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

Some of biggest travel and tourism questions and how research can best address them

It is my humble opinion that lots of research effort and money is wasted on tackling the wrong questions. Questions that don’t stand up to the so what? test and so do not ultimately help make money, save money or improve customer experience.

I reckon there are some “big questions” at the heart of businesses and organisations in the travel and tourism sector. And while these big questions are mind-blowingly scary, because they can’t be glibly answered with a quick survey or a few days work, I think it is essential to keep them in mind for every single research and analytics activity you undertake. This is because they form the big picture - the context, the so what? - that all smaller activity must be calibrated towards.

Without reference back to the big questions, ad hoc research and analysis activity can easily lose its way or fail to be translated into any form of meaningful action. It becomes focused on the interesting or on the production of information - not on tactics and strategy.

So here’s my big three. (You may disagree and it’d be good to explore your thoughts and suggestions!)

1. How do we attract and convert customers in the face of intense global competition?

2. What must we [and all our delivery partners in the end to end process] do to ensure customers will come back/recommend to others?

3. How do we deliver a optimum customer experience from a profitable, sustainable business base?

You may have noticed I’ve covered the business, the customer, the market, but not explicitly product. Partly, this is because I see product as being closely bound up in question 1 and 3. Mostly, though, I think that in a Travel 2.0 environment, the toughest questions revolve around the customer’s experience and demand.

“The 20th century was about sorting out supply…The 21st is going to be about sorting out demand.” The Internet makes everything available, but mere availability is meaningless if the products remain unknown to potential buyers. Wired Magazine

At this point, you may be exclaiming “Enough with the deep stuff Vicky, I just want to know if my customer had a good time. I’m not trying to solve universal questions right now” To which I must irritate you further. Because as I see it, the “how was your experience” type question is asked in order to tactically address question 2 and 3. If it is being asked in isolation, all small picture and no big picture, what do you do with the answers? Benchmarking and nice graphs don’t improve customer experience or the bottom line. It’s the actions - however small - that make the difference.

So, where does research fit in to tackling these questions?

Well, given I’m feeling philosophical, I would suggest it takes a shift in mindset in order to enable these big questions to be properly tackled by research. A shift away from the idea that research is somehow something you do a bit of once in a while when you need it. A shift towards a culture of business intelligence and analytics that works with all the data it has (even if it is in a show box) in order to tackle and act on the big questions.

Allan Leighton, Chairman of the Royal Mail declared at the recent Market Research Society conference:

“I believe every organisation should have radar - to listen to your people, listen to your customers all the time. It shouldn’t be called research it should be called radar. You cannot be selective when you have it. You have to have it all the time.”

I quote it because I couldn’t agree more. And I don’t think that only global corporations and national destinations that have a hope of attaining this - I do genuinely believe that a very small business with the right mindset can also be intelligence driven.

Making radar work for you

So what does the shift from research to radar involve?

1) Always on

You can’t just do a bit of radar when you think you might need it. Radar is always on, always monitoring the information stream in anticipation of the unexpected. In research terms, that means listening to customers, staff and other data on an ongoing, not an ad-hoc basis.

2) All around

Radar takes a 360 degree view of information, it doesn’t focus on one source at the cost of all others. Switchboard activity, website activity, conversations with customers, regular staff surveys, news reports, transactional information, emails are all data sources. Listen in, by keeping on top of it and finding a standard way of recording and reporting on key information.

3) Alarms and flashing lights

Radar can only alert. Make those alerts easy to spot, as opposed to hidden deep in 100 page reports. Make the bells ring loud and the lights flash bright through the way reporting information is presented and distributed. If the boss wants a 50 word summary in a text message, that’s great. Because the point of alarms and flashing lights is for the leadership to see the problem and act.

4) Is it a bird? Is it a plane?

But is there even a problem? What is going on? Why? Often the picture isn’t really clear and your radar triggers more questions than answers. But staff on the ground know more than is often allowed for - talking to them can give insight to what is going on. You may also need to know more about what customers think and what their reasons are for this.Depending on the size of your organisation, this may be the point that you need outside expertise - or at least to make some bright internal spark available to ask great questions and crunch the answers.

5) Looks forward more often than you look back

Ait Traffic Control doesn’t use radar to see how safely planes landed yesterday, they use it to make critical, tactical decisions in the present and immediate future. The focus more on what is going on now and what might be in the way - not solely on what happened in the past.

Beware, brains in action

So, how do we get business, retain business, oh and make some money/fulfil our stated mission too?

I think these “big questions” are at the heart of businesses and organisations in the travel and tourism sector. And the point is, they can’t be answered by a quick bit of research or a new fangled tool. Instead, every piece of data/research/analysis that flows through the organisation should serve towards these critical questions.

I won’t pretend it is easy - but it is being done. And it’s being done by businesses in this sector, giving them distinct competitive advantage over those who’re wasting their time and effort tackling the wrong questions.

So, a final question to you - am I on the right track, or hopelessly deluded?

Now, I appreciate that when you write for a blog with an emphasis on travel and technology, you’re supposed to be positively evangelical about new media and technology opportunities.

The man who couldn’t see the point of Twitter? Image copyight of www.hmbateman.com

But I have a guilty secret. I think a lot of the online social networking phenomena are downright silly and I generally refuse to participate in some aspects of it.

