M5 – Innovative tips and practices for business management in the field of tourism

Introduction

In order for a tourist package to be competitive, its content is increasingly customized, and the main resource for this is in most cases innovation. Therefore, better efficiency will be achieved by those who quickly learn how to provide better services in the market and / or provide differentiated services compared to the competition. Consumers of tourism want solutions to their problems, not the services that tourism offers. As a result, the goals of the tourism business are no longer expressed through lower prices, highly skilled labor and better management, but through customer satisfaction! Entrepreneurs in tourism are increasingly striving to design added value, by analyzing and sifting every small variable, every weak signal, every strategy, budget and control plan, in order to be able to understand the variations and changes of consumer needs in tourism, to choose the most relevant market segments so that they can develop the siutable offer. An appropriate helper to solve all these challenges seems to be innovation.

Innovative practices in tourism.

Innovative practice means “to make a change, to introduce a novelty in a given field in a certain system”. Innovation means “novelty, change, transformation”. The Oslo Manual (OECD and Eurostat, 2005 – OECD and Eurostat, 2005) defines innovation as “a significantly improved product (goods or services) or process, a new marketing method or a new organizational method, a business method or the creation and management of external relations”. In this approach, innovation differs from the original source in the need to place it on the market and the need to provide added value. In general, in business and especially in tourism, innovation is “creating significant new value for customers and the company through creative change of one or more dimensions of the business system ” (Sawhney et al., 2011, p. 28). To innovate, companies must have innovative skills, defined as the use of knowledge to successfully put new ideas into practice. (Zhao et al, 2005). The business presentation has had and will have its source in the innovation act. Business performance – in its own market, in customer relations, etc. is the result of technical and social innovation. The specialized literature deals with innovations from several perspectives: innovation as a product, innovation as a process, and innovation management. Product innovation deals with new or significantly improved products in which it targets specific target markets. New techniques, methods or improvements from different departments / structures (production, trade) give birth to innovations in the process. Through innovation management we understand the creation of the type of organizational culture (as a set of collective values, beliefs, principles and practices of traditions settled over time, recognized and accepted by the members of the organization), in which innovative behavior is encouraged and rewarded. Innovation management refers to the creation of a kind of organizational culture in which innovative behavior is encouraged and rewarded. For business, all these elements of organizational culture (values, traditions, principles, practices) are transmitted mainly orally, through the direct participation of the founders of the organization, the founders-entrepreneurs. It is known that the working climate significantly determines creative thinking (Ekvall, 1996; Amabile et al., 1996 Sternberg, 2005). The challenge for every entrepreneur is to be both creative and effective. Studies show how difficult it is to achieve this condition (Amabile, 2002; Mehri, 2006). The solutions seem to be linked to creating a climate of trust, encouragement and empowerment of staff. According to Zwilling, elements that contribute to an innovative culture are: promoting passion, acknowledging contributions, rewarding good new ideas, awarding prizes for courage, downplaying failures, small group discussions, promoting diversity.

Product innovation and process innovation are known in three different forms:

1. Innovation through accumulation or improvement – it is about designing a product with improved performance, designed to cope better and meet the needs of consumers. Consumers do not have to learn new consumer behavior, but only to adapt to the new state.
2. Synthetic innovations involve combining creative ideas or existing technologies. This type of continuous and dynamic innovation results in products that change the normal behavior of consumption; interrupts the user routine, but does not require comprehensive training.
3. Radical innovation – creating a completely new product that represents a leap from those actually available on the market. Establishes new consumer habits among consumers and this requires a completely new learning process.

Peter Drucker in his book on innovation (Drucker, 1993) recommends the adoption of five principles of action that can give the organization a competitive advantage.

First, he starts with identifying opportunities. He then analyzes the possibilities to see if people are interested in using the information. Innovation must be simple and clearly focused on a specific need. Effective innovation starts slowly because it concerns a limited market, and then, as the market grows, it makes fine adjustments to prevent competition. Innovation must be focused on supremacy, otherwise it fails to impose itself and will only create an opportunity for competitors.

It is rightly said that “if you know what you really want, you create opportunities yourself and make the most of them.” It’s about understanding the situation before you have a plan. Innovation management tells us what we are becoming, not just what we are doing.

It is more convenient for an organization to produce new products with existing technology than to introduce new technology that is more expensive; however, the latter approach demonstrates its long-term feasibility. The progress of human society is due both to scientific discoveries and technologies and to the growing managerial expertise.

The management process is understood as a series of decisions and actions designed to enable the organization to define and achieve its goals.

In a tourism organization, real management, which is focused on innovation as a result of understanding the imperatives of the day, requires managers to achieve efficient use of resources, make the organization responsive to its environment and enable people to perceive the positive relationship that can be built between business and individual goals.

Relationship between innovation and contextual factors.

Improving business is closely linked to promoting and supporting a culture of innovation within the organization. It includes the following: work environment, organizational culture as well as mental programming and values. These are factors that are grouped together and are called: contextual factors. The work environment supports and encourages innovation through a cultural component, respectively targets intellectual aspects of civilization. Here we are talking about: “the environment to which individuals belong, openness and diversity, cultural environment, technology, institutional environment” (KEA European Affairs, 2009). The environment to which individuals belong takes into account the knowledge, skills, competencies and qualities of individuals that facilitate the creation of personal prosperity and social as well as economic wealth. The people who make up the environment are formed by the economic level, and also by values and cultural norms, namely “collective mental programming, which makes us accept something together as members of the group to which we belong” (Hofstede: 2006). The modern concept of economic development states that diversity and exchange of ideas, as key components of an open society, are sources of innovation that play an important role in creating powerful and dynamic cities. The cultural environment is essential for the development of society, as an ideal facilitator for the birth of new ideas. The very existence of art is not enough. To stimulate creativity, it is important to constantly expose people to the influence of art and culture. The crucial role of information and communication technologies (ICT) in economic and social development in the 21st century and in activating Europe’s creative potential has been recognized. People are forming “virtual and digital habits” and have replaced the traditional business model with one that is highly impregnated in the electronic environment. Digital technologies generate two opposite trends, manifesting themselves simultaneously – known as “two-way travel” (Castells: 2001). In this way, on the one hand, the culture becomes global as media companies manage to cover the whole planet and provide creative and diverse content for a diverse audience, and on the other hand, the culture becomes personalized, becoming more local, focusing on engagement, not experience. New technologies give rise to new forms of creative activities, such as computer animation, digital graphics and others. Elements that are becoming increasingly important for efficiency by travel companies.

The well-being of societies and states is linked to the transparency and accountability of regulatory institutions. American professor Michael Porter has established a link between a country’s competitiveness and various institutional factors, including the advantage of state law and compatibility with public policy (Porter, 1985). If we talk about culture as a factor to support and encourage innovation, in the world literature on governance, the Dutchman Geert Hofstede has established himself as an analyst who treats culture as an element that is “the basis of thoughts, feelings and actions of individuals, organizations and nations ”(Hofstede, 1996). Hofstede uses the analogy of computer programming, but we find that humans are not computers. From the terms used by Hofstede to describe the manifestations of culture, the concept is covered almost entirely by the following four terms: symbols, characters, rituals and values. Values ​​can be derived from the way people act in different circumstances. In this respect, it is useful to carry out the monitoring systematically, according to a plan that records the in-depth and clear reactions and behaviors contained in a tourism research program. This is the most appropriate method, because it is known that people think in a certain way and express themselves in a different way, and in the end, they do something completely different from what they have thought and said. Collecting survey results remains a useful activity, but the answers should not be taken literally.

Innovation capacity is influenced by contextual factors: environment, culture as psychological programming and human values.

The relationship between innovation and organizational variables.

