. I suspect, though, that we haven’t heard the last of him!

Industry interview with Tina Fitch of EzRez

As we recently explored in this Travel 2.0 post, many of the recent online innovations driving Travel 2.0 have been demand led and consumer facing. The “killer-app” for the supply side, the thing that will improve the lives, productivity and profitability of travel and tourism businesses has seemed more elusive.

But as I have stated before that I see massive opportunity on the supply side of Travel 2.0 in delivering:

1) Joined up visitor data at a destination level (who is visiting, where do they go, what do they do, how does the whole consumption process look across a destination)

2) Cross sector/cross destination reservation analytics (ie supercharged benchmarking, predictive analytics and responsive pricing based on what is happening in the whole market, not just at the door of one attraction, hotel or destination).

Given that I’m currently in Silicon Valley, I’ve been catching up with leading travel technologists who are working to drive supply side value from Travel 2.0 technologies in these specific areas.

It was a great pleasure to catch up with Tina Fitch co-founder and CEO of EzRez Software to kick around some ideas and enjoy some fine San Francisco cuisine.

Tina leads a company which venture capitalists claim “is disrupting the online travel market through its next generation, web-based solution.”

EzRez is in essence providing a travel market place, supplying transactional services to a network of tourism businesses, along with deep analytics across that network that allow clients to get an end to end view of a visitor’s transactional behaviour.

Its software solutions include a plug-and-play solution that enables a company to sell travel components online, plus they bring inventory providers and distributors together through a system that syncs with the existing infrastructures of both parties. They have also developed a powerful set of analysis tools that allow businesses to drive deeper understanding and metrics from their loyalty points and transactional/merchandising data - and these tools integrate with web analytics products such and Omniture and Google Analytics.

Tina and her team of developers, business data analysts and travel specialists see the value of what they can offer in terms of the power of viewing a visitors booking behaviour not simply in isolation, but across the multiple travel experience touchpoints - from booking flights and travel packages, to car hire and attractions.

Because regardless of what a visitor may say about their intent, travel plans or intended purchases or expenditure (if you can even get that information) - nothing gives a clearer picture of visitor activity than the associated purchase trail.

She has the tools, she has the transactional information - now as EzRez grows, particularly fuelled by success in the Latin American and Asian markets, Tina is demonstrating to the industry in true Travel 2.0 terms that joining up their visitor data will reap rewards for everyone.

Tina took the time to demonstrate why this is so important and what the challenges of joined up data have traditionally been for the travel industry:

Vicky: Do you think that so far the travel sector has been slow to embrace web analytics and online business intelligence, compared to say the e-commerce sectors?

Tina: We do feel it has been slow – but not for lack of interest or desire from the travel community, but due to the fragmentation and complexity of the systems that power travel.

We have observed companies who embrace the concept of web and transaction analytics, but have a difficult time weaving the two together. It involves the challenge of tying something like Omniture or Google Analytics to their reservation system, and potentially their CRM program. Many of these tools can play well together, but need technical expertise and analysis of each system to have them really hum.

Many technologies in travel developed originally as silos – some are large, like Sabre, some are extremely narrow, like a car hire company’s proprietary database – but regardless of size, they are limited by lack of a common interface, tracking tools, and definitions across the industry.

In any event, our experience in the market place is that nearly everyone is looking for an analytics solution to help drive their business forward. Understanding of not only one’s own business, but the local market, competitive set and overall network performance is critical to the success of any analytics program. Most importantly, data must lead to actionable steps to capitalize on the insight gained.

Vicky: Given that travel is a sector where many different businesses interact to deliver the visitor their end to end experience, do you think the industry has to start looking beyond its own “data island” in order to best understand visitor behaviour and boost ROI?

Tina: Travel companies are frustrated by lack of context to the data that they can collect on their own site – even if a company understands what their own conversion rates are, or what types of customer profiles are purchasing which destinations or inventory types, it can not see how that positions them in relation to the rest of their industry segment, geography or even online travel overall.

Travel companies can also have a difficult time understanding how their own customer interacts with other systems, products and services outside of their silo. This is because there are few common platforms that give visibility to performance across different verticals, different locations and product types.

