Digital transformation execution for Tours, Activities and Attractions operators

If you are involved as an operator large or small in the fast-growing, rapidly changing $180Billion Tours, Activities and Attractions industry you are privileged to be included in the best part of the travel industry.

People travel to experience, learn and develop and we lucky few involved in the industry get to provide this person to person and put smiles on millions of guests faces each year. Beats working for a living!

I am on a mission to get operators in the sector to focus on digital leadership and execution in the same way that they focus on executing fantastic customer experiences in person.

Please read the article below before this one for context:

https://www.thedigitaltransformationpeople.com/channels/strategy-and-innovation/digital-leadership-failure-in-the-tours-activities-and-attractions-industry/.

Some housekeeping descriptions first:

Non-Digital Operators– Deemed as those who have established businesses or startups but not using online reservations systems that have API connections allowing them to build online networks with other companies, travel trade partners, OTA’s

Developed Digital Operators – I am classing those that have reasonable to good online exposure and using multiple online technologies to drive their businesses and have a full understanding of channel marketing, margins and yield. These operators will have a much better idea of their customer profile and online journey.

Non-Digital Operators

As reported by all the travel research organisations this accounts for around 80% of the industry. This presents huge opportunity and challenge.

Basic business leadership skills still remain for these non-digital businesses, but they need to be enhanced. It is not enough to fully understand your current business as it currently is and operates. Operators need to develop and combine high-level business knowledge, experience and digital understanding to develop Digital Transformation for the company fully integrated with their business objectives. This is not a short project this is a strategic long term, never-ending journey of constant businesses development in a digital world.

In the majority of cases, it is unlikely that the current management will have those skills or the ability to gain them as they are too busy running the business and delivering exceptional customer experiences. Therefore serious consideration needs to be given to bringing in someone who has this skill base.

For those that think they cannot afford this, I would argue you cannot afford not to so decisions need to be made. It can be learned so maybe you remove yourself from the business in order to learn and oversee implementation or maybe you work with an agency or consultant. Maybe a small group of local operators get together to help each other on the journey and split the cost of expert help. One size does not fit all but operators need to act.

Some simple suggestions to start the journey

1. Really understand your customer profile. Focus on this more than you have ever done as in a digital environment you will not be able to be all things to all people you really need to focus.

2. Create a persona around your perfect customer profile; this creates excellent focus and serves as a point of reference for decisions being made going forward for years to come.

3. Get an understanding of the total market size your persona has and the addressable market size that you think you can target or have the desire to target.

4. Work through the total life cycle of your customer and how your service/product fits into it where and when and how many times

5. Understand the margins of your product inside out and upside down in both direct and indirect channels and do not focus on revenue percentages focus on profit percentages.

6. Based on your customer profiles and the product match to the customer profile this will tell you the split in your strategy between direct business and indirect business. You really need to understand this as all companies are different and have to develop a tailored distribution strategy to their own business.

7. If you are going mainly direct understand the costs of doing so and then make sure you have the very best search and SEO listings you can and the very best social media presence you can. Make sure your products are online and bookable online. Note! It depends on your products/service, not all products are suitable for online booking.

I personally only put a small number of our services available for online booking. Split test them if you are not sure. Online versus offline? Make sure if you are displacing offline that it is not coming in at less profit by being online and ensure your conversion rates do not drop. In simple terms, the more straight forward your product/service the more suitable for online booking the more complex a product service the more online should be driving conversations that lead to bookings.

These folks  https://tourismmarketing.agency/  produce great videos to help you understand all this. The bad news is although this is complex for many it is really just the basics and it takes time and effort. The social media presence is a must but is a never-ending time commitment that will only reward you with bookings if you understand how to market via it.

8. Indirect business, operators need to develop local indirect business first with partners, other operators, accommodation, transport providers and so on. You have been doing this for years but start to work with them to take if from offline to online as the customer is demanding online at all touch points. Once you have addressed the local partners then decide which global international partners you want to work with and is your product suitable for them.

Global OTA’s are only 10% of the total industry just now, but you would not think so the amount of attention they get. They have a role to play for most operators, and they will grow their % of the sector, but if your business model based on OTA’s first or only then I would deem that as a very high-risk model. Focus on developing local networks as that can easily outperform OTA’s.

If your business model is 100% overseas inbound guests then you are going to be more OTA focused but you can still build networks in your target countries with other tour operators and travel agencies. The more online and digital the networks the better.

9. Get the business hooked up with the plumbers in the industry. These are the reservation systems that have been around for over a decade now but still only have about 20% of the industry using them. There are now more than a few dozen different reservation systems. Trekksoft, Tourcms, Rezdy, Peek, Checkfront, Rezgo, Bookingkit and many more.

No matter who you sign up with, they will improve your business. The biggest gain I got when I started using them back in 2008 was not the increased distribution that the industry shouts about but the increased efficiency in my business. Moving to cloud-based systems saved us significant funds and gave us operational efficiency as well as allowing us to make better business decisions based on live data.

From a personal point of view, it also allowed me to lead the business from anywhere in the World which is lucky as I am addicted to travel and adventure. If you are not using an industry connected reservation system sign up this week, now, yesterday!

The guys at Trekksoft are running a free business school for tour and activity providers see

https://www.trekksoft.com/tour-activity-business-school-2019

10. Getting the above lot sorted is not easy or quick especially for small operators. I have done it and experienced the pain but it is a must do. When you get to this point, you can really start to think about global distribution and how you are going to use the technology both directly and indirectly to help you grow your business by reaching potential customers in a way they expect today.

The above is not a digital transformation; it is far from it. It is just the digital basics that a small operator needs to understand, do and experience to enable further thought and development on how to transform your business into a digital powerhouse further along the journey.

I have made the assumption that your product or service is exceptional and your customers love it and are prepared to pay for it and recommend to others. If it is not then you have other issues that need to be addressed as having an exceptional product and service is the entry ticket to allow you to be in the game.

Design from the customer backwards, always! The leadership you demonstrated creating and developing your business in the past is going to be tested more than ever in the digital environment. Just to stay at pace with the changes is going to take a huge effort but not engaging is accepting that your business is going to decline and die, It will not do so today but it will for sure going forward.

Developed Digital Operators

Changing well-established businesses is where this gets hugely challenging. Developed operators can be anything from small businesses with a few staff to large companies with multi-million revenue, valuable assets, and tens of thousands of clients per year. They are well established and already have a good digital presence, but the market and the customer is still developing and changing much faster than they are. In short, they are being disrupted. Some know it some do not.

Change at the level I am proposing here is incredibly difficult. Many will not attempt it until the market forces action and most who do attempt it will fail. That is not my opinion — extensive research reports from cross-industry from folks more clever than me highlight that challenge and failure rate.

My next article will be long and detailed focusing on this challenge for established businesses in the tours, activities and attractions sector.

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