The second group of factors that determine the performance in the business are called organizational factors, and these are: commitment of management, system perspective, training and practice of experimentation, rapid transfer of knowledge within the organization. According to Kreitner (who identifies a formula for managerial success), the formula for entrepreneurial success is:

S = A x M x O

Where success (S) is a product of entrepreneurial ability (A), motivation (M) and opportunity management (O).

Management ability is defined as the demonstrated ability to perform and achieve organizational goals, effectively and efficiently. In this framework, examples of important skills are the following: to plan, to organize, to lead, to make decisions, to communicate orally and in writing. For the individual, the motivation to lead is a strong and persistent desire to make progress, to push forward the organization he leads. Some key elements are: willingness to take responsibility, desire to exercise power and authority over others, desire to achieve tangible and real results in an effective and efficient way. The formula is designed so that if one of the indicators is zero, the managerial success is also zero. The task of managing innovation and adapting to change, as well as using knowledge as a separate resource, is to create a climate in which employees feel encouraged and rewarded to learn systematically.

An evolving organization is an organization that achieves good results in the act of creating, in acquiring and transferring knowledge, and in modifying behavior to reflect new knowledge. The learning organization represents a new paradigm in management.

A detailed analysis of the organizations is presented by Senge. The author opens a perspective and offers guidelines for action that converge on building a learning organization (Senge: 1990). There are no suggestions for models, but a discussion; moreover, “there are no models to mimic, no control by copying” (Toffler, 1999). Learning organizations focus on: addressing and solving systemic problems, experimenting with some new ideas, learning from others, rapid transfer of knowledge within the organization. These organizations are based on work teams and have a free flow of information.

The capacity for innovation is influenced by these organizational factors (managerial commitment, systemic perspective, training and practice of experimentation, rapid transfer of knowledge within the organization).

The relationship between innovation and company productivity.

Although there has been a lot of research over the last 20 years on the relationship between innovation and productivity, so far product innovation and process innovation, and also their impact, have not been highlighted enough. It is also worth mentioning that there are no cases in this area. The ability of the organization to satisfy customers is organically linked to the capacity for innovation (Usaahawanitchakit: 2008). In tourism, we need entrepreneurs whose business is not exclusively dedicated to emerging issues, but these entrepreneurs must also be able to respond to existing social, economic or even artistic problems. The role of innovation is to increase the value of the product or service offered. In tourism, what is sold is mainly “experience”. Customers evaluate the tourist product, relying on the image created in relation to this product. Also, we must certainly take into account the complexity of the tourism product, which most often covers more markets, together with different operators. When one innovates, the degree to which the innovation refers is only one aspect of the matter. More of the innovation components need to be identified, in which case we need to ensure the availability of everyone involved to implement the innovation. The development of innovative products and their inclusion in various types of proposals such as: rural tourism, spa tourism, urban holidays, as well as adventure and active tourism, would be an innovative feature designed to increase tourism performance.

Travel companies that have embraced innovation have more customers and their economic performance is better, i.e. above the profit average. This allows differentiation from other companies, having a positive impact on performance. Innovation contributes to the company’s survival, which has been highlighted by numerous studies (Calantone et al., 2002).

According to Hjaeleger, for tourism, the most appropriate type of innovation seems to be “niche innovation”. (OECD, Innovation and Growth in Tourism: 2006). This is based on supporting and encouraging employers who take advantage of the opportunity to develop new products, to combine existing products in new ways, to encourage companies in tourism and related industries to join unions and clusters. The Stage & Gate model is one of the most appropriate in this regard, as it requires an evaluation phase after each stage of the innovation process, including: identification of ideas; selection of ideas; concept development and concept testing for each product; business analysis; market testing; launching the distribution of the new product (Edgett, 2014).

Sources and additional resources on the topic:

• Amabile, T., Conti, R., Coon, H. and Herron, M., (1996), “Assessing the Work Environment for Creativity”, Academy of Management
• Journal, Vol. 39, No.5, pp.1154-1184.
• Amabile, T., Handley, C. and Kramer, S., (2002) “Creativity under the gun”, Harvard Business Review, August, pp.52-61.
• Drucker, P. F., (1993), “Inovaţia şi sistemul antreprenorial”, Editura Enciclopedică, Bucureşti.
• Edgett, S.J. (2014)„People a Key to Innovation Capability”, European Business Review, March-Aprilie, pp.10-12 http://www.prod-dev.com/research_articles.php
• Ekvall, G., (1996), “Organizational Climate for Creativity and Innovation”, European Journaл of Work and Organizational Psychology, vol. 5, No.1, pp.105-123.
• Garelli, S., (2008), “Competitiveness 20 years Later”, IMD World Competitivenes Yearbook.
• Mehri, S., (2006), “The Darkner Side of Lean: An Insider`s Perspective of Realities of the Toyota Production System”, Academy of Management perspectives, May, pp.21-43.
• Sawhney M., Wolcott, R. C., and Arronity, I., (2011), “The 12 different ways for companies to innovate”, Sloan Management Review, winter, pp. 28-34.
• Stefănescu, F., Bekesi, D., (2012), ”The Economy in Bihor County in the Context of the Global Financial and Economic Crisis”, Analele Universităţii din Oradea, Seria ştiinţe economice, tom XXI, pp.1087-1091.
• Sternberg, R.J., (2005), “Handbook of Creativity”, Cambridge University Press, New York.
• Tanţău, D. A., (2011), “Entreprenurship. Gândeşte inovator şi pragmatic”, Editura Ch Beck, Bucureşti.
• Zhao, H., Tong, X., Wong, P. K. and Zhu, J., (2005), “Types of technology sourcing and innovative capability. An exploratory study of Singapore manufacturing firms”, Journal of High Technology Management Research, Vol. 16, pp.209-224.
• Wei-Chiang H., (2008), “Competitiveness in the tourism sector”, Physica-Verlag.
• World Economic Forum, (2012) The Travel and Tourism Competitiveness Report 2011.
• “APA PsycNet.” American Psychological Association https://psycnet.apa.org/record/2005-07670-000
• “Creativity Under the Gun.” Harvard Business Review. August 01, 2014. https://hbr.org/2002/08/creativity-under-the-gun
• Oslo Manual: Guidelines for Collecting and Interpreting Technological Innovation Data. Organisation for Economic Co-operation and Development Statistical Office of the European Communities, 2005.

The processes in any type of business can be innovative. The tourism business is no exception. In this topic we will look at how an innovative tourism product can be reached through business processes. In the same way, the processes for the development of the tourist product can and should be innovative and help to achieve the overall and rapid development of each tourist destination.

The basis of product development is the creation of such a tourism product, which includes process innovations. At this stage it is necessary to analyze how the tourism system works in a given destination or attraction.

There is a great variety of tourist resources: historical sites, nature, seaside resorts, cultural monuments, hospitable people, etc. The variety of new tourism products that can be developed on the basis of these basic components is huge. This requires knowledge of which components to combine, which markets to choose, and what results to predict before a decision is made. A critical factor in this process is determining the desired results. For example, if an influx of tourists would upset the balance of the environment in an area, then the development of tourism in it would be unacceptable. Very often tourist experiences (such as various thrills, and many of the so-called hobby trips) take place in rural areas where commercial tourism is not developed. For example, the motivation of the tourist to take a cycling tour in the rural areas of Uzbekistan is cycling itself, not the destination. Therefore, one of the main criteria in the development of tourism is the establishment of such a geographical area (city, region, country, etc.) that needs to accept this type of tourism.

We can consider this issue bilaterally:

• development of a new tourist destination on the one hand
• restoration of an existing tourist destination

In some cases, a new tourism product, such as an “experience” product, can be successful in both types of destinations. In other cases, alternative types of tourism, such as ecotourism or cultural tourism, are only possible in new destinations and not in already highly commercialized destinations.