Why is this important? Without measurement, there is no management of your business – and without context to more global measures of success, you are isolating yourself to limited benchmarks for performance.

Without understanding how your customer shops and books travel wherever they are, you can’t determine ways to get broader share of wallet from the customers who already shop with you. Industry-wide, or more granular sub-set analytics, will give you a lot more information that can feed into your pricing, merchandising, and marketing strategies.

While privacy will always be a consumer concern, those same consumers have come to expect that a system is intelligent enough to factor in their location, basic preferences and previous habits – even on a generic level – to deliver the most relevant results.

Vicky: Could you tell us a little about how EzRez has developed this cross-network approach?

Tina: We work with a whole range of companies - such as legacy airlines, global financial institutions and hotel chains as well as boutique resort operators, regional wholesalers and niche travel sites.

Our position as the booking, rules and transactional engine across these different verticals, markets and inventory sources allows our clients to leverage greater visibility across their own activity, but also allows them to understand how they are performing against the network as a whole.

This gives EzRez customers a new level of network transparency that enables them to see consumer and agent shopping and buying dynamics and trends more quickly. This, in turn, gives them the chance to have the right product in the right place at the right time – and at the right price. This can drive real revenue growth and customer satisfaction.

Vicky: Is EzRez only relevant to the global players or are you also targeting the smaller businesses that represent the bulk of the industry in terms of providers?

Tina: We tend to focus on companies that have an existing, captive audience since they can best leverage the range of tools and products that we offer. Large companies absolutely need business intelligence tools to learn how they can move the needle on their revenues.

However, smaller companies gain by understanding untapped potential in the market, and using data to make strategic and metrics-driven decisions on where to focus their emerging business. So, we are also relevant to local players trying to capitalize on market conditions while learning from similar companies in other markets.

Vicky: How do you think travel and tourism businesses can stop using data to “look back” and start using it to make forward looking tactical and strategic decisions?

Tina: This is the really exciting part about network analytics - when you can apply historical and current activity to predict or influence future behavior.

Imagine if you, as a travel company, knew that even though many competitors traditionally offer packages from London to Istanbul in the month of March, you have started seeing increasing patterns of search and booking activity from that origin market into Dubrovnik? What if you could further target the opportunity by understanding what the average spend is in that destination, what rating level is most popular for hotels, and then offer an automated merchandising tool to not only preference that offering to people who come to your site, but also send that package proactively to an audience from that origination point?

What if you are an airline, and you have a system that logs click-through and purchase behaviour on specific hotels in your hotel engine based on city pairs searched, or even which day of week or fare class air bookings are made. You could take that intelligence and offer a cross-sell tool in your air booking path that immediately offers up the most popular hotels for that user profile automatically and capture higher conversion and share of wallet from the same consumer.

This type of application of business intelligence not only drives more revenue to the companies who leverage it, it engenders more loyalty by way of convenience to the consumers who shop with them.

This type of business intelligence is actually already possible to obtain if you are on a platform like EzRez, and we are seeing more and more companies participate and benefit from that type of tribal knowledge.

To conclude

Predictive analytics used to be the holy grail for sectors like online retail and financial services. But tools evolved that started to allow online sellers to show first adverts then actual product offers/combinations based on likely best performance, all driven by the analytics data. Companies like Amazon have massively increased upsell by investment in their recommendation engines - essentially by pioneering predictive analytics.

What is exciting, in my view, is to see this emerging in travel in the way that EzRez are driving it - which is across a network of travel and tourism businesses operating in different touch points of the same visitors experience. Analytics is therefore not occurring in isolation (never ideal for an industry where the purchase and consumption process is as fragmented and complex as travel).

As Tina describes it, network analytics means participation in and benefit from a type of tribal knowledge. Sounds a lot like supply side Travel 2.0 to me!

Well, while Vicky was blogging at Tourism Innovation Day, I was doing the hard work out front…

Actually, it wasn’t hard work at all as my role was to interview Malcolm Roughead of VisitScotland about how they use research - the only hard part was making the session sound fresh four times in succession but I think we managed it well! I’d spoken to Malcolm a few times in advance of the event but I found that, even in the sessions, there were new insights coming out and I thought I would use this post to share with you the ones that most struck me.

