16 Jul, 2001
Report Highlights Challenge of Change Facing NTOs
The recent changes in the structure and focus of the Tourism Authority of Thailand are in line with similar changes being made world-wide. According to a report by an Australian-based consultancy company, national tourism organisations (NTOs) face more changes as direct-distribution, competitive pressures, budgetary-shortages and changing consumer lifestyles create an ‘entirely new marketing environment.”
Published in its July newsletter, the analysis by Global Tourism and Leisure says that the former NTO strategies and structures related to simply ‘promoting the destination’ and what ‘it has to offer’ are making way for new marketing realities.
“Rather than the marketer segmenting the customers, customers are increasingly segmenting themselves. While market segmentation still has an important role, it is increasingly only the starting point of the new marketing paradigm,” the report said.
It added, “Increasingly the customer controls the marketing and information distribution process. It is now the customer who can decide how and when they access their travel and tourism information and how and through what process they access and purchase their travel and touring arrangements.
“The hitherto structured distribution chain is now in tatters. With the various components of the distribution and supply process scrambling to gain direct access to and ‘ownership’ of the customer, the ‘traditional’ distribution process is destined to be assigned to the list of historic examples of ‘the way we used to do business’.”
The report notes that the conversion process is now being further collapsed by the Internet, the further development of and access to interactive television and other information technology advancements yet to appear. In some cases the entire process, from initial awareness to purchase, is able now to be consummated in one contact.
“Just as the barriers which previously separated and defined the roles of the different players in the distribution chain have become transparent or non existent, the cut-off point between where the marketing and promotion of the destination ends and the conversion process begins is becoming increasingly indefinable.
“Travel is increasingly more about experiences, fulfilment and rejuvenation than about ‘places and things’. And yet when we glance through the majority of brochures and web pages of wholesalers and tour operators we find that nearly all feature the ‘hardware’ of airline seats, hotel or resort beds and places to be visited, with little or anything about the experience or the benefit.”
The report said that the competition the travel industry faces is not just a question of one destination competing against another, or one type of holiday against another, but it is increasingly coming from the ‘lifestyle’ market.
“Lifestyle marketing tends to focus on and confirm more of what the customer would like to see in and of themselves rather than on any physical properties of the product or service being promoted. Tourism and travel, which are essentially more about lifestyle and personal enhancement than many of the other supposed lifestyle products, need to reassert themselves more strongly in this market.”
The report stresses that in this new marketplace, nothing short of a reinvention of NTOs “will ensure they are able to keep abreast of and capitalise upon the revolution taking place.”
“Such a major reinvention will require a dramatic change in strategies, the structures and skills that underpin them, the scope of their operations and even their direction and the rules by which they have previously played. The most dramatic shift will require a 180-degree shift in thinking and direction from one where the emphasis has been on promoting the destination, to one of creating holiday experiences and connecting them with the customer.”
Other changes will need to include:-
— An even greater emphasis on the development of a strong brand image for the destination with clearly identified and projected brand values which resonate with key targeted segments.
— A more direct engagement with the customer to identify their holiday motivations, facilitate their needs and fulfil their aspirations.
— The establishment of ongoing direct consumer communication and key customer relationship strategies.
— More emphasis on the creation and promotion of holiday experiences which link key brand values and assets (such as natural and landscape features, climate, culture, food and wine, amenities and communities) and the holiday aspirations and needs of key customers.
— An extension of the traditional marketing role to include greater intervention, facilitation and direction in the conversion process.
The structure and skill base of NTOs will need to change from one which has supported traditional functions of destination advertising, publicity and promotion, information servicing, distribution channel development and servicing, the report says.
“The new direction will require changed structures and additional skills related to brand and sub-brand development, customer relationship and management strategies and in working with suppliers and consolidators to turn tourism product into relevant tourism experiences.”
NTOs will probably have a more direct role in developing and managing comprehensive inventories of product and experiences. They will certainly have a greater role in customer servicing and contact, and rather than leaving the conversion process to take care of itself, they will possibly enter into strategic relationships with industry partners which can provide a seamless process between the connection with and final conversion of the customer.
Such a change will not be inexpensive, but the prospect of converting a significantly higher percentage of interested and prospective customers will provide a stronger and more identifiable return on investment and less wasted effort and resources. Similarly such a transformation will not be smooth as the roles and responsibilities of NTOs are seen differently by their many stakeholders,” the report said.
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