Product innovation process

Tourism is a highly competitive industry. Tourists can choose from tens of thousands of destinations and products.

Tourist resources are the basis for the development of tourism, and are often the main motive of tourists to visit a destination. Conservation and management of resources are paramount. Without proper planning and management, valuable resources can be lost.

Resources with tourist potential

• Natural resources: parks, lakes, beaches, picturesque places, etc.
• Cultural landmarks: monuments, museums, historical sites, etc.
• Contemporary and traditional culture: art, culinary works, folklore, crafts, music, architecture, life, etc.
• Anthropogenic attractions: balneological resorts, ski resorts, golf courses, conference centers, etc.
• Activities: hiking, rock climbing, cycling, fishing, bird watching.

Attractions can be classified according to:

• Form of ownership: State, private (commercial or non-profit)
• Permanency: Some attractions are associated with an object and have a permanent fixed location, while others are associated with a specific event and have a short-term variable location.

Attractions can also be categorized into the following eleven categories. Some attractions belong to several categories at the same time, so they should be placed in the category in which they have the greatest potential:

Natural: natural resources such as forested areas, waterways, flora and fauna, and their associated ecosystems. Often this type of resource is public property in order to be protected from destruction.

Historical: historical, natural or anthropogenic sites. Such sites need restoration and careful interpretation to convey the true value of the destination.

Ethnic / cultural: this category includes any cultural or ethnic situation, such as the way in which a social or ethnic group practices its religion, celebrates its holidays and carries out its daily activities. Often local societies do not realize that their customs are different. It is important that societies do not feel exploited for tourism, and that the integrity of communities is preserved.

Special events: festivals or large-scale events can generate significant short-term tourism. The long-term effect of such events is more difficult to determine.

Amusement parks: man-made parks, or private parks, such as theme parks and amusement parks. This type of tourism has grown tremendously recently. Often such resorts are the result of carefully planned tourist development.

Business: cities and urban areas. Tourism in such destinations can be for work or leisure. Congress tourism makes up a large part of this sector.

Health: health tourism is an ever-evolving sector of the tourism industry. People generally strive for a healthier lifestyle, including during their holidays. Mineral baths, health resorts and specialized medical centers are examples of attractions in this category. Homeopathic remedies and natural remedies typical of the area also belong to this category.

Friends and relatives: this category represents a large part of the tourist market, but it is difficult to trace where and when people visit relatives and friends. If a destination is close to a market that attracts family and friends, efforts should be made to encourage these visitors to bring guests with them.

Religious: this type of attraction is usually caused by faith or a religious phenomenon

Government: government centers, such as regional and national capitals, often offer many attractions. Very often they are not only the seat of governments, but also the bearers of the history and culture of the area through museums, monuments and other landmarks.

Other attractions: zoos, aquariums, arenas and more. Although they fall into one category, they have their own individual significance.

Recommendations for product development in destinations

After an inventory of all attractions in an area is made, the process continues with the development of tourist products in the destination. As already noted, attractions are the main reason why tourists visit an area, and therefore, product development must emphasize the attractions, and subsequently the relevant services. The University of Minnesota Tourism Center identifies five criteria for evaluating attractions after conducting the inventory:

Authenticity: Tourists visit certain destinations for a limited period of time. The satisfaction of the visit will be much greater if they can feel as a part of the community, and when the experience is real.

Quality: Tourists want value for money, and quality is part of that value. The services provided contribute in part to the overall quality assessment. The degree of protection of resources, incl. natural and socio-cultural must also be taken into account. The relevant community must assess the quality of an attraction at all levels.

Uniqueness: With the inclusion of tourism in the overall program for economic development of a given area, the need for new alternative tourism products becomes obvious. Regions that mimic existing attractions offer nothing new to tourists. Once the inventory is made, many new opportunities will be discovered, based on which a package of tourist products should be created, offering new experience for the consumer.

Attraction: In essence, attraction is a function of how far tourists are willing to travel, where they come from and how they will get to an attraction. Attractions are divided into primary and secondary. Primary attractions are at the heart of the destination’s marketing strategy, while secondary attractions provide additional opportunities for visitors after visiting the primary attractions, and are also important for the development of the destination.

Expanding the business: A unique attraction is never enough. Tourists must have many tempting opportunities to make them stay longer in the destination and take part in more activities. In developing these options, they must take into account the main attractions and the cultural and natural resources of the community.

The next step in the development of the tourist product is the creation of a suitable package of attractions. This is done on the basis of the information obtained in the previous two steps, inventory and evaluation. According to Gartner, there are two ways to properly package attractions – natural grouping and thematic grouping. Natural grouping is the grouping of similar attractions in order to increase the total value of each attraction. As Gartner explains, “An old building is an old building, while ten old buildings are a historic neighborhood.” Attractions, which in themselves do not have much attraction, can be grouped with other similar attractions to create a primary attraction. This not only increases the attraction and reduces marketing costs, but also increases the tourist’s choice.

In the thematic grouping, an image is created, which is imposed on the whole attraction. Theme parks follow the example of Disney, creating fabulous destinations around the world. The thematicity of an area is not achieved only by creating parks. An entire community can acquire its own identity, such as a restored village or a characteristic area. According to Gartner, “the idea of ​​thematic grouping is uniqueness.” At the heart of this process is the creation of a unique image that can be maintained throughout the attraction.

 

Innovative development of tourist products.

The basis is the research. The main factors in decision-making are the observed trends in employment, market, growth or decline of individual areas.

• Is there a need for new tourism products?
• Is there a need to diversify the market of arriving tourists?
• Should all resources be used to strengthen and improve existing tourism products or should some of these resources be used to create new products that would diversify supply?

The first stage of developing a new tourism product is the birth of an idea. It is best to create a list of ideas for new products, which later will be considered and only the most suitable will be selected. By new product we mean an original concept or idea, not an improvement of an existing product. It is important for the organization to stay true to its goals when looking for opportunities for new products. Developing a new product that does not comply with the organization’s policies can have the opposite effect. The organization must develop a systematic plan for developing products in accordance with its needs, which clearly defines the expectations of customers, competition, suppliers and distributors. The plan must also include the necessary resources for this process.

The second stage of the process is the screening of ideas. After generating ideas, you can begin the process of selecting the most appropriate ones and eliminating the rest. The purpose of this stage is to check whether the products meet the goals of the organization. The following issues need to be addressed when establishing product compatibility:

• Does the product contribute to the achievement of the business mission of the organization?
• Does it meet the goals of the business?
• Does it promote the core business of the organization?
• Does it satisfy the key customers and do they like it?
• Does it use existing resources in a better way?
• Does it maintain and improve existing product lines?

After eliminating the inappropriate ideas, the process of developing and testing existing concepts can begin. At this stage, preliminary testing of the specific product concept is performed. It is unwise to develop a new product without prior inspection. For example, a fast food chain will not launch a new product in its menu throughout the chain until it has been tested at several sites. This saves huge costs and wasted time in case the product fails. However, testing the product on the market is not a guarantee of success, but reduces the likelihood of failure.

The next stage is the development of a marketing strategy for the new product. The market strategy is used to introduce the new product to the market. It defines the target market of the product, its positioning and goals. It must also set goals such as expected profits and budgetary costs.

The stage of business analysis follows, in which an assessment is made of what has been achieved so far. The product concept and marketing strategy are reviewed to determine if the product meets the needs of the organization and if it would be successful.

Once the business analysis is done, you can move on to product development. At this stage, a prototype is created that answers the following questions:

• Do consumers perceive the product as envisaged in the concept?
• Is it possible to be produced within the budget?
• Does it work safely under normal use?