• As a researcher, you often get excited by the insight that your data is revealing - its the sexy part of the job and the one that you think will most please the client. However, the savvy client is looking at the data from a slightly different perspective - to minimize risk. This reminded me of a similar insight I came across recently - good research enables you to gamble more effectively.
• Malcolm also mentioned the ‘Six ‘i’s’ they use in the research process:

1. What’s the Issue?
2. What Information do we already have about it? (This stage could reveal that there is no useful data and so new data needs to be collected)
3. Does this information contain any Insight - anything we didn’t know already?
4. What are the Implications of it? How does this affect our business?
5. Implementation - what am I going to change in the business to turn this research into activities?
6. What was the Impact? (Essentially this is evaluating what has just happened)

Other interesting conclusions were that customer research doesn’t need to be high-tech in order to be successful - a pen-written record of individual customer characteristics can be as powerful for a small operator in driving repeat business through personalized direct-mail as intense statistical analysis can be for large multinationals.

My feeling from Tourism Innovation Day though is that although research is seen as a necessary activity by tourism operators, I still feel that there is considerable scope to take it forward to the next level and integrate it into smarter sales strategies. I don’t mean by this simply identifying profitable market segments but also issues such as yield management and making points of interaction (such as booking systems) more meaningful or simple for the customer.

Being an interview host, as I say, limits your interaction with the other sessions at the conference. So if you were at TiD and think my thoughts in the last paragraph were actually covered in other sessions, do use the comments section to let me know!

I spoke to Sue Crossman, Director of the Edinburgh based Tourism Innovation Group, last week about the forthcoming Tourism Innovation Day and the work the Tourism Innovation Group (TiG) is doing.

For those of you who are not aware of TiG, it is a Scottish tourism industry body led by the private sector dedicated to improving the quality of the Scottish tourism sector though innovation.

What this means at a practical level is that TiG stimulates, facilitates and leads debate on how Scotland’s tourism operators can improve their offering - whether that is demonstrating to an industry the importance of ‘green tourism’ or in showing operators practical ways to process customers using new technology.

As part of that ongoing process, Tourism Innovation Day is TiG’s yearly showcase event - with the theme this year being Technology and Tourism.

I think there is a recognition in the Scottish Tourism industry that many businesses are not taking full advantage of tools that could enhance their business. And for Sue, this is an important reason to come to Tourism Innovation Day:

“There’s a low uptake of new approaches in tourism – whether that be in new products or innovative processes and the Tourism Innovation Day should be a interactive showcase for the wider tourism community to learn why this stuff is important and how it can change their business.”

But Sue also stressed that this wasn’t just a case of seeing the latest gizmos, “I would like to think it will help Scotland’s tourism sector become more effective in telling its story as well as making it easier to access the great products.”

We also discussed how Tourism Innovation Day at Hampden Park is itself taking an innovative approach in that the old conference format of a series of sequential speakers has been played around with. There will now be sofa discussions with industry leaders and experts and, more importantly, time within those sessions when the audience is encouraged to approach the speakers and experts for informal chats and to really pick their brains.

Speaking as an interview host for one of the streams, this approach seems both exciting and a little nerve-wracking – possibly as all good innovation should be!

There will be four of these ‘expert’ streams – Look & Book, On the Ground, Feedback & Research, and Returners and Business Systems. Each will have around 6 experts as well as a main speaker on hand. The aim is to get everyone attending each of the sessions at some point in the day – although I think Sue is threatening to mark the end of each session by borrowing one of Hampden Park’s referee whistle. Main speakers this year will include Ben Vinod, Chief Innovator for brands including lastminute.com, Holiday Autos and travel community IgoUgo.

As well as me hosting sessions, Tracking Tourism’s Vicky Brock will also be one of the experts on hand to speak about new media and research opportunities in the Feedback and Research stream. We’ll both be blogging from the event so if you are approached by someone with a video camera on the day, have a good memorable quote ready for us!

Booking details of the Tourism Innovation Day on 28th February can be found here and, if any of you can make it, I would urge you to attend a great day out.

Finally, Scottish tourism providers are invited to contribute to our 2008 Scottish Tourism e-Business Survey at http://www.scottishtourismsurvey.com/ - it would be great if we can get a good sample in advance of Tourism Innovation Day to really inform the debate.