Notice that I say ‘some aspects’ though. I have embraced blogging for example. I watch clips of ancient cricket matches on YouTube when I think no-one is looking. I have checked out my accommodation on trip advisor and I follow the debates on WIWIH as well as those on sites by my fellow bloggers.

But am I the one being silly? Heavens forfend but could some of your customers feel the same way as well?

So what’s my problem?

Well, here are three thoughts to start with:

• Just because a new 2.0 site is cool, it doesn’t mean it will remain that way. Mass migrations can render them useless in months.
• Because a site is cool, it doesn’t mean I have any use for it. My own dancing badger might be pretty cool to own but I don’t actually have a use for one.
• Anyway, I don’t care about cool, I want a site or technology to have proved itself and know that it will continue to prove itself.

Let’s take those in turn:

I find the propensity for rapid mass migrations from one ‘cool site’ to another a little unnerving. There are already signs that Twitter (the yet-to-come ‘next big thing’ for some people) is old hat and that people are really just gearing up to run off to their next watering hole. Myself, if I go somewhere I like to think that can at least catch my breath before my travelling companions decide that we have to sprint from location to the next…and to the next….and to the next. And if I’m left behind or told to make my own way there…well, there’s a certain pleasure in taking things at your own pace and looking before you leap.

I was a member of Facebook for a while but ultimately can’t see any purpose for it. Despite my penchant for wearing loud tweed, I’m quite a quiet fellow and don’t feel the need to broadcast my every move. I don’t think anyone beyond me would really give a hoot knowing that my current location was a bothy in Sutherland or that I had thrown a sheep at someone I vaguely know.

Putting those thoughts together means that I will invest my time in something if it will still exist meaningfully in six months and if it has a enhanced use beyond something I am currently using.

So what?

The lesson is that although you might be wrapped up in the latest tech developments, your audience might not. They might be creatures of habit who are slow to change. Developing a marketing strategy based on the latest NEW! IMPROVED! TWOOTA! TECHNOLOGY! might sound like a good idea but you are taking a risk and people like me will ignore you.

But the refusniks are obviously not all standing athwart the Web 2.0 yelling “stop!” I’m not reinstalling a fax machine in my office and I don’t intend hand writing a letter to a hotel to enquire if they have rooms. But neither am I going to be at the bleeding edge of the next cool thing.

Eternal Verities of the business mind

For me, a business idea works if it fits into the framework of The Five P’s (click here for an overview and explanation). I’m usually a little suspicious of seemingly glib frameworks like the Five Ps but I have found this to work time and again in my experience. I’ll expand on this framework in a later post but suffice to say, new solutions for me must fall within this framework – just because we have news ways of working doesn’t mean that we have become fundamentally different types of beings.

For those of you with hazy memories, the Five Ps are:

• Product
• Price
• Place
• Promotion
• People

It is my conviction that your business decisions are all geared to getting these Ps right – Twitter, Facebook and so forth are just tools to achieving these aims. If they don’t do that, then they are irrelevant.

Now I expect some disagreement with my views – so what are you waiting for?

(Disclaimer: unlike me, Vicky is a very happy Twitter/Facebook/Xing/LinkedIn user. Luddites have not yet completely taken over TrackingTourism.com)

Is the party over?

As housing woes in the US spread around the globe and families feel the pinch from rising food prices and fuel, you could be forgiven a bit of bleak speculation that hard times lay ahead for the travel industry.

From local restaurants to major airlines, tourism related businesses are being pinched by rising costs of raw materials like food and energy. But do they also face the prospect of significantly falling demand?

So are travel plans amongst the first things to be abandoned in economic hard times?

First some good news

1. People won’t stop taking holidays altogether. The evidence suggests that as financial pressures increase, people adapt their plans rather than cancel them altogether.

As Travelmole recently reported, US travellers are “trading down, not out” They quote Peter Yesawich, CEO of analysts Ypartnership, as saying “In the next few months we will see a transformation of vacations, not cancellations.”

“Pragmatism and escapism are not mutually exclusive…. Consumers who are feeling deprived often seek solace in affordable entertainment alternatives. Beer, liquor, movies and home entertainment tend to do well in hard times.” Tuning Into The Recession Mind-Set

“Leisure travel…tends to remain fairly constant. People may alter their personal travel plans in search of more modest accommodations, but they still want to take their vacations,” said Mark Woodworth, president of PKF Hospitality Research in this Travelmole report.

The picture for business travel is somewhat different. When economic activity slows, one of the first expense items to get attention is a company’s travel budget. “Historically, we have observed a softening of corporate and group travel as the most immediate reaction to the threat of a recession. We believe this trend will repeat itself in the first half of 2008,” said Mark Woodworth, president of PKF Hospitality Research.

2. There will be winners as well as losers. Opportunities exist for those who can take an adaptive strategy, or whose services/products represent switch choices.

As Marc E. Babej and Tim Pollak write in this great article on Tuning Into The Recession Mind-Set “Affordable pleasures that aspire to premium perceptions in good times would do well to consider touting their affordability in a recessionary environment. Mid-market resorts and cruise lines, for example, should make a virtue out of being accessible escapes - all-inclusives can play predictable expense to competitive advantage.”