The next step is to test the marketing of the product. Preliminary testing is used to detect problems before the product is fully introduced. Each element of product marketing is evaluated, namely: positioning, advertising, distribution, pricing, packaging and costs. The time it takes to test marketing depends on the product. For example, if your goal is to introduce a first-of-its-kind product to the market, testing it for too long will allow the competition to stay ahead of you.

The last stage is the commissioning of the product – its realization on the market. After all these steps, it should be decided whether to place the product on the market or not. If the product is to be launched, all other details must be specified. Significant decisions such as when, where, to whom and how to release the product determine its future perception.

 

Determining competitors.

Nowadays, it is possible to make a study of travel companies that offer travel trips for special interests. You can compare the list of offered “urban” and “slightly adventurous” trips with the list of existing tourist packages. However, most of them include rural rather than urban sites, and focus on highly adventurous experiences or have a cultural and educational focus. In addition, special interest and adventure travel packages are offered almost entirely by small local tour operators and not by large tour operators. The conclusions of the competition study can be used innovatively to improve our own product.

Competitive advantage – the product is compared with existing competing products, extracting the best from them and improving, as well as avoiding mistakes made by the competition.

Pilot projects for product differentiation.

With the development of pilot projects and the study of successful models, many new opportunities for tourism development can emerge. A successful way to match the available resources with the main trends in leisure time is to start with existing tour operators who sell travel packages with special interests and existing tourist sites. What type of accommodation do customers prefer? Once it is established which travel packages are already successful, a series of “models” in line with new trends can be developed and offered.

Trademark of the product.

Each product must build its own identity. The trademark ensures easy identification of the product by consumers. Trade name and brand are the two elements of this process. The trade name is the name by which consumers refer to the product. In many cases, the trade name becomes a generic term that refers to a type of product on the market, such as Xerox copiers. Creating a brand name that attracts the attention of consumers and maintains it is the basis for building brand loyalty. In the tourism industry, brand loyalty is extremely valuable. The trademark is similar to the trade name, but has no verbal expression. It is a picture or symbol through which the product is recognized. Many airlines and hotels have achieved significant success with their brands. The trade name and brand of the product are maintained under certain conditions. They should help to identify the product more easily. Consumers should be supportive of the product. The product should be accepted as corresponding to its price. The brand and name must be attractive to the different markets. They should always reflect what the product represents.

A useful approach in building a brand is to establish the competitive advantage of the organization, i.e. what it does better than others. These are usually the distinctive competencies of the organization. By identifying the skills that the organization already has, it will become clear how best to allocate resources.

 

Presence in tourist catalogs.

Why should an organization whose catalog mainly includes routes in the Himalayas also offer trips to Romania in the same catalog? Because users with special interests are loyal to the activities, not the destinations! Approximately half of the consumers who use travel packages every year are regular customers or referral customers. If the tour operator does not diversify its product range with similar travel packages, but in different destinations, he risks losing his customers and they turn to another tour operator. The inclusion of the destination in the catalog of a tour operator is a wonderful opportunity. Even if the tourist does not buy a package from this catalog, the seed is sown – he already knows that he can find what interests him in this destination, and in an attractive package.

Attracting individual tourists.

Individual tourists who are motivated by special interests and activities would rather travel by their own transport than by charter flight. This raises several interesting questions that only tourists can answer:

• Are the tourist sites clearly defined and easily accessible?
• Do they find driving difficult and / or even dangerous?
• Is the individual tourist aware in advance of what can satisfy his interests?
• How does the individual tourist with special interests, looking for a variety of experiences, relate to other tourists who may meet at a particular destination – with contempt or tolerance?
• Which media reach the individual tourist and influence his decision not to use a travel agent (travel agency or tour operator) when making a reservation?

Identify potential routes, trails, events and special interests.

Local hoteliers and accommodation establishments, which are trying to increase their income through direct sales, are helping to develop tourism. The development of new products for sale through specialized tour operators can also make such a contribution.

Unfortunately, very few tour operators offering specialized and adventure packages have enough financial resources and time to explore geographical areas unknown to them, unless the representatives of the tourism industry contact the tour operators with already explored routes, trails, facilities, events and interests, ready to be packaged and offered on the market. However, sending hotel brochures to relevant travel agency agencies is usually a waste of time and money. Unlike tour operators on beach and sun holidays, the accommodation itself is the least important for specialized travel packages.

For example, in order to arouse the interest of an agency offering cycling tour packages, it would be important to include the following materials:

• road map of the area, with marked daily cycling routes (from 10 to 50 km)
• description of the natural landmarks along the routes
• weather conditions
• slopes and road surface
• places to rest
• cycling routes “from hotel to hotel”
• local cycling clubs that would meet the arriving cyclists
• conditions for bicycle repair
• local events, holidays, festivals and entertainment that can be included in the tourist package
• Possibility to use local vehicles for transfer on arrival and luggage transfer.

If a destination wants to develop this type of tourism product, but there is no local transport organization to make the transfer, instead of as an obstacle, this can be considered as a new opportunity for local entrepreneurs.

 

Determining the necessary ancillary services, facilities and infrastructure.

The fastest way to get information about the necessary services and facilities for the implementation of a particular tourist package is to survey tour operators who currently offer such packages. Ask them what local services they need to be able to offer them to their tourists. Once you have answered these questions from tour operators, the next step is to tailor this list to the relevant geographical areas to be developed. One of the quickest ways to identify services that are already available and those that have yet to be localized or created is to contact locals who share the same interest. For example, the quickest way to determine the most scenic cycling routes and the most convenient holiday stops is to consult local cycling clubs and cycling enthusiasts. At best, you will be able to create a short list of places that already have all or most of the necessary components for newcomers. In fact, you will make an inventory of opportunities for specialized activities and trips for adventure in the area. In the inventory you will mark each element that is necessary for the successful conduct of a particular type of tour and will indicate the name of the organization or person who can provide this service.

 

An innovative approach for inclusion in a tourist catalog would be the creation of thematic routes.

For example, once you have made an inventory of the opportunities for “eco-tourism and adventure”, the preparation of sample routes is relatively easy. Collecting data from local enthusiasts is the fastest way to draw attractive sample routes. If local lovers of wild flowers and butterflies have already found the best trails, the best places to rest, the most convenient distance to walk in a day, the types of flowers that can be observed in different seasons, the necessary transport means to get to the starting points of the route, etc., then the “assembly” of sample modules (2 nights, 5 nights, one-week vacation) is quite easy.

Sample routes should be in the form of modules, not a single route that includes everything. Some tour operators would like to organize a tour that goes through several areas, while others would prefer only one geographical area. The sample route includes accommodation (hotel, private house, bed and breakfast, historic inn, etc.), transfer from the airport (if necessary) and daily program of the route.

If a ready-made module with a specified price is provided to the tour operator, the inclusion of the module in the tour operator’s catalog becomes much easier, either as a supplement or as an integral part of the tourist package. This idea can be implemented by a local hotelier, local travel agency or destination management organization. Regardless of who realizes the idea, the tour operator wants to work with only one representative on site.

Hoteliers and companies offering tourist attractions and services have a limited idea of the products they sell. As private sector entrepreneurs, they focus on their own services. And until entrepreneurs are convinced that the new tourism products meet the commercial interests of distributors, it remains doubtful that they will be interested in developing new, improved or modified tourism products.

In the past, direct marketing costs were too high. The hotel industry even assumed that the existing distribution channels for sales (tour operators, travel agents, travel agencies, etc.) control the decision-making process of tourists.