View our Tourism Innovation Day preview video interviews

(Videos will open in a new window)

1. Robin Worsnop, Chairman of the Tourism Innovation Group, on why the Tourism Innovation Day is a must

2. Tourism Innovation Day host Stephen Budd talks about why customer feedback is important for tourism businesses
3. TrackingTourism’s Stephen Budd talks about the Feedback and Research workshop sessions he will be hosting, featuring speaker Malcolm Roughead.
4. Tourism Innovation Day exemplar, Gilbert Summers of ExtramileScotland talks about positive user reviews

Former VisitScotland marketing analyst counting new success in Cromarty

Sutor Creek café, in the town of Cromarty is a bustling tourist hot-spot in summer. Unlike some Highland establishments, it remains open in winter, where it is at the heart of a dynamic local community, hosting films, salsa dancing, the book club and other events. Sutor Creek is owned and run by Colin (pictured) and Sarah Munro who took over in June 2007.

But prior to his training as a chef, I knew Colin in another guise: as a web and marketing analyst for Scotland’s national tourism marketing body, VisitScotland. In fact, Colin was pretty much the only other web analyst in Scotland at one point, meaning we had a lot in common!

So I caught up with Colin to find out how the transition from tourism marketer to tourism business has been - and what data he is measuring these days.

But first, I had to understand why anyone would abandon beautiful data and lovely trends in order to become a chef.

Colin explained: “I’m quite an impatient person. And measuring marketing campaigns and activity, and to understand those impacts – which was my job – is very hard and often slow. You’re always striving to measure impact, but in reality that is very difficult to gauge.

It is not always possible to clearly see the responses to what you’ve done, even after a period of time. So, I think that is why I was attracted to the action-response model that a restaurant business like this offers. There is this terrific immediacy in customer response when you are serving them food. And, of course, I love cooking!”

Well, as an analyst myself, that makes sense. It also confirms my theory there is a direct relationship between the complexity of data and the quantity of food required to resolve it.

Did previous experience at VisitScotland help in the running a tourism business?

Sutor Creek was already a successful going concern when Colin and Sarah bought the business, so they weren’t starting from scratch. From the very start, they realised that rather than concentrating on marketing, they had to focus their efforts on getting the core product right – specifically food and service.

“Our philosophy was to concentrate on the core product, so marketing was a little bit at the back of our minds. And that was deliberate as it would have been all too easy to get carried away doing marketing, which was something I was comfortable with and I liked, and not spend enough time on those areas where we had more limited experience”.

Colin strongly believes that getting the product right in terms of quality will generate good word of mouth that will greatly assist marketing efforts. The café is featured in the new edition of Scotland The Best, for example. He’s also employing varying techniques, such as events and email marketing, that would not of been out of place in his VisitScotland days.

But where his VisitScotland background has really helped, he says, is in understanding what the organisation actually does, and how they as business benefit from that.

“The Dutch and German people who turn up here in Cromarty are a direct result of what VisitScotland do. It is their business to market Scotland abroad and to act as a resource for visitors once they’re here. A lot of businesses don’t see that.

I know they are not here to market my individual business. But I am aware that they offer another route to market, if its appropriate and if I choose to advertise. For example, they are setting up a café trail, which we’ll be part of and that will be a great piece of promotion.”

So how much of a role does research and analysis play in daily life now?

As with almost every tourism business we talk to, it’s revenue and the related metrics that are the priority for the business.

Sarah’s background is in finance, so they’ve done lots of work on cost of sales and staffing cost so they can quickly determine which days of the week are worth opening. “By keeping a close eye on the data, we can make a decision and act on it fast. For example, we quickly realised there was no point being open on a Thursday night in winter”.

Web analytics hasn’t been abandoned (see the part 2 video interview for more), but the reality of the long hours and intensive summer season means that right now wider research and web measurement is largely a winter activity for the business.

And Colin adds “You get such good anecdotal feedback when you are this close to the customers, that right now, that’s my customer research. If we got people focussing more on handing out comments cards, for example, we could lose their focus on quality service for little additional research gain.”