3. Growth is still forecast by the IATA, albeit at a slowed rate compared to previous years. “When we adjust for the impact of the leap year, passenger demand increased by 4-5% while freight was even more sluggish in the 2-3% range. Demand is still growing. But clearly we are in a different league from the 7.4% and 4.3% growth that we saw in 2007 for passenger and freight respectively. Things are slowing down,” said Giovanni Bisignani, IATA’s Director General and CEO.

The diagram below shows the IATA 2007 - 2011 traffic forecast.

Now some bad news

1. Cut backs are being made by consumers. Nearly three quarters of Britain’s more affluent households say they are planning to cut their spending this year, according to research from financial provider Axa.

They claim “72 per cent of households with a total income of £30,000 or higher will be taking steps this year to cut spending and many will be driven to radical measures as middle-class inflation, or those goods and services typically consumed by middle-income families hits 5.7 per cent. 44 per cent said they will be eating out less to cut costs, while around one in five said they would socialise less with friends (21 per cent).”

American consumers are already making changes. Travelmole reports that “More than two-thirds of respondents to the most recent survey by Ypartnership, co-authored with the Travel Industry Association, said they had downsized their trips in some way during the past six months because of personal financial concerns.”

The same article reports a survey by AIG Travel Guard found that 47% of US travellers plan to downscale their vacations to save money. More than two thirds of those polled by AIG Travel Guard said they wouldn’t reduce the number of leisure trips they take in 2008; “slightly more than half said they wouldn’t cut back on the quality. But 22% said they would eat in less expensive restaurants, and a slightly lower number said they would stick closer to home; another 16% said they would choose less expensive hotels than in the past.”

2. Anxiety is contagious. Behaviour is affected even if people are not directly under pressure themselves.

Marc E. Babej and Tim Pollak write in Tuning Into The Recession Mind-Set that “economic downturns instill anxiety. Almost no one is immune. Even people who are doing OK themselves will tread more cautiously as they see their peers cutting back on their spending or worrying about losing their jobs. What’s more, in this particular recession, even households with secure incomes will have reason to be on edge. Energy and food prices are likely to remain quite high, while the housing crisis is diminishing almost everyone’s net worth. So expect even those who aren’t really feeling a lot of pain to act as if they are.”

They also make the great point that those who are not suffering directly do not wish to cause their friends and families additional pain by flaunting conspicuous consumption.

So how do you plan for uncertain times?

Previously predictable behaviour can become much less so during an economic downturn. This makes it even more important to keep an even closer eye on market data, your business data and customer feedback.

Being aware of what is going on in as close to real time as possible, means you can be tactical and flexible. This avoids leaving you trapped in a strategy developed for a more optimistic market.

Finally, don’t bury your head in the sand. Acknowledge that downturns change consumer behaviour and realistically consider how changes in demand and consumption are likely to impact your business. This will leave you in a better position to innovate and respond to new opportunities, while others are paralysed and stagnate.

Terms like Travel 2.0 and Web 2.0 get thrown about in conversation and it can seem that everyone but you knows exactly what they mean.

Yet push someone for a definition and people come up with all sorts of different explanations or they struggle to define it all.

So this post attempts to give a simple working definition of Travel 2.0. But more importantly, we hope to highlight what that really means for travel and tourism businesses and why you need to care.

But given that no two people seem to agree on precisely what Travel 2.0 and Web 2.0 actually mean, we’re doing the blog equivalent of a duet. We’ll both throw our thoughts in and to avoid making you dizzy, I’ll indicate which or us is proclaiming, so you know who to argue with at the end!

So, we need to pin down Web 2.0 before we tackle Travel 2.0 …. so Web 2.0 in no more than 20 words please:

Vicky: Community, interactivity, reciprocity, two-way marketing conversation, the long tail, create, modify, self-publish, user generated content, rich media, collaboration, see Wikipedia.

Stephen: Technically: blogs, RSS, flash media (no flash = no YouTube). Economically: (almost) zero cost to entry. Socially: critical mass of chatterers.

So where does Travel 2.0 fit in?

Vicky: Travel 2.0 is a term coined by our friends at PhoCusWright, as CEO Phillip C Wolf explains in this article:

“Travel 1.0 started around 1995; it was characterized by the shift from offline to online reservations and was dominated for a decade by three things: price, price and price.…. Travel 2.0, our industry’s collective fulfilment of Web 2.0, embodies how companies can differentiate themselves in a vast, dynamic space…. New travel researching and planning approaches are empowering consumers in unprecedented ways…. Travellers are keen to take control and find/create the perfect trip, not just the cheapest trip.”

What I take from that is Travel 2.0 is moving on to be more personalized, customer centric and experience centric. At the same time user communities and online tools have evolved for the traveller themselves to share experiences, to help search and define what it really is they are looking for and to pre-experience this though levels of multimedia content before they even make a purchase decision.

Stephen: I think it’s no coincidence that this is occurring in a period of sustained prosperity unparalleled in my lifetime. Put simply, western people have the time and money to be choosy about where they go and what they do. But people always need information in order to spend wisely and Travel 2.0 has effectively been about the vastly improved information flow to people making important investment decisions.