Sources and additional resources on the topic:

• Gartner, William C., Tourism Development: Principles, Processes and Policies. Van Nostrand Reinhold, USA1996.
• Dimitrov, P., Innovations in Tourism, UP “Neofit Rilski”, Blagoevgrad, 2006.
• Dimitrov, P., Conjuncture in the tourism industry, SWU „Neofit Rilski”, 2003.
• “The smart guide to service innovation”, prepared by department “Clusters and Support for SMEs” of Directorate-General for Enterprise and Industry of the European Commission after consultations with department “Smart and sustainable growth” of Directorate-General for Regional and Urban Policy, European Commission
• Directorate-General for Enterprise and Industry, Unit D.5: Clusters and Support for SMEs, e-mail: ENTR-CLUSTERS-AND-SUPPORT-FOR-SMES@ec.europa.eu,

URL: http://ec.europa.eu/enterprise/policies/innovation/support/

• Nolan, Timothy M., Goodstein, Leonard, Pfeiffer, William, Applied Strategic Planning: A Consultant’s Handbook, Pfeiffer & Co., San Diego, California, 1992.
• Principles, processes and policies. Van Nostrand Reinhold, USA, 1996.
• Guide for small private business, Development of competitive tourism products; Project “ Biodiversity conservation and economic growth ” of ARD sponsored by USAID and the government of Bulgaria; Donald E. Hawkins and Kristin Lamoureux, Department of Tourism and Hospitality Management, School of Business and Public Management, George Washington University, Washington, USA, Bulgaria, June, 2001;
• Fay, Betsy, Essentials of Tour Management, Prentice Hall, New Jersey: 1992.

Sustainability and innovation of management

This section concerns the management of the tourism product. Cooperation is needed between the private and public sectors, as well as between business interests that will compete for market share. In cooperation with several destinations, a catalog of specialized interests can be compiled, with sample “adventure” routes for distribution by tour operators around the world. For example, areas with national parks that develop and offer an eco-tourism product and are the first to enter the market will have a certain competitive advantage. The constant goal in the development of tourism should be to create and maintain competitive advantages both for the solvent market niches and for the mass tourist and for the seekers of unique adventures. Moreover, niche markets around the world are usually more affluent, educated and tourist-oriented. Therefore, to neglect these markets in the long run would be catastrophic.

Agenda 21 and sustainable tourism products.

Although Agenda 21 was adopted on 14 June 1992 in Rio de Janeiro, the present moment calls for a change in the management of the tourism business, with a focus on sustainability, environmental protection and the enforcement of the principles of the circular economy. In this sense, the management of the tourism business must take on a new, innovative meaning.

According to the Rio meeting, sustainability presupposes a new type of long-term relationship with full coherence of social, economic and environmental factors. Here are some of the more interesting issues included in Agenda 21 that relate to the tourism industry:

• Need to include all costs, including environmental costs, in the price of goods and services sold.
• Need to change consumer habits through public education and consumer choice programs.
• Need to develop waste treatment strategies and programs and improve resource use.
• Need for land use planning, as well as providing infrastructure, sustainable energy sources and transport systems.
• Need for guarantees for sustainable development of the environment, the social and economic factors.

In most cases, one of the most important factors in the tourism industry that provide an advantage is the quality of natural and cultural resources in a particular tourist destination. Sustainable development has to do with maintaining and even improving the quality of resources.

The development of products for commercial purposes is based on existing attractions, facilities and services:

• grouped and presented in such a way as to look new and attractive for a certain market segment
• supplemented with new attractions, facilities, activities, events and services aimed at certain or new market segments, the existing product adapts to the new demand
• designed to improve the image of the destination
• able to attract new market segments.

The offer of many different attractions aims to increase the demand for services (accommodation, food, retail, transport). These services are economic drivers of tourism, but require a certain amount of visitors to succeed. When there are only a few attractions aimed at small tourist markets, the tourism industry suffers great economic fluctuations. The development of commercial products is based on market research, marketing techniques and communication campaigns.

Here we will consider only the basic concept of sales in the tourism industry. The concept is simple: until a destination is included in a travel package or program, it cannot be sold.

Another aspect in the innovative management of tourism is the management in terms of turnover – Revenue Management. This is an innovative approach to management, which has become increasingly popular recently and is emerging as one of the most important innovations in management.

Determining revenue management.

To understand revenue management, we have to define it first. Within the hospitality industry, the common definition is: “To sell the right room to the right customer, at the right time, at the right price, through the right distribution channel, with the best cost-effectiveness.”

Revenue management involves the use of performance data and analysis that serve hotel owners to more accurately predict demand and other consumer behaviors. This in turn allows them to make smarter pricing and distribution decisions to maximize revenue and therefore profits.

As a concept, revenue management actually starts in airlines, where airlines find ways to anticipate consumer demand in order to introduce dynamic pricing. However, it is applicable in any industry where different customers are willing to pay different prices for the same product, where there is only a certain amount of that product to be sold, and when that product needs to be sold before a certain point in time.

In order to effectively manage revenue, businesses must also have some way of forecasting demand and consumer spending habits so that informed adjustments can be made. For example, hotels may use historical data, existing bookings, weather forecasts, and other industry data to inform of their revenue management strategy.

Why is revenue management important?

For hotel owners, hotel revenue management provides the opportunity to take full advantage of the unsustainable inventory of hotel rooms (the potential for revenue from each room “burns” every day when the room remains unoccupied), allowing them to maximize the amount generated by sales. In essence, it allows decision-makers to make informed choices based on data, rather than relying on instinct or conjecture.

Hotels, like many other travel organizations, have fixed costs that must be paid, no matter how many rooms are sold and no matter how much money is generated by guests. Therefore, through a revenue management strategy, hotel owners can ensure that their costs are covered and their prices and services are dynamically optimized.

 

Content of a sample Business Plan in the field of tourism business

Resume

The summary should be short. This summary is the entrance to the rest of the business plan. The summary should be good, because otherwise readers will not continue. Your plan should be in line with the main goal of the organization. This is a business, not a writing lesson. If you are selling an idea, emphasize the main thing, make it exciting. Cite growth rates, opportunities and competitive advantages. If you are just researching the idea for yourself, state it in the summary. As a general rule, the first paragraph should include the name of your business, what it sells, where it is located, and the type and purpose of the plan. You can also point out the keys to success or at least summarize them briefly. Another paragraph should highlight the important elements. Projected sales and profits, as well as unit prices and profitability, are usually included. Everything new and innovative is included that you wouldn’t want anyone to miss. This can give an important strategic direction to the plan, the new product or service, etc. For some companies, this may be attracting new partners, investing or expanding, or even reducing costs and preparing for a difficult period.

Mission

Describe the most basic and fundamental goals of your business. List the benefits you will offer to your customers, employees and you as a business owner. A good mission description is a key element in defining your business and clarifying its true goals to customers, partners, employees and owners. For example, if customer satisfaction and good customer service are important to you, say so in the mission description. If growth and profits are important, say so. Do not confuse the mission with the goals. Both are related to purpose. The mission is related to fundamental values, and the goals are related to measurable concrete numbers. The mission description is also a good opportunity to clearly define in which field you work. This can be crucial to understanding your keys to success.

Business objectives

Set specific, measurable business goals, such as sales, profits, growth rate, etc. Avoid listing more than three of your most important goals, because a short list emphasizes focus and concentration. This is not a description of your mission. Further implementation depends on your ability to track progress toward goals and measure results. And execution is crucial. List the main tasks that need to be performed and appoint a person responsible for their implementation.

Market analysis

The market analysis is focused on potential, not actual customers. For example, if you have a small hotel with 8 beds and a year-round occupancy rate of 35%, aim to increase the occupancy rate (e.g. to 70%) and then focus on the total number of potential customers you can serve. Once you have adopted the idea of ​​potential customers, it remains to gather information and make calculations. Remember that this is a preliminary assessment, not a final business plan. For this first step, you need a real market analysis to help you decide if you want to make a comprehensive plan. Will it lead you to better business solutions and better focus on priority segments? Do your research for business purposes so that it can guide your decisions, not just research motives.