Happily, Colin’s analytical streak is as strong as ever. He explains, “we’ve been meticulously recording all sorts of data – so once we’ve run a full year we’ll have like for like for comparison. And that will be really interesting to see if we’re growing the business!”

It was great to catch up with Colin and to see him and his wife really putting everything into growing what is both a tourism and community business. I wish them every success. And believe me, if you’re ever in the Highlands its worth making a detour via Cromarty to check out Sutor Creek!

Video interview with Colin part 1 - how have the first 6 months of business been?

Video interview with Colin part 2 - what are you measuring these days?

Subscribe to Tracking Tourism by RSS or Email

Austria’s national visitor statistics success

In a recent interview in this blog, leading tourism attraction owner Freda Rapson of Jacobite explained why she believed joined up destination visitor data should be a research priority for Scotland’s tourism industry. She mentioned how a learning journey to Austria had really opened her eyes to just how valuable nationally collected visitor information could be.

So it was terrific to be able to discuss this very subject with Martin Schobert, from the Austrian National Tourist Office (Österreich Werbung). Martin is Region Manager for Austria and responsible for both research and knowledge transfer. He is also one of regular bloggers at the Austrian National Tourist Office’s corporate blog: Kulinarisch Reisen.

Martin explained the practicalities of the Austrian visitor data system:

“In Austria there is a central register of residents (population) and therefore it is ruled by law that also each visitor has to register when he/she stays at a commercial accommodation. So it is Government requirement to log everybody that arrives in Austria. Each region/city is responsible for collecting this data and they send it to a federal data collection organisation. It is then sent to a national organisation called Statistik Austria and they are our partner organisation.”

The paper based system is all implemented through the accommodation provider and data collection is a governmental regulation. Visitors register on arrival, using a simple form (one per party) and then there is no additional time or resource required. While only one person fills it out, the form records group size and where the visitor came from, and of course, this also ties this back to the specific type and class of accommodation visited.

The official form has four copies, which means that not only does the government and national statistics office have access to the data, but the individual business also has a full and standardised record of all guest data.

Martin adds “it is very easy for us to access this data but it’s a huge and difficult process to organise!”

Yet the data is typically then available just 2 or 3 months later, which strikes me as pretty quick. All the statistics are available online and can be seen for free at TourMIS. It is a system everyone can use.

As Martin explains “it helps benchmarking for destinations and federal provinces but it also means businesses do not have to do this work themselves.” Its no surprise then that Martin says Österreich Werbung is “very glad with the system - and it costs us nothing because it’s a governmental regulation.”

There is also potential for the TourMIS system to be used by other countries. As Marin points out, the data is there and in co-operation with the European travel commission and other bodies, it is a model others can use.

Due to data protection, the personal data is only allowed to be used for marketing purposes by the individual accommodation businesses. These retain their own copy of the personal registration details of their own guests.

But the Austrian National Tourist Office may use the anonymous data for marketing “intelligence” and market research purposes, which given the completeness of the data set, is still powerful stuff.

Going forward, Statistik Austria is looking to include more country of origin references (for example, singling out Dubai from the Arabic countries now they have opened new office there).

Martin adds “the only thing we can’t solve right now is the difference between business and leisure travel – because there is no official need to differentiate on this on the official form. It seems pretty simple, but actually it is difficult to get form amended.”

No doubt this is something the team will overcome, making there data even more powerful and allowing even greater targeting and segmentation of Austria’s national marketing.

Is this something Scotland can do?

To come back to the question Freda Rapson originally posed - if Austria can get this data, why can’t Scotland? - I asked Martin if he thought their system was something Scotland (and indeed other destinations) can emulate.

His answer: “Yes. But it has to be Scotland-wide, because if collection is not obligatory (and ideally organised by the local authorities, because tourism organisations never would be able to afford this registration-process) and nation-wide on the exactly the same criteria, it doesn’t work. The results will not be good enough to compare to each other.” And normally, businesses have to do this research themselves so they do not get this standardisation or quality, which is why Scottish tourism organisations have to make a case for a national system.

Certainly, Austria’s paper based system of national visitor registration clearly works for them and is enhancing both national marketing and the performance of individual businesses.

Is there any reason why the same approach wouldn’t work here? I’d especially love to hear from you if you have first hand experience of visitor data capture systems used by other destinations worldwide.