I have this notion though that it might be useful to speak of ‘Tourism 2.0‘ in describing the (consumer) demand-side experience and ‘Travel 2.0′ when speaking of the supply-side reaction to this, although I appreciate that they must meet in the middle!

Is it just jargon or does it represent a change in consumer behaviour?

Vicky: Yes and yes. It is jargon and that can be a barrier to understanding, but it does represent a real technology-enabled shift in consumer behaviour.

It is simply now easier, more satisfying and a richer experience for travellers to interact with other and share online – be that through video, images, reviews or other forms of exchange. Online social interaction lends itself so well to travel (the anticipation, the actual experience, the reminiscences). And the technology has evolved to allow interconnectivity and aggregation of services/content from many sites meaning that the research, anticipation and purchase have become far more fluid and closely aligned.

What it isn’t about is simply a bunch of tools, those of course these play an important part. (And for Travel 2.0 tools galore visit the Web 2.0 Travel Tools blog).

Stephen: Undoubtedly jargon. Some aspects do represent a change in customer behaviour (checking out peer reviews of destinations being a case in point) but other aspects are old impulses in new clothes (Flickr is the modern equivalent of showing off your holiday snaps…but only to people who are interested!). Ultimately, though, I think it is about increasing ease of access, whether that be to information, booking or new experiences.

Why should travel and tourism businesses care?

Vicky: Because its not just teenagers, geeks and weirdos or the “more advanced” North American market in this space – it is your customers, young and old, in Europe, the Americas and Asia. This is where they’re dreaming, planning, buying and reviewing. Sometimes a little edge by participation early on delivers a big advantage, where as getting left behind can leave you dead in the water.

Stephen: Well, if you don’t understand the role of review communities or metasearch for example (price comparison sites like Kayak.com who aggregate price data) then you don’t understand where customers are going to research their travel plans and what is motivating them to do that. That makes it harder to deliver the right message at the right time.

Do businesses need to do anything different?

Vicky: For me Travel 2.0 is also about recognising a shift in the marketing process and “control” of the marketing messaging.

From TV watching to travel brochures, media channels have become fragmented to the extent that the 1% response rate you could once hope to achieve with certain types of marketing/advertising, simply doesn’t deliver the volume of respondents it once did. The one to many model of mass marketing is being replaced by the one to few or even one to one model embodied by The Long Tail.

The old cliche used to be “people who have a bad experience with a service tend to tell 6 to 10 people, but those having good experiences only tell 1 or 2 people”. Word of mouth was generally limited to how many people one person actually came into physical contact with. I don’t think that stands up any more. People have any kind of travel experience, great or terrible, they tell Tripadvisor, Twitter, Facebook, Flickr, YouTube, the blogosphere – they tell their online community.

As people are no longer limited to only telling or consulting the opinions of people they know in the real world, word of mouth has become super-charged and powerful. Your marketing, PR and advertising efforts are not the only thing shaping your reputation. As this post explains, You Don’t Own Your Brand - Your Customer Does. So, personally, I don’t think doing things the same old way is an option any longer, because technology has led customers to dictate a shift in the terms of the conversation.

Stephen: Businesses do need to behave differently but how they behave depends on a number of factors.

A small business (a bed and breakfast for example) needs to be smarter about how they are perceived in the world. Previously, they just needed to concentrate on product and manage their reputation that way but now they have a potentially global audience watching them…and they need to know how to react to that constructively if things go wrong.

Being of a more conservative disposition, I am not sure how much ‘own brand’ social networking in its current form is merely a fad or how much it will be integral to business in the future. I can imagine that things like Facebook will have their place but I’m not sure, for example, that a Hotel Chain own-brand social network really adds any value. Same goes for most attempts (not all) at corporate presences in Second Life.

But the bottom line is that these companies need to make travel easier for their customers - whether that’s at the research, booking, or experience stages.

Who are you Travel 2.0 heroes? Which companies are getting it right?

Vicky: I’m a self-confessed Tripadvisor addict, I also use Flickr for travel research and love sites that pull in Flickr images or permit users to upload their own. Community of Sweden from Visit Sweden are VirtualMalaysia are good for that. In terms of flights, I’m increasingly using metasearch site Kayak. If it was a destination I don’t know, I might consult a site like TripWiser or TravBuddy.

Stephen: I also like Kayak. At a local level I like Bob’s Blog because it is a great example of how a business should be working a blog.

Mmmm, I’m not sure how much harmony there was in that duet, but isn’t that Web 2.0 and Travel 2.0 all over?

What do you think? Should there be a distinction between Travel 2.0 and Tourism 2.0? Who are your Travel 2.0 heroes? Am I deluded in thinking this represents a shift in consumer behaviour?

Update - you may also be interested in these Travel 2.0 posts from Tracking Tourism:

Travel 2.0 - the data, impacts and business implications

Striking a Travel 2.0 balance - how much time should a business commit?

Post Summary

The party could soon be over and Peak Oil could start to radically upset our current notions of travel and tourism. As costs rise, the world will become smaller again although there will nevertheless still be opportunities.

While the full impacts of global warming and their timings continue to be debated, the effects of a post-Peak Oil world are more certain and threaten to have deeper and more immediate impacts on the travel and tourism industry.

The idea behind this post then is twofold - 1) to determine whether I’ve got a little over-excited or whether this is a genuine problem and 2) assuming it to be an issue, what will be the effects?