Analysis of income and expenditure balance

The analysis of the income and expenses balance is used to determine at what point the income of the organization will be equal to the expenses and from there, when it will start to accumulate profit. The analysis of income and expenditure balance must reflect the real financial condition of the organization. In order to determine the point of equality, a distinction must first be made between fixed costs (those that do not change according to the specific situation, i.e. rent, interest, administrative costs) and variable costs (they change directly according to the number of of tourists).

The basic formula of the income statement analysis is the total amount of fixed costs divided by the selling price minus the variable costs. For example, take a trip of 3 nights and 3 days:

• Fixed costs: 3000
• Variable costs: 250 per person
• Selling price: 400 per person
• Equality of income and expenditure = 3000/(400-250) = 20 tourists

You will need 20 people to have no profit or loss at this selling price. It is important to balance income and expenses before entering the market so that you can set a suitable price that will bring you a profit.

Feasibility analysis.

One of the functions of management in the tourism business is to determine whether a product is in demand and whether it will be profitable. This can be done through a feasibility analysis. Basically, the purpose of the study is to determine whether the product will be successful or not. Morrison defines feasibility analysis as “a study of the potential demand and economic feasibility of a business or organization.”

Tourism business owners can assess the tourist demand during the year, as well as for a specific period of time.

It is extremely important for the management staff to be able to prepare and comply with the budget. There are two types of budget: current budget used to manage service revenue; and the cash budget used to calculate the actual cash flow.

The production costs, the prices of the provided services, and the necessary revenues to cover the costs and generate profit are determined. Monthly goals are also set, through which the organization follows the planned direction. The current budget evaluates performance on a monthly basis to determine when it is necessary to hire additional workers, when it is necessary to reduce sales, and how to identify strengths and weaknesses.

Cash budgets determine when and where cash flows come from, when expenditure payments are made, and when revenues are expected. This is necessary to determine whether the organization currently needs additional funding or has cash surpluses. For example:

 

Sample budget

Visit Х: Sample budget for 20 tourists

Variable costs per person- 250

Fixed costs – (3000/20) –  150

Total before margin – 400

Margin (as planned) (as much as the market can bear)- 25%

Selling price per person– 550

Fixed costs are what you expect to spend in a standard month on rent, salaries, overheads, and other common running costs that you expect to have, regardless of sales. Variable costs are the unit costs that you will not incur if the specific unit does not appear, such as raw materials for producers, the value of products, or the cost of providing a service.

Sources and additional resources on the topic:

• Agenda
• 21:http://education.rec.org/bg/our_earth_in_the_future/sustainable_development/22-04-02.shtml
• Gartner, William C., Tourism development: Principles, processes and policies. Van Nostrand Reinhold, USA, 1996
• Dimitrov, P., Innovations in Tourism, UP “Neofit Rilski”, Blagoevgrad, 2006.
• Dimitrov, P., Conjuncture in the tourism industry, SWU „Neofit Rilski”, 2003.
• “The smart guide to service innovation”, prepared by department “Clusters and Support for SMEs” of Directorate-General for Enterprise and Industry of the European Commission after consultations with department “Smart and sustainable growth” of Directorate-General for Regional and Urban Policy, European Commission
• Directorate-General for Enterprise and Industry, Unit D.5: Clusters and Support for SMEs, e-mail: ENTR-CLUSTERS-AND-SUPPORT-FOR-SMES@ec.europa.eu,

URL: http://ec.europa.eu/enterprise/policies/innovation/support/

• Nolan, Timothy M., Goodstein, Leonard, Pfeiffer, William, Applied Strategic Planning: A Consultant’s Handbook, Pfeiffer & Co., San Diego, California, 1992.
• Principles, processes and policies. Van Nostrand Reinhold, USA, 1996.
• Guide for small private business, Development of competitive tourism products; Project “ Biodiversity conservation and economic growth ” of ARD sponsored by USAID and the government of Bulgaria; Donald E. Hawkins and Kristin Lamoureux, Department of Tourism and Hospitality Management, School of Business and Public Management, George Washington University, Washington, USA, Bulgaria, June, 2001;
• Fay, Betsy, Essentials of Tour Management, Prentice Hall, New Jersey: 1992.
• What is revenue management? https://www.revfine.com/what-is-revenue-management/

Marketing innovations

The tourism market becomes more complex, and  turns into a global international market with a variety of motivations and diverse consumer behavior. Fifty years ago, only the wealthiest people could afford vacations to international destinations. With the appearance of jets, and the reduction in airfare as a result, the advent of mass tourist packages, as well as the development of affordable tourist bases to accommodate these tourists, the look of international holiday travel has changed forever.

What do tourists buy?

Tourists pay for the services they need to spend their free time in a different and often unfamiliar environment, but they look for amenities and especially experiences and that is what they buy.

From the point of view of the tourist:

• resources / attractions = opportunities for discoveries. THINGS TO SEE
• activities = opportunities for a pleasant stay. THINGS TO DO
• services, facilities and infrastructure = provided access to opportunities.

When these resources, attractions, activities, services, facilities and infrastructure are new or different, they can become an important part of the holiday by adding value to the trip. For example, boating with a transparent bottom, scuba diving lessons, horseback riding, nature walks, folklore performances, etc.

Tourists buy dreams for fun and a pleasant experience. They buy entertainment and adventure, expecting to experience something different from what they experience where they live. They buy ideas and promises, the promise that the destination will meet their expectations and that the desired services will be provided at the appropriate place and time. Failure to meet expectations leads to disappointment. Disappointed customers get angry and complain. They will not come again and will tell others about their bad time.

So remember that free time has:

• Huge emotional commitment, it’s time for fun and personal development; time to make dreams come true.
• High economic value because time is expensive.

Market segmentation.

The market is divided into segments according to the specific characteristics of a destination or business. There are no universal criteria for market segmentation, but various demographic and psychographic criteria are used, as well as criteria for consumer behavior.

Geographical and demographic criteria such as gender, age or place of residence often do not provide sufficient information about the habits and preferences of a given market segment. Therefore, criteria related to consumer behavior when purchasing the product are used to determine the segments, such as:

• Main motivation for taking the trip
• Travel in a tourist group or individually
• Direct reservation or through a travel agent
• The composition of the tourist group: in pairs, family, with friends
• Type of transport and accommodation
• Preferred season
• Costs: consumed services / requested services, choice of activities, “light” or “heavy” category of users
• Notions and perceptions
• Degree of loyalty: regular customers, degree of repeatability

Regardless of which criteria are used, the resulting segments should be:

• Measurable: The market segment is useful if it is possible to measure the size and purchasing power of the consumer group.
• Accessible: The group must be accessible through communications and advertising campaigns.
• Significant: Large enough and with sufficient profit potential to justify the relevant market strategy. Of course, the critical size is different for different travel companies, but it is possible to identify not very large market niches that offer good opportunities for specialization. Some niche markets could be quite profitable.

Tourism enterprises and destinations need to develop compatible products targeting compatible segments. Tourists prefer places visited by tourists like them who behave in a similar way and lead a similar lifestyle.

Market research as a tool for market decision making.

Market research is a marketing tool that:

• Facilitates management decisions
• Reduces risk as decisions are based on better knowledge of the market

The market research proceeds in the following sequence:

1. Determining the most significant data for the respective business.
2. Identification of primary and secondary sources of information.

• Primary data: Special studies. They may require expert opinion and be costly, but may be conducted in conjunction with other stakeholders (public or private).
• Secondary data: Statistical sources, public reports on markets, media, databases, etc.

3. Use of own data as a result of management activities.
4. Building a system for periodic data collection. Relevant data are collected in daily activities, from secondary sources, from special studies. The collection of data that is subject to comparison is of paramount importance for determining trends.
5. Analysis of the results and conclusions.
6. Introducing them to the relevant people in the organization.
7. The results and conclusions should be available for monitoring the work and evaluating its implementation.