Subscribe to Tracking Tourism by RSS or Email

How the New Orleans Tourism Marketing Corporation is bringing a great visitor city back to life

In Europe, a lot of tourism development work at a regional or city level is concerned with improving the reputation and standing of an area – often from a low base. New Orleans, on the other hand, has had a different set of challenges.

Prior to Hurricane Katrina, it was a vibrant leisure and business tourism destination. It was regularly voted as one of the ‘must visit’ destinations in the US. Many Europeans might now suppose that this scenario is a thing of the past – however, New Orleans is recovering well from the heavyweight blow of the hurricane and, while things are not back to normal, the picture is a lot brighter than many might suppose.

At the Emetrics Summit in Washington DC recently, I was privileged to speak to Jeremy Cooker of the New Orleans Tourism Marketing Corporation. He described his role with the NOTMC , how the NOTMC operates, what their tourism challenges are post Katrina and how the New Orleans tourism industry is working to overcome them to bring a great visitor city back to life.

What is the New Orleans Tourism Marketing Corporation?

Before going into detail, it might be useful to get an overview of the role of the New Orleans Tourism Marketing Corporation and how it runs. The NOTMC is a non-profit organisation that is funded through local taxation (hotel, casino and some transport taxes) as well as receiving some funds through the City Budget. The company deals only with New Orleans although there are obvious synergies with tourism promotion at the state of Louisiana level.

The remit of the NOTMC takes in such aspects as advertising, PR, online promotion and brochures and it does this on a budget of approximately $5 million dollars. Spending on admin has to be below 5% of their income with the remaining 95% to be spent on dedicated expenditures and marketing.

Jeremy’s job title might seem a little odd to some – he is online marketing consultant and hotel liaison - but I think his role is a fascinating industry example of how integrating intelligence from multiple sources provides a solid and successful model of working. And it seems that one of the real keys to making the NOTMC a success is the involvement of key industry players, making this an important part of his role.

Jeremy explained that one of their more important forms of research is monthly meetings with hotel owners, general managers, and revenue managers – people who are also major constituents of NOTMC. He gave the example that at informal meetings, hoteliers were able to give NOTMC an informal heads-up on whether a particular month was looking as though it might under-perform. In this instance, NOTMC can then concentrate its resources to push people into the periods where there is excess capacity.

This shouldn’t be taken as implying that big hotels dominate and smaller operators are muscled aside, as representatives of these are also in touch with NOTMC and the organisation endeavours to keep the balance.

As well as intelligence gathered through regular contact with industry players, Jeremy mentioned that information such as that provided by the STAR reports is invaluable in identifying industry trends.

Jeremy’s role also takes in online marketing and he noted that they have seen a strong performance in this area through targeted use of their own and third party websites. I met Jeremy at the Emetrics Summit, a conference dedicated to measuring and understanding online visitors, and he mentioned that one of their next tasks is to fully utilise the mass of customer data produced through the process of web interactions in order to better connect with their customers.

Additionally, NOTMC is looking to use blogging as away of reaching new markets as well as hearing the voice of the customer. One of the key terms at the Emetrics conference was ‘engagement’ and NOTMC, like many other organisations, is looking to improve how it can engage with what the customer is experiencing and saying at many different levels.

Open for business - New Orleans tourism now

So what are the differences pre and post Katrina in New Orleans tourism? Before the hurricane, New Orleans had a strong leisure market (Q4 2005 was on track to become of the strongest quarters in some time) as well as a thriving convention market. It was a destination that had a strong appeal to the family market as well as broad appeal to other niche markets. Needless to say, some of this has changed.

The convention business suffered badly and this has had a noticeable impact on the local economy. Oddly enough the relief efforts in the area helped to contribute to a small recovery in the first year after the storm in that it provided an influx of ‘guests’ in the form of relief workers into the area.

Two years down the line major tourist areas like the French Quarter, Garden District, Downtown, and Magazine Street are back to their former glory – in fact, some might say those areas have come back stronger than they were before the storm. There are still damaged areas of the city but these tend not to be the main tourism areas. However, the family market has not yet returned but NOTMC is finding some success with the Gay and Lesbian market instead.

