Why Accommodation, Tours, Activities, Attractions, and Food sectors need to Digitally step up. Just now Scotland has a booming tourism industry but all booms eventually go bust and the industry certainly went through tough times after the financial crash of 2008. When the sun is shining is the time to invest and fix the roof as tougher times may just be around the corner! The huge challenges of the Global Economy and the Brexit mess we can do nothing about, however, other challenges we can!
Two massive changes that will drive and impact on all global tourism that we need to address
- How people discover things to experience
- How people experience our products and services
How people discover things to experience is via the huge multitude of digital platforms. Yes of course offline still plays a diminishing part but we are fixing the roof for the future, not for today. The last 20 years have seen our fragmented tourism industry be dragged kicking and fighting into the digital age without any real desire to be their or any real strategic plan on how to adapt to this changed landscape. This lack of understanding, knowledge and desire to become digital has allowed huge opportunities for new, clever, digital native businesses to enter space and capture value on a massive scale. Booking Holdings, Expedia, Airbnb, the list is long but the one thing they all have in common, no matter what sector of the industry they address is they think and act digitally first and have exacting customer focus.
Scotland has a fantastic range of tours, activities and attractions that form part of the Global $180 Billion dollar sector of tourism. Scotland also has increasingly an outstanding range, depth and quality of accommodation options with food offerings to match. People travel to do experiences and they need great accommodation and food options to complement their experiences. The issue we have in Scotland is we are not offering the customer simple straight forward booking options for the range of things they will do when visiting at every digital touchpoint that they will visit pre and during the visit.
The huge OTA’s and global travel businesses see this as a huge opportunity and they are 100% correct and they are working extremely hard and investing massively in order to capture the potential. They already have a huge market share of accommodation and they want to compliment that with, tours, activities, attractions and food.
In spite of the massive investments, they are making and the industry being able to see and understand the direction of travel the Scottish tourism industry is reacting at the speed of a sloth who has just filled its belly. Only approx 20% of local tours and activities are available online via direct means never mind via collaborative joined up marketing across the different complimentary sectors.
Why are we lagging behind the customer and the direction of travel ( excuse the pun) There are two main reasons.
1.The highly fragmented nature of this sector and travel consumer behaviour and preferences.
2. The laziness of the sector to understand the customer and invest and provide the customer with not just what they want but what they are habitually addicted to! Hint " Digital & Mobile"
The sector is made up of a huge amount of small businesses that are independently owned and fragmented. Most have a internet presence at a basic level but online booking is still the rarity rather than the normal. 10 Years ago you could argue they did not have the resources available to have online bookings and technology to run their businesses. Today with cloud SAAS systems being available for every niche at cheap rates that is no longer an excuse. If Scottish tourism businesses cannot do this for their own 100% direct business channel then the chances of getting them to collaborate across sectors in the digital space to offer the customer what they want is nothing but a pipe dream. However, that space will be filled by those who understand the potential and then all you will hear is cries of pain from the industry about the dominance of the OTA’s and other large players and the commission levels they will demand to be part of their ecosystems.
Customers are currently booking between 70-89% of their activities, tours and attractions when in the destination or in the last 48hrs. Those that capture this opportunity will reap huge benefits, walk around any city or destination and study the visitors. They use their phone constantly! They are looking for interesting things to do online when they find them, they want to book them and go in real time!
Why the Scottish accommodation sector needs to develop quickly.
The hotel sector and to a lesser extent the alternative accommodation sector has been turned a commodity. I am sure I am not alone in booking last minute hotel rooms when in a destination based on location and price. The accommodation sector is selling on price instead of value and they are in a dog fight with the OTA’s over who owns the customer. Accommodation providers could create value by becoming “ Experience Hubs ” Who know a local city or area better, an OTA or a local hotel that has invested in physical assets and people over many years? The knowledge and experience within a hotel or accommodation provider about the local area and what a guest can experience is immense. However, it is of zero use if you do not communicate it to the guest in a digital manner because guests increasingly do not pick up leaflets or speak to staff team members about what to do and where. This is especially true if English is not their first language.
This major advantage accommodation providers has over OTA’s is not being understood or acted upon. What visitor would not want to stay in a hub that has answers to all questions with regards, local restaurants, local experiences, local history and museums, local, local sport, local nightlife and so on? Local, local, local is not just a tactical advantage it is a strategic barrier that can be built to create a digital experience that cannot be matched by OTA’s. Delivering this content and knowledge needs to be via means the customer is addicted to and that is their mobile phone and anything digital!
This obsession with providing the best possible digital experience for guests backed up with what Scotland already excels during the face to face part of experiences is not just where the industry should go it is where it has to go to survive and thrive.
Accommodation providers need to become digital knowledge hubs of everything local that their guests could possibly aspire to experience. This means collaboration on a digital level that is currently not happening but is where huge value resides for all those in the local tourism ecosystem.
Where is the reward in £ terms?
No business does anything without seeing the potential to increase the enjoyment and experience of their guests and also make money at the same time.
By making accommodation into local experience hubs the owners will increase revenue by working with tour and activity providers, restaurants, museums, sports events etc. The vast majority of the providers of the services in a destination are more than willing to pay a fare commission level that drops straight to the accommodation providers bottom line.
The second point is more political. The more collaboration that goes on in the destination at scale helps to enable local businesses to invest in staff training, assets refurbishment and yes keep up with technology. Compared to more and more tourist spend going to global level platforms that add very little value locally. Remember very few OTA platforms inspire people to travel to a destination. They are masters of converting the transaction once someone has decided to visit a destination.
So what should we do?
Phase 1. At a national level identify accommodation providers who are already digitally capable and convince them of the strategic and tactical benefits of becoming customer experience hubs in their destination. Identify tour, activity, attraction, restaurant, providers around these hubs who are already digitally capable. Try and get a great geographical spread covering Scotland.
Phase 2. Bring them together locally in clusters that make geographic sense to develop packages and product sets that their guests will love to experience. Develop add-ons to the accommodation booking that represent the location and culture of that location.
Phase 3. Ensure that the experiences are promoted all the way through the customer's potential lifecycle. Each phase of the customer's journey needs to be addressed including. Dreaming, Planning, Booking, In Destination, Post destination Departure.
Phase 4. Measure the pilot projects and document their journeys to those that follow will not waste time reinventing the wheel.
We have enough tourism professionals around to develop each of the three phases above into outstanding digital customer offerings.
The accommodation sector of the Scottish Tourism industry needs to wake up and look beyond just beds and rooms. You lost control of your distribution by not being focused on the rapidly changing customer. You now have an opportunity to reinvent accommodation to serve guests in a much more rounded and comprehensive manner gaining loyalty, reviews that spread, and yes extra revenue.
The tours, activities and attractions of the industry need not just wake up but get its finger out its backside and realise that the world has changed and the change that is coming will make the last 10 years look like the dark ages. It is no longer acceptable just to be outstanding at delivering the guest experience face to face that same outstanding service has to be at every digital touch point. If you do not take control of your industry that you have built others will be very happy to do it for you and extract huge value from the Scottish Tourism Economy.
Collaboration is difficult especially between sectors that do not really understand each other. However, this is not a technology challenge. The technology is available at reasonable cost. This is an understanding and willingness issue for those of us in the sector to come together to work together to better serve our guests. If we do not, others will, and then we can all complain about how much we have to pay them and ask for them to be regulated because we were too lazy to do anything proactive in the first place. The huge economic value of Tours, Activities, Attractions, Food is going to be unlocked digitally. It is only a matter of time and by who!