What is Peak Oil?

The concept of peak oil is simple - there is a finite amount of oil in the ground and we have reached (or about to reach) the peak of the supply. Hereafter, there will increasingly be less oil to meet demand.

Arguably, fossil fuels and oil especially are the key to the modern world - they make nearly everything we take for granted possible - from mechanized travel through to abundant food, plastics, heating and most modern industrial processes. A world completely without oil is the childhood world of our grandparents - a world smaller and harsher in many respects.

I’ve raised the issue of peak oil with a number of knowledgeable energy industry people over the last few years and, to be honest, never received wholly comforting answers answers. The oil industry acknowledges that peak oil is an issue - we will start to run out of oil at some point. One industry insider told me that 2008 will be the first year when supply cannot meet global demand.

The best I’ve had by way of reassurance is , “Oh well, something will come along, it always does.”

So how will this affect tourism?

This isn’t just about the cost of travelling. The modern western agricultural model, for example, depends on fertilisers which heavily use oil in their preparation. Without them, crops will be less productive, meaning that food (whether animal or vegetable) becomes more expensive. By way of another example, think about plastic, another oil based product and just think how much in your house is plastic and how integral it is to modern life. Finally, if the cost of living rises, so do the wages needed to sustain employees. This list could go on but, in summary, nearly every aspect of our lives would become more expensive in a future where there is not enough oil to satisfy demand.

This will affect travel just as much as any other sector and here are a few thoughts on how this could affect the sector.

• It puts a brake on tourism expansion

As costs start to rise, people’s ability to take more and longer holidays becomes constrained. Long haul destinations start to become luxuries instead of one choice among many.

• People choose local

I recall that when I was young, my father told me that he had to wait until he was almost 20 before he got the opportunity to travel abroad - to France, some 100 miles from where he lived. I also recall how of all my school mates when I was young, only one came from a family rich enough to afford to fly overseas - and that was to Spain, incomparably exotic at the time but now just one choice among many. The rest of us had holidays that were more local and it seems to me that this will become more likely again.

Which is possibly good news for local destinations. Anyone who grew up in a coastal town in the UK is usually surrounded by the evidence of a once thriving holiday industry that went into severe decline when local people were no longer bound by economics in having to chose the British seaside over somewhere abroad. However, if the world becomes smaller again, these areas could see a renaissance in their fortunes.

• Travel becomes less convenient

Expensive oil starts to make public transport a more appealing option - but this means that travelers will be more at the mercy of the timetables than they are presently. In the event that air travel became probitively expensive, then rail transport (in Europe anyway) could become the dominant means of long distance travel once again.

Europe still has a working legacy of good public transport (however frustrating it is in reality sometimes) - I fear that this is not the case in much of North America.

• The Curse and Benefits of Petro Tourists - or how Canada can travel the world but become too expensive to visit

Of course, some areas will benefit in the short and medium term from oil shortages. These include primarily those countries with oil reserves and which will continue to suck in money from the rest of the world. At a geopolitical level this is a serious concern as many of the countries that stand to benefit the most are often the most unstable or are (potentially) inimical to the West’s current interests.

It also means that those petro-currency nations will become increasingly expensive to visit (think Norway already) but their citizens will enjoy higher standards of living compared to many other countries.

I suspect that Canada (whose oil reserves are second only to Saudi Arabia) will fall into this category - and I think the current strength of the Canadian Dollar vs the US Dollar is propelled as much by this as any mismanagement of the US financial system. I’m sure it’s great if you’re Canadian but, from a foreign travelers perspective, it’s already cheaper for me to visit the US if I’m prepared to substitute, say, Washington State for British Columbia.

But of course there will also be opportunities for non-oil nations that are seen as good value by travelers from the oil nations of Russia, Canada and (potentially) Venezuela, Nigeria and the Middle East. People in these areas will have money to burn and I’m sure some travel operators will become adept in helping them do that.

Suggested Links

James Howard Kunstler: The Long Emergency

Wikipedia:
Peak Oil

Lincoln University, New Zealand: “NZ Government acknowledges seriousness of tourism researcher’s ‘peak oil’ claims”

VisitScotland: Scenario Planning: What if the Oil Runs Out?

We’re all doomed!

My feeling is that tourism and travel will be very different in forty years time but that it will not necessarily have continued on the growth curve we are currently used to. I think there will be a slow contraction in some areas and the current model of of tourism with its opulent abundance of choice will increasingly be a luxury.

However, there will be opportunities as well as challenges but I would be really interested to her your views on what I have written.

I’m aware that when you make guesses about how the world will be in the future, you invariably fall flat on your face. But, rather like the mid-20th century idea that we would all travel around strapped to atomic jet pack by the turn of the century, these guesses are as interesting for the way they reveal contemporary thinking as for the quaintness of their vision. So, if what I have written in baloney, I’ll be glad to have a laugh about it with you in 30 year’s time over a glass of rare Himalayan whisky served by a floating robot waiter in a geo-stationary luxury resort 100 miles above Africa.

Post Summary

Chris Anderson, author of The Long Tail, surmises that ‘free’ services will be a driver for business in the years to come. This post considers ways in which this could apply to the travel and hospitality market.