Some of you might have preconceptions about what this means new market segment looks like but it might be fairer from a European viewpoint to describe this as an appeal to a ‘metrosexual’ market – people that want to come to experience authentic arts, good food and good music. In New Orleans, the Gay and Lesbian visitors have led the way by responding more strongly to this proposition.

It also helped that festivals such as Mardi Gras already existed as a base upon which to grow this visitor segment and all the signs are that this is a tactic that is working well with visitors staying longer and spending more.

Closer to the ground, Jeremy notes that the industry is still diverse, reflecting the usual range of small, privately owned bed and breakfasts, boutique hotels and large, convention-friendly hotels, who at times may share different viewpoints. NOTMC works closely with all parties to ensure every group is represented equitably and bases most of its marketing actions on sound research.

The message that came through from this conversation was that New Orleans is open for business. The city recently sold out for a convention in early November, and is anticipating very busy first and second quarters in 2008 with events such as the BCS Championship game, the Sugar Bowl, Mardi Gras and the New Orleans Jazz and Heritage Festival.

Many people feel a strong affinity for New Orleans and so these probably will drift back in time but Jeremy concluded our conversation by encouraging you all to come to New Orleans – it’s open for business and you can be assured of a warm welcome. For travel planning info on New Orleans, see NewOrleansOnline.com.

All images are used courtesy of NewOrleansOnline.

Subscribe to Tracking Tourism by Email

Subscribe to this blog by RSS feed

Industry interview with five star Loch Ness attraction owner, Freda Rapson

Jacobite, the five star attraction owned by Freda Rapson, offers cruises and a wide selection of tours and charters sailing on the legendary Loch Ness throughout the year.

As Tony Mercer, Head of Quality & Standards at VisitScotland says:

“Jacobite is a worthy holder of the 5 star Tour accolade as it sets very high standards in the hugely important day trip market. Visitors and locals alike can enjoy the experience of viewing some of our most famous sites, Loch Ness and Urquhart Castle, from the loch itself on an informative and comfortable cruise combined with coach trip.”

Playing close attention to business data, visitor satisfaction and balanced scorecard KPIs has been of great significance in growing this successful business.

However, Freda believes that for maximum success, it is essential that a more joined up approach to visitor data collection and dissemination is undertaken at a local and regional level.

She regards overcoming dated and disjointed local visitor data as critical for tourism businesses like Jacobite, in order to fully maximise their marketing to geographically discrete markets.

As Freda explains:

“I’ve got a bee in my bonnet at the moment about the amount of customer information that is out there but is not joined up. We collect information mostly from our customer feedback cards. Nationality/visitor origin is one of the main statistics we pick out, so we’ve got that information. And somebody in another business down the road has that information. But nobody links it together.”

“If we all had three standard questions that were asked, and that data was centrally analysed and shared between businesses, it would be such a simple thing.”

The Austrian visitor data example

Freda describes her experiences from a recent learning journey to Austria, where she found near perfect statistics for accommodation occupancy, seasonality, year on year trends and overnight visitor nationalities.

“In Austria, organised by government, everyone that checks in has to give name and nationality. This added to the hotel specific (eg 4 star, location) which all goes into a central database. It means that everyone that spends a night in Austria is recorded. It is so simple, why can’t we do it? Clearly it would require legislation/central co-ordination but its not rocket science. Its so do-able.”

The Austrian research process that Freda refers to is described at some length in this very useful research paper by Karl W. Wöber (Institute for Tourism and Leisure Studies, Vienna University, Austria).

I would agree with Freda that the data collection process is both do-able and very important, though I would add that there are complexities and challenges involved, particularly of the political and administrative varieties.

It would, for example require not only careful planning, but a long term financing model that would allow the data to be collected of a number of years. There would be challenges to ensure that smaller or poorer areas were not overlooked or excluded.

As Karl W. Wöber writes about the Austrian experience:

“Due to the refinancing interests of data collection authorities and the lack of financial resources in the tourism industry, however, the data analysis for smaller tourism regions or report communities has been prevented in the past. This factor must be regretted since it can be assumed that the evaluation of key success factors in tourism marketing will significantly improve when they are measured in smaller regional units.