Necessary market data for the development of a tourist product:

1. Total volume of visitors / users

• Seasonal distribution
• Market share (% of total market)
• Breakdown by segments

2. Motivation for travel

• Demographic characteristics
• Nationality
• Age
• Sex
• Occupation
• Residence
• Marital status

3. Consumer habits

– Where do they get information from?

– Type and period of the reservation (single services, package, etc.)

– Group size

– Cost level (per person per day, breakdown by cost category)

– Duration of stay

– Type of accomodation

– Type of transport

– Activities during the holidays

– Frequency of trips / Type of destinations

– Degree of satisfaction

4. Concepts

• Overall idea of the destination and the organization
• An idea of the individual services and attributes
• Imaginary to a real idea
• Comparison with the notion of competition

5. Management indicators

• Breakdown of revenues and current expenditures by sectors:
• Hotels, travel agents, etc.
• Average occupancy / daily norm of the bed base
• Average profit and return on investment

Four outstanding marketing innovations that can be used effectively in the tourism business:

1. Video campaigns for tourist experiences

KLM Royal Dutch Airlines is building a hologram bar where people can meet to exchange local advice while waiting for their flights. These hologram bars are placed at the airports in Amsterdam, Oslo and Rio de Janeiro.

https://vimeo.com/313764759

Cheap Flights and Uncle Gray Agency have created an advertising banner that appears on articles about sports, art, music events and other publications. The user just has to drag the image of the article in the banner of Cheap Flights and the banner immediately finds the best tickets. Instead of focusing on destinations, he promotes experiences that people are already interested in.

https://youtu.be/4jSQ1oJgJOw

Van Gogh’s bedroom – you are welcome

To promote Van Gogh’s exhibition at the Chicago Museum of Art in 2016, Leo Burnett built Van Gogh’s bedroom in the real world and included it on Airbnb as a place to sleep. The campaign was a resounding success.

https://youtu.be/oyJQNuAppE8

2. Creative print travel ads

Norwegian Airlines is using the separation of Brangelina (Brad Pitt and Angelina Jolie) to its advantage

Imagе https://colorwhistle.com/travel-marketing-campaigns/

Kielo Travel – Dreaming of a holiday?

Image https://colorwhistle.com/travel-marketing-campaigns/

CVC – The world is outside

Image https://colorwhistle.com/travel-marketing-campaigns/

Cruise ship centres – Dreaming of a cruise?

Image https://colorwhistle.com/travel-marketing-campaigns/

Shchusev State Museum of Architecture – Discover the full story

Image https://colorwhistle.com/travel-marketing-campaigns/

3. Travel ads on social media

Eurostar is running an Instagram campaign that is dizzying. Their goal is to promote train travel from London to Paris. They cut an entire illustration of a trip from London to Paris into 200 individual images, which they post on Instagram. For even greater effect, they convert some posts into videos and others as hidden suggestions.

Image https://colorwhistle.com/travel-marketing-campaigns/

Hawaii’s tourism department decided to give first-time visitors to Hawaii an idea of the local beauty and culture. In addition, they also wish that previous visitors should visit the island again. The tourism department decided to collaborate with active tourists on Instagram and invited users to share their favorite memories of Hawaii using the hashtag #LetHawaiiHappen. The campaign was a huge success because ordinary users share their own experiences.

WOW Airlines has launched a Snaptraveler program, according to which 4 winners will travel to all 28 airline destinations for free. In return, they should publish a Snap story from all the places they visit. The idea of this summer competition in Snapchat is to create an experience similar to reality TV. The content is aimed at targeting their main demographic group and can be shared on the WOW Airlines account in Snapchat.

The Kenya Tourism Council has partnered with Expedia to promote Kenya as an amazing tourist destination. They choose a well-known pair of travel bloggers and send them on a week-long trip to Kenya without a fixed route. People who follow this couple on Instagram can determine the route by voting through an Instagram Stories poll. Throughout the week, the couple posted their trip to their followers on Instagram. The content is also redirected to a micro website. This campaign was a huge success.

The state of Georgia wants to position itself as the most favorable destination for pets in America. They create a social media strategy aimed at pet owners and share a huge amount of social media posts with the hashtag #ExploreGeorgiaPup to show that Georgia is the perfect place to visit with your pet. This campaign has generated a lot of traffic to their website and has also helped them reach 10,000+ followers on their Pinterest pet board.

4. Tourist e-mail marketing

Air Canada

During check-in by email, Air Canada asks new subscribers to note their nearest airport and destinations they are interested in for future travel. Using this information, they send personalized emails according to the subscriber’s interest.

Virgin Virgin

Virgin Atlantic has proven that it can promote activities focused on travel, not just destination. The company has created a memorable customer experience by sending them e-mail offers for skydiving via virtual reality.

Flight Center

Time-limited offers always create a sense of urgency and encourage people to take action. Flight Center uses this idea to offer cheap travel deals to New York. To prove that the offer is for a limited time, they add a countdown clock at the end of the email.

Sources and additional resources on the topic:

• Gartner, William C., Tourism Development: Principles, Processes and Policies. Van Nostrand Reinhold, USA1996.
• Dimitrov, P., Innovations in Tourism, UP “Neofit Rilski”, Blagoevgrad, 2006.
• Dimitrov, P., Conjuncture in the tourism industry, SWU „Neofit Rilski”, 2003.
• “The smart guide to service innovation”, prepared by department “Clusters and Support for SMEs” of Directorate-General for Enterprise and Industry of the European Commission after consultations with department “Smart and sustainable growth” of Directorate-General for Regional and Urban Policy, European Commission
• Directorate-General for Enterprise and Industry, Unit D.5: Clusters and Support for SMEs, e-mail: ENTR-CLUSTERS-AND-SUPPORT-FOR-SMES@ec.europa.eu,

URL: http://ec.europa.eu/enterprise/policies/innovation/support/

• Nolan, Timothy M., Goodstein, Leonard, Pfeiffer, J. William, Applied Strategic Planning: A Consultant’s Handbook, Pfeiffer & Co., San Diego, California, 1992.
• Principles, processes and policies. Van Nostrand Reinhold, USA, 1996.
• Guide for small private business, Development of competitive tourism products; Project “ Biodiversity conservation and economic growth ” of ARD sponsored by USAID and the government of Bulgaria; Donald E. Hawkins and Kristin Lamoureux, Department of Tourism and Hospitality Management, School of Business and Public Management, George Washington University, Washington, USA, Bulgaria, June, 2001;
• Fay, Betsy, Essentials of Tour Management, Prentice Hall, New Jersey: 1992.
• Creative ads for the tourist business:

https://colorwhistle.com/travel-marketing-campaigns/

It has already become clear that the tourism sector is developing at a lightning pace.

Every day billions of tourists book accommodation. However, the competition is fierce – with thousands of destinations and new offers on the market.

In order to win over modern tourists as customers and meet their expectations, every tourism organization must keep up with trends. Modern guests are accustomed to using technology. Everywhere and at anytime. Therefore, most travelers say that they expect to see innovative technologies in the accommodation and tourist sites they visit.

A study by consulting firm Deloitte found that consumers expect smart technology solutions. This also applies to the tourism sector, which needs to adapt to rapidly changing attitudes and expectations.

Let’s look at some of the latest trends in technology solutions for the tourism business:

OTA or Online Travel Agency

OTAs are online companies whose websites allow users to book various travel-related services directly over the Internet.

They are third party agents reselling travel, hotels, car rentals, flights, holiday packages and more.

