Digitalization in Tourism –Not a RISK - a REALITY

JEFF ARCHAMBAULT

JEFF ARCHAMBAULT CONSULTING

MILLENIAL 3.0

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Digitalization: risk or opportunityfor global tourism?

Digitalization has and will continue to transform travel and tourism

Don’t pretend you can “ride out” this wave!

Focus on your USP, invest in appropriate technology and training, and adapt your services

There are real opportunitiesfor global tourism –including for TAsand TOs -but withdisruptions!

1. Global tourism revenues will continue to grow

2. Digitalization & technology will continue to generate a large part of this growth

3. The « customer experience »: via Human Interaction will be KSF!!

Global international tourism revenue has tripled over the past 15 years

From $475 billion in 2000 to $1.2 trillion in 2016

(source UNWTO)

Growing travel demand offers great opportunities !

Travel offer is more extensive, more varied, and more

accessible

Appetite for travel is increasing

• The growing influence of millennials, who are more likely to travel

• The expected doubling of the middle class in high-growth global regions, and the corresponding rise in their disposable income

Travel itself has become more

affordable

• Airline travel costs have dropped dramatically over time (ex. down 50% in the US over past 30 years)

(WEF)

• Since the 1980s, the amount of air traffic has doubled every 15 years … and is expected to continue to do so!

Global tourism revenues are forecasted to grow in all regions (UNWTO)

Global tourism growth projected to reach $1.8 trillion by the year 2030

Europe will continue to lead with Asia Pacific taking an ever larger share

Impact of OTAs on

travelbookings

(WEF)

The share of travel bookings made through OTAs is expected to grow from 40% in 2016 to 60% in 2025.

OTAs, search engines, booking platforms have clearlyfilled a « gap » for consumers

Travel information immediately available and more diversified

Greater transparency in pricing with ability to compare prices and provide multiple options

Increased competition, lower prices - travel accessible to larger numbers

The « digital consumer » is in control!

Dynamic tourism industry growth – greatopportunities for those who invest

Currently perceived risk of « winner takes all » can be avoided if « traditional » actors invest in:◦ New technologies and ongoing technological innovations◦ The human dimension: value-added advice and service, and new skills

training for employees

E-tourism will be constantly changing at an accelerating pace, technologycycles are shorter and clearly pose constraints - financial & human

Industry actors will need to be aware and agile!

2. Digitalizationwill createsignificant net value for travel& tourismindustry over next 10 years (WEF)

(WEF 2017)

Create $305 billion through increased

profitability

Migrate $100 billion of value from

traditional players to new competitors

Generate societal benefits valued at

$700 billion

Net displacement of current jobs

Digitalization and new technology will provideopportunities to generate future growth

Virtual Reality Artificial intelligence

* 50 billion -Approximate number of connected devices by 2020 – equivalent

to 6.6 per person.

Intelligent automation

Virtual Reality in tourism

The technology exists - Transition from « niche applications » to broadersocial use

It will further empower the consumer to make an informed decisionbased on his/her own « experience »

Questions remain:◦ Cost of equipment: who invests? (agents or individuals?)

◦ Cost and availability of content: when and who will be the first to make«3D » broadly available in the awareness / consideration phase of the tourism decision

Club Med has introduced VR glasses with resortcontent in its agencies (less than 50% of theirdestinations today)

Club Med has introduced VR glasses with CM resort content in its agencies (less than 50% of their destinations today)

Do you speak « Chatbot »?Chatbots can help bring the client service to a higher level:

• Availability 24/24h – 7/7 day

• Immediate answers

• User-friendly conversations based on databases of thousands of questions

• New opportunities to increase business through interactions

Main interest: the ability to perform repetitive tasks, which leaves time for individuals to focus on the most customized information, thus improving customer service.

« ConversationalMarketing » –investing in a personalizedconsumer relationshipdigital tools

Rebuild « traditional » consumer relations: more personal, more adapted, more cost efficient, more profitable

One-way, outgoing communication channels (ex. Emails) are no longer sufficient.

Henceforth, two-way communication involving personalized one-to-one conversations via multi-canal data collection and intelligent analysis

Digitalization & technology will continue to evolve and generate a large part of the industry growth!

However,

Today’s challenge for travelling consumers is knowing:

◦ How to focus their attention & search

◦ How to access reliable information on the existence, quality and honesty of goods and services (very true in global travel!)

◦ How to have confidence that their choice aligns with their truepreferences and expectations

3. The « customer experience »: advice and service via direct / virtual Human Interaction

Bringing value to the « Customer Personalized direct virtual human interaction at key moments in the “Customer experience” decision process:

◦ During awareness stage: ex. virtual reality travel experiences

◦ From consideration to purchase: credible personal advice

◦ Retention phase: follow-up with clients

Quality service and « savoir-faire » willremain essential to the hospitality industry

No matter how avanced the technology, nothing will replace greatquality, personalized service for customers – « GUESTS »◦ travel advice

◦ hospitality delivery

◦ follow-up treatment

The Disney brand promise!

Disney has always used innovative technology to deliverexceptional Storytelling … and world class Guest Service

The Disney “Magic”: attention to detail throughout the Service Experience!

1. The Magic of Setting : Guests are immersed in the Disney service experience through attention to detail in every encounter: phone calls, emails, live chat, Web sites and on-site experiences.

2. The Magic of Cast : All “Cast” Members are trained and motivated to be friendly, approachable, and helpful without being condescending or mechanical.

3. The Magic of Action & Empowerment : “Cast Members” are trained to look for “combustion points” and are empowered to resolve them. Disney focuses on cast-guest communication, guest-flow, and service attention processes to eliminate or control these points.

Digitalization: faciliates the « guest experience » at

Disney Parks and Resorts

Walt Disney World:

the Magic Wristband

Disney’s Fast Pass

However it is « Guest Service » that makesthe Disney difference

Disney delivers via its cast members in Disney theme parks and Disney cruiseline a true spirit of « welcomingGuests »

Cast members are « on-stage » whenthey provide this Disney Guest Service

TAs or TOs can and must bringadded value to the « digital consumer » seeking a personalizedtravelexperience!

Your Human relationship in the « consumer experience » will remain key

Consumers are getting « lost » and some have or willlose trust in the multiple, on-line, price comparisonplatforms and booking sites

Many consumers are seeking « unique » travelexperiences in the face of Mass Tourism

Consumers will increasingly seek trustworthy, informed, personalized and customized advice!

Digital transformation is and will continue to bea series of wild waves!

« Surf’s Up » … ride it and enjoy it!

OBRIGADO!