Also tourism managers, especially those operating on a regional level, usually have only very little influence in the organization of nationwide surveys. Therefore, many of the statistical series are based on administrative regions that are not always congruent with actual regional use and by tourists and subsequent flows.”

Nevertheless, there is no reason why the 20 years plus of learnings from regions like Austria could not be taken on board to ensure that any process developed in Scotland does not fall at obstacles that have already been encountered elsewhere.

How could such data be used by tourism businesses?

Clearly even the most accurate data has little value if it is not used. As Freda adds “its all very well recording it, but what matters is what you then do with it.”

She explains how such visitor information would be utilised by Jacobite, most importantly “to understand profile of customers.”

“Our customers don’t match the old regional survey data that was conducted on the street. Groups, for example, get missed. If data such as visitor origin were accurate it would clarify who we are marketing to, so we could target and promote accordingly. We’d ask what are we doing in the key areas where the bulk of visitors are coming from”

She continues “I do think that there is a lot of fallacy out there. People say we’re not a family market, or not a short break market. Or people say there are no German or Spanish visitors out there. There are.

I bet you if you counted them, there are significant numbers but they’re being missed. For example, the official stats say roughly 1% of visitors are Spanish – but that is not the picture I see in my business.”

“I know what our percentage of our individuals and groups are in terms of nationality – and somewhere, those people are staying here. As a visitor attraction, we see the key link as being with the accommodation providers. Visitors come and stay and then look at what they will do. There must be a point of contact to record that visit – even if that needs legislation – so the visitor data is accurate and truly reflects our business.”

At a destination and country management level, there are of course many other potential uses for joined up visitor data – from comparative regional profiles to package targeting. But what I think is significant about Freda’s viewpoint is that she makes a very strong case for how individual businesses themselves will also profit from better quality data.

And given that is individual businesses like Jacobite who will be responsible for achieving Scotland’s revenue growth targets over the next decade, I think Freda has a strong case for putting joined up visitor data at the top of the tourism industry wish list.

Tourism Industry interview with Maria Peter of Scottish Development International

Think national economic development and what springs to my mind is weighty tomes of economic impact research, multipliers and market forecasts.

So it was a surprise to me that in the first five minutes of speaking to Maria Peter of Scottish Development International (SDI) she had covered off fast, tactical response to market demands; channelling intelligence gained from global operators back in to the market for use by small indigenous operators; meeting business needs with actionable research focused on provision of contacts and the benefits of fast and functional research. Impressive stuff.

SDI works with both Scottish-based and overseas companies and organisations. Their role is to broaden Scotland’s international appeal and to assist the growth of the Scottish economy, by encouraging inward investment and helping Scottish-based companies develop international trade. Tourism is major significance to Scotland, producing around £4.9 billion for the Scottish economy and supporting 9% of all full-time employment. It no surprise therefore, that tourism is one of the key sectors of interest to SDI.

One aspect of Maria’s role is to develop inward tourism investment into Scotland, in the form of real estate, resort and hotel operations to private residence clubs and timeshare development.

As Maria explains: “Five years ago Scotland was not a priority for global developers and investors, whereas as now it is, including the Highlands and Islands. Resort developers are now saying that their clientele is demanding something different, something that Scotland is able to offer. For example, there are now timeshare operators with a Mediterranean presence who tell us that their customer base is also demanding a time-share experience in the Highlands of Scotland.”

“SDI responds to the needs of potential inward investors and in turn they are responding to their customers’ demands. They can give us first hand consumer demand information, without us have to make assumptions or commission endless swathes of research that may or may not hit what the global operators are looking for. We use these intelligence channels to feed data back into Scotland, which is of critical importance, because SDI can then facilitate deals by effectively acting as matchmakers between global operators such as the Hyatts, Hiltons and Intrawests and partnering them with potential indigenous developers, landowners and investors in Scotland.”

Intelligent tourism matchmaking

With a focus that is both inward and outward, SDI is using market, business and consumer intelligence sources to look at competencies and matching them.

Market intelligence originates from the global operators and is in effect passed on to the typically small indigenous tourism businesses that work with SDI.

SDI also uses research at a global trends level, but wants to get this to the market in a form whereby businesses can actually use it. So, they are also looking