Chris Anderson, the man responsible for the idea of the Long Tail, has been at it again.

This month’s edition of Wired features an article called Free! Why $0.00 is the Future of Business which is about how items and services for which we are traditionally charged become free while as the potential to make money lies in ancillary services.

So, for example, you make your money not on the cost of a printer but instead the lifetime value of ink supplies. Or a newspaper becomes free on the internet as the increased audience enables it to earn enough from the increased advertising opportunities to cover the loss of income from people paying for a paper copy of the paper.

I have some issues with the articles conclusions but it is an interesting concept and one that is already being used within the travel and tourism industry.

Two examples:

1) Ryanair makes its money through food, drink, premium reservations - not just through seat sales. Michael O’Leary is on record as wanting to offer seats for free -and you just know he’s not doing this out of charity but because he knows there’s a workable business plan behind it.

2) Free Wifi Access in Hotels - it helps to differentiate one hotel from another but, presumably, could also be used to encourage cross subsidization of the service in other areas. For example, making WiFi access free could encourage guests to stay in their rooms and order more from the on-site catering.

Free Hotels?

When you come to think of it, there is little difference between a hotel room and a seat on a plane. Both are perishable commodities - once the fight takes off or the night is passed, there is no getting that unsold stock back. So, could we see the introduction at some point of the free hotel room?

Actually, I don’t see why not but I think it would need significant economies of scale to work - or a degree of monopoly provision to help things along. What I mean by ‘monopoly provision’ is this: if you are flying, you have little choice but to purchase water (for example) from the cabin crew if you have not planned ahead. You can’t pop out mid flight to get a cheaper bottle of water from the nearest newsagent or drugstore.

In other words, if there isn’t too much choice (as opposed to no choice) around, then there is a greater chance that you will be able to make money on incidentals. All airlines also have the appearance of a temporary monopoly for the duration of its flights in the form of a captive audience on the flights which means that they can sell advertising in the form of inflight magazines.

There’s no such thing as a free room.

So my thoughts are that this model might work in other areas of the tourism industry - but the trick is to identify those areas where choice is more restricted. Off the top of my head, I would suggest some remote rural locations might work under this model - there have been times when I have probably spent more on catering than accommodation in B and Bs in the North of Scotland because there simply isn’t any other alternatives.

Using my example, however, does raise the obvious question: “If I can charge £25 per person per night lodging and they spend £30 per person per night on meals, why should I make the room free and cut my income by £25 per night?” Well, the answer to that I guess is good old ‘price elasticity of demand’ - if the offer attracts enough new guests then it pays for the £25 per night loss.

Competing on Price and Quality?

So, in conclusion, I have reservations about this but I think that some brave tourism provider could well try this and if their business model is right then they will succeed. I have always been taught that to fight on price alone is a mug’s game unless you have deep pockets - however if you are able to fight on price and quality (in the form of meals, for example, that people will pay more for) then you perhaps have the makings of a winning combination.

Any thoughts?

Post Summary

Does increased choice, perversly, decrease choice? Does the Long Tail indulge our preconceived desires to the exclusion of chance, serendipity and, more importantly, having a really great travel experience?

Can the long tail narrow choice instead of enhancing it?

When I’m not following trends in tourism, I’m a keen follower of UK politics and, even more geekishly, American politics . In this capacity, I regulalry listen to the interviews on the www.bloggingheads.tv as this is an excellent environment in which ideas can be nurtured, discussed, grown or discarded between two knowledgable people in a time frame that allows the debate to mature.

Usually, my politics and tourism interests don’t collide but this excerpt in a recent post made my ears prick up.

The speaker is Cass Sunstein of the University of Chicago Law School who, in terms of the public political dialogue, wonders whether the internet communities are all their cracked up to be. His argument can be paraphrased that, in terms of politic discourse, people tend to congregate with like-minded people who then reinforce their views (and indeed often make them more extreme). This effect is known as the ‘echo chamber’ and it has the effect of making the participants hear what they only want to hear or, in other cases, to work them up into a righteous frenzy that previously didn’t exist.

But Cass sees value in experiences that go beyond the categories imposed by such closed groups as these experiences give an individual both competing views of the world as well as delivering insight into things that they might not previously considered. One example he uses is that of a traditional newspaper where, although you might only be interested in sport, the chances are that you will also read about politics, regional affairs etc - things beyond your narrow interest. He also uses the (borrowed) metaphor of walking through a city, seeing something you have never encountered before and thinking, “Hey, that looks cool, I would like to do that!”

Essentially, Cass is saying that serendipity is a good thing and your life is less without it.

So…what the heck has this to do with tourism?

Well, it made me wonder whether blindly serving the tourism ‘long tail’ niches could be the equivalent of the narrow interest groups where you get exactly what you want…and then miss out something you really would have enjoyed because it has simply been filtered from your view. In other words, we become so niche and exact in our demands for experiences that we miss out on the fuzzy elements that can make a trip really enjoyable.