Shopping for travel through online agencies is very popular nowadays, especially in the last minute travel segment, and also due to the frequent use of smartphones. Today, consumers are constantly on the move and the advantage of the reservation mechanism provided by OTA is that it offers immediate payment and booking confirmation.

Examples of most famous OTA are:

• The Priceline group (Booking.com, Priceline.com, agoda.com, KAYAK, rentalcars.com, OpenTable)
• Expedia, Inc. (Expedia.com, Hotels.com, Egencia, Hotwire, Trivago, Venere.com, CarRentals.com, Classic Vacations, Expedia CruiseShipCenters, Expedia Local Expert (LX), Wotif Group, Travelocity)
• TripAdvisor Inc (tripadvisor.com)
• Opodo (opodo.com)

Internet of Things (IoT)

What is the Internet of Things, IoT? Generally speaking, the term is aimed at smart devices that collect information and can connect to each other using an Internet (or wireless network) connection. What is the application of technology in the tourism industry? The benefits are promising – from automated hotel rooms, to devices signaling staff that cleaning is needed.

Mobile phone instead of a key

Unlocking doors with a smartphone is becoming very popular. Many tourists would appreciate such an opportunity. Smart smartphone apps make this possible.

Virtual reality

Virtual reality, VR has become increasingly popular in recent years and the tourism sector is no exception.

More and more travel websites are using 360-degree images to give their users the opportunity to virtually walk in or around the tourist site or surrounding attractions. But that’s not all. Tourist sites can use virtual reality not only to inform, but also to entertain their current and potential guests.

Augmented reality

Augmented reality, AR combines real-world video images with computer-generated images. The possibilities of such technologies are endless. Imagine interactive guides that take the user to different places. Augmented reality can be effectively used to market certain destinations.

Direct reservations

One of the main advantages of direct reservations is the lack of commissions. Reservations do not go through third countries, which reduces costs. Many online providers offer integrating booking systems to make reservations directly on the travel website, not outside it.

Management Software (PMS)

Such software systems offer functionalities such as easy organization, management and control of daily activities and transactions that take place in the tourism business.

Such a system simplifies the administration, saves time for both tourism management and guests.

Sometimes innovative technological systems combine Direct Reservations and Management Software to increase the added value of accommodation. One such system is BBify.com – a system for managing and booking accommodation. The uniqueness of this system is that it is suitable for small and medium-sized accommodation facilities and makes them competitive with huge chains with a large technological budget. BBify.com allows the embedding of a form for direct reservations on an existing website of the organization or the creation of a new website directly in the platform. It also provides a comprehensive package of management tools not only for reservations but also for the day-to-day tasks of the accommodation.

Wireless charging

There is a concept known as “Low battery anxiety”. The mobile brand LG is conducting a study that finds that people act in strange ways when their smartphone battery drops.

People are addicted to their phones and the travel business can take advantage of new technologies for wireless battery charging.

Cybersecurity

Nowadays, there is more and more talk about cybersecurity. The term means the process of protecting and recovering networks, devices and programs from digital attacks.

In the tourism industry, the lack of a fight against digital attacks can lead to many problems, as hoteliers work with sensitive personal information. It is important to use security systems such as cloud cyber security services.

Artificial intellect

Today’s customers want real-time answers to their questions. Therefore, customer service must be characterized by high quality and be accessible through multiple communication channels. However, it is difficult and expensive to be available 24/7. What is the solution? Chatbots based on artificial intelligence.

Robots

In recent years, robots are not only found in science fiction movies, but in every day life. This has become possible thanks to advanced technologies such as machine learning. Robots are actively entering the tourism business. Why? Because guests expect high quality and fast service.

The Japanese Henn-na Hotel in Nagasaki, for example, is replacing its staff with a robot that provides guest accommodation, answers basic questions and registers the check-out of rooms.

The Hilton hotel chain uses a robot supported by artificial intelligence that can adequately answer questions like a conferencier:

• “Where is the nearest French restaurant?”
• “Where is the airport?”
• “When is dinner served?”

Airlines use robots to check luggage and even check documents.

Holograms

The technology represents a kind of augmented reality (AR), which allows the creation of a realistic three-dimensional image.

Devices with voice control function

Such devices (also known as voice assistants) allow the understanding and execution of simple voice commands.

In the tourism business, devices with voice control can improve the customer experience and speed up booking processes.

Personal voice assistants are already quite well developed, some examples of which are Siri, Alexa, Cortana, Bixby and Google Assistant.

Facial recognition

Generally speaking, facial recognition is a biometric technology that is used to identify people by analyzing their facial features. The technology finds applications in the tourism business.

• In the field of security – guests can enter their rooms by recognizing their faces.
• Payments – technology can help authenticate payments. MasterCard already uses facial recognition for this.
• Customer service – employees can recognize guests even before their arrival at the tourist site.

Often artificial intelligence, robots (or holograms), voice recognition and control, as well as facial recognition are part of the same technological product in the tourism business – most often at the reception, but there are many other places for their application in the tourism business.

Fast Wi-fi

This is not a technology that should be ignored. Guests are used to receiving a super fast internet connection and it is recommended that it should be free.

Blockchain technology

A blockchain is a method of storing information in a “chain” of interconnected computer records, called blocks.

What are the applications of technology in the tourism business?

From secure payments to luggage tracking.

Market intelligence technology

Real-time pricing information will allow you to monitor and analyze your competitors and make smart choices about your own pricing to optimize your revenue management. Managing booking revenue can be a complex process, especially in a market that is becoming more complicated by the minute due to the continued growth of both travel companies and booking channels. Real-time access to revenue management metrics is an invaluable addition to your pricing strategy. With the right tool, you will be able to track your competitors and receive notifications so that you never miss a change in the market. You can also retrieve reports and forecast demand to make the best possible decisions about your pricing strategy. The tool should show you current rates and improve your ability to achieve your revenue goals.

Marketing automation

Marketing automation platforms automate the process from finding potential customers to making sales. For the tourism business, this means personal communication with potential guests, their engagement and subsequent booking. When integrated with your CRM (customer relationship management system), sales and marketing work even better together. Marketing automation software provides the possibility to build campaigns and landing pages, as well as social media posts in one place, and this should be one of the leading innovations in your marketing strategy for e-development.

Some of the key benefits of using a marketing automation platform include:

• The ability to create and experiment with different emails and landing pages for improved potential generation.
• The ability to train your potential customers (guests) by conducting automated campaigns to introduce potential customers to the tourist destination in order to improve the opportunities to turn them into regular and satisfied customers.
• Detailed reports showing email performance, performance rates, and return on investment (ROI) broken down by campaign.
• Tracking and reporting indicators on your marketing automation platform are an invaluable resource that helps you refine the effectiveness of your emails and feed campaigns, increase conversion rates and bookings, and improve your overall business processes.

In addition, you should pay close attention to:

• Social media platforms
• E-mail tools
• Applications aimed at promotional offers
• Systems for improving communication with customers

All this should be done before you even consider buying a door lock that opens with a mobile phone or installing a smart TV in the hotel rooms. Research the basic marketing automations well and use them according to your budget. Some of them only require time, invest it, especially if you have it in excess.

As with all business activities, guest feedback is vital – listen to what your guests have to say. If you have never received complaints about your bathroom, you may not need to spend money to install underfloor heating. Instead, update the entertainment system, which, as several guests have mentioned, looks a bit outdated. Investing in innovation should also always be tailored to what is needed, and not to what you think will only enhance your image.

 Sources and additional resources on the topic:

• https://roombre.com/bg/blog/hotel-marketing/15-inovativni-tehnologii-v-hotelierstvoto.html
• https://www.xotels.com/en/glossary/ota/
• https://www.siteminder.com/r/hotel-technology-systems-products
• https://www.siteminder.com/r/trends-advice/hotel-management/hotel-management-definitions-operations-ideas-software