I don’t have a definitive answer to whether this is the case but I thought I would look for clues at ITB in Berlin and the PhocusWright summit. From what I’ve seen so far, my fear that tourism could be getting too fixated on answering every known traveller’s desire (and in doing so are leaving no room for the enjoyable other serendipitous experiences) is something that some industry leaders are keen to avoid. At the bloggers press meeting this morning, we were given the chance to interview Hugo Burge of hereorthere.com. One of the key aspects of the hereorthere.com seems to be a desire to ‘inspire’ travellers at a stage when they have not yet selected the destination or the form that their travel might take - an area of the travel purchasing process Hugo believes has so far been underserved online. Which to my mind leaves open the possibility that even in a niche environment, potential travel bookers can be exposed to ideas that they might not originally have sought.

I suppose what I am moving toward here is the need for ’slightly imperfect’ information flows for customers that can give them clues about what there is on offer beyond their intended search parameters but which are not so wild as to be meaningless. Amazon.com of course do it in their recommendations lists (”Readers who bought this also bought this…”) and their ability to serve up interesting but not-quite-right recommendations can sometimes lead to more profitable avenues of exploration and enagagement.

Like Mr Rumsfeld said, their are ‘unknown knowns’ and tapping into the potential of a persons full spectrum of travel desires (however seemingly unknown they may be to that individual) is, I believe, key in a really excellent holiday experience.

Lets see what the other participants at the conference tomorrow have to say about this…!

Why data privacy should matter to us all

I love data. Yup, sets, charts, trends and ratios rock my world. And as you probably know, many of the posts in this blog are about collecting and using customer data to drive your business forward.

So does that mean I’m advocating a business should collect and store every bit of personal data about its customers that it possibly can?

Do I share Google’s vision of storing 100% of user (ie your) data?

Not at all. I believe that when we ask for personal data from a customer, we must understand that we are being trusted with something precious and that we have a responsibility to limit what we take and how we use it to within boundaries that are acceptable to both parties.

Here’s my exploration of why.

Data is power

For a business, customer data is knowledge and knowledge, as the saying goes, is power.

The power to make strategic decisions, power to delight customers by understanding and surpassing their needs, the power to boost conversions and the power to make our marketing work just that little bit harder than our competitors.

Businesses don’t generally collect data because they’re evil, they collect it because they want to do what they do better (including, of course, making money).

But data can be stored. Data can be lost, stolen or exposed. Data can be used in innocence or corruptly for purposes very different from those imagined when it was collected.

The data in its own right is benign. But start aggregating it, storing it, analysing it - then suddenly its power is explosive.

Have you met my data shadow?

Like you, everywhere I go as I conduct my life on and offline, I leave a data shadow. Not only does that data shadow mirror my actions, but to some extent it also mirrors a distorted approximation of my thoughts.

(Anyone unsure how your data shadow might reveal what you are thinking should check out this article about the AOL data release, when AOL made public the web searches made by 658,000 of its users over a three month period.)

And my data shadow is being stored.

Maybe its only being stored to speed up my online shopping cart process, so that I am more likely to buy. Perhaps it is stored to record my travel history, while I earn airlines or reward points. But may be its being stored for some unspecified purpose that will be decided at a later date. (Check out for this rather scary Guardian newspaper article about Facebook as a good example).

But, if I have nothing to hide, does it even matter?

I believe it does matter very much.

Yes, on a basic level, I simply don’t want strangers knowing everything about me. But at a more philosophical level, I believe am more than the sum parts of my data shadow. The trouble is, what is being stored for future retrival doesn’t reflect that. In 10 years time I will not exist as I do at this moment - but my data shadow from today will.

And it will exist in a very different context (and perhaps political climate) to when the data was collected.

“There is a view that the storage of personal data is only problematic for those with something to hide. But we cannot know for sure how data we supply today will be used tomorrow - goalposts shift, governments change - and not all are benign. When in 1933 the population of Germany provided their personal data for census purposes, they could have had no knowledge of ultimate consequences.” From An Uncertain Voyage, A British Computing Society article by Barry Blundell.

The trouble with context is it can change

What if the supermarket loyalty card data which you have readily handed over in exchange for points was used to prove you drank too much wine over the last 15 years, thereby denying you access to healthcare?

What if your airmiles & Tripadvisor data was used to calculate your share of responsibility for global warming and you were fined accordingly?

What if of your barely known Facebook “friends” commits an act of terrorism and every shred of your personal communication data becomes evidence? (After all, Facebook even has your mobile phone number).

These may seem far-fetched examples, but they all relate to data we readily hand over and cannot simply retrieve if we change our minds.

Taking responsibility

As consumers, I think we have to think a little harder before we hand over our personal data.

And as businesses (especially us data-huggers) I think we have to remember ask ourselves not just if we want this personal information, but also if we really need it. Because ultimately, we should not demand or solicit from our customers any data we would be reluctant to hand over ourselves. And we should respect and protect customer data as though it were our own.

(A document Google inadvertently released on the Web in March 2006 said it was moving toward being able to “store 100% of user data,” citing “emails, Web history, pictures, bookmarks” as a few examples). See this interesting Wall Street Journal article for more on the subject of Google Plans Service to Store Users’ Data

This week I have been invited by Darren Cronian of the TravelRants blog to pick my favourite posts in the Travel Blog Carnival. A virtual fiesta of travel themed blog content if you like!

I really enjoyed reading all the posts that were submitted and I’m pleased to be able to share my top-picks here - I hope you find them as interesting as I did.

Always the last to know…

This is a great post from the Get A Room Blog (or should that be a great plea?) for hotel guests to talk the hotel itself when there is a problem, before talking to the whole world.

As Don writes: “Just give them a chance. The last thing they want is for you to be unhappy… After all, the hotel’s goal is to welcome you back again.”

While I’d disagree with Don that it’s not the raves that make it on to online consumer sites like TripAdvisor (see this recent Tracking Tourism post) – I do otherwise completely agree with Don’s thinking in his post. As Rene Looper, a former hotelier, recently said in a comment here: “If you had a great time, tell TripAdvisor – but if you had a problem, tell us”.

Shock horror, a consumer-to-consumer site makes it to the pages of this decidedly b2b blog!

Aside from the fact that I like this post and Barbara’s Hole in the Donut blog generally, I’ve chosen this as I think it embodies consumer thinking in these hardening economic times.

Read how a devoted traveller, who has literally travelled the world, discovers for the first time the attractions that are right on her doorstep.

And as we’ve highlighted in this blog previously, all the statistical evidence coming in from the US suggests that in these times of potential recession, it is not just Barbara who will be looking at the tourism opportunities in her own back yard this year!

Social media sites, hype and non-takeover stories. Surely not?

Kevin May, editor of the Travolution blog, ponders just why it is that WAYN (The Where Are You Now community that claims to be the fastest growing travel and lifestyle social networking community website in the UK) seems to attract a disproportionate amount of attention in the travel industry for a site of its size.

Read Kevin’s post to see if some of that hype is justified.

Space Tourism in Cape Breton?

Finally, for those of us in Scotland who’re hoping that space tourism will have its birth here, Kim Kinrade reports in the White Point Manor blog that the Canadian government is still looking into the funding $45 million as its share for a rocket launching facility in Cape Breton, which would see the birth of “Space Tourism” in the province of Nova Scotia.

Mmm – does this mean Scotians old and new will be duelling in their spacesuits at dawn?

Previous picks from the Travel Blog Carnival

If you’re interested in reading more from the Travel Blog Carnival, see Darren’s carnival pages over at TravelRants.com. You can also find out how to submit your own posts for review.

See that customer? The one who’s simultaneously retreating out the door and avoiding all eye contact? What is the one question you’d really like to ask them?

What question would deliver maximum illumination, for minimum breath wastage - and help you fix any problem?

A smarty-pants might declare “why, its “Why?” of course!” And there are those who’d make a strong case for “How?”

Yet while “why?” may indeed be the best question in the universe, as a conversation opener it’s frankly a little scary.

Believe me, just hollering “Why?” at that retreating customer is going to make them run even faster. (And “How dare you?” won’t help much either).

It seems the perfect question clearly needs a little refinement before taking its place at the core of a business.

Perfect question(s) in action

Advocates of the Net Promoter Score would argue that the perfect business question is: “Would you recommend us to a friend or colleague?”

With this information obtained, the Net Promoter Score is then calculated as follows:

% of Promoters - % of Detractors = Net Promoter Score

While this is a very useful KPI, I think the challenge with the Net Promoter Score is knowing what to do next.

In my view the perfect question would help reveal a bit more of that “so what?” factor. In reality, that suggests a set of questions, rather than just the one.

Jim Sterne of Target Marketing and president of the Web Analytics Association talks about the perfect website survey, which asks just three questions:

1. Why did you visit this website today?
2. Did you achieve what you came for?
3. If not, why not?

This wonderfully simple survey establishes three important pieces of information. Specifically:

Customer Intent + Experience Outcome + Context

From this trifecta of data, a business has enough basic information to understand not only if there is a problem, but also the nature of the problem and whether action is necessary or appropriate. Without any one of the three pieces of data, the wrong conclusion could easily be drawn. (After all, an unsuccessful outcome doesn’t necessarily mean a problem).

The three questions identified in Jim’s survey are also surprisingly adaptable. It doesn’t take much to tweak them to suit a tourism business or destination, for example by asking:

1. Why did you visit XX on this occasion?
2. Did the visit meet your expectations?
3. If not, why not?

Of course, the key questions for you business may not be the same as those proposed by Jim. But I think these examples do give a view of how asking the right question can deliver data that can power business decisions.

But, while there may not be single perfect question, more like a little medley - don’t be tempted to overdo it. Two or three perfect questions that deliver maximum illumination, for minimum breath wastage beat a customer interrogation anytime.

If you’re going to ask great questions, don’t try and answer them too

A final tip - there is no point in asking great questions if you’re not going to listen to the answers. The answer to the perfect question is always a mystery until its uttered.

That means not forcing people to choose from a small selection of what you think their answer will be.

For example:

“There was a scorpion in the bathroom”
“My towels smelled of pizza”
“My ex was at the adjoining table”

Those are rarely options offered on tick box surveys!

For answers to the most critical questions to your business, ditch the tick boxes and let people actually tell you in their own words.

This adds to the time you’ll spend analysing the data - but it will give you answers you can actually use to make decisions.

Does this ring true for you?

Update, added 8th March - you might also be interested in this post by Avinash Kaushik, about 4Q, a new permission based on-exit survey that provides an easy to deploy framework to answer 4 questions that no website owner can live without.  Readers of this article may find those questions somewhat familiar!