China Daily Hong Kong Edition: Tourism with new tech

When a Lonely Planet executive became stranded in London after a volcano erupted in Iceland in 2010, he was very likely not thinking about shifting his company’s approach to new media then.

“He was very frustrated because he didn’t know London that well and he needed information. He suggested that other travelers in his position probably wanted information too,” said Anthony Dormant, general manager for Asia at Lonely Planet. To help, Lonely Planet decided to give away a handful of European city guides on its mobile apps for a few days.

“We put up one Twitter post and one post on our Facebook,” said Dormant. “Within four days we had four million downloads. Some people in our business freaked out, saying: ‘What have we done? We have given away our content’.”

At the time, each of those apps cost $12.99 and Lonely Planet had just given them to 4 million people.

“In the days and weeks after we had given away those apps, those people were sampling our products and were coming back to buy new products,” said Dormant. “Our run rate from our mobile application business increased by 50 percent and we never looked back.”

That accidental success underlined the importance for the travel and tourism industry to use new technologies efficiently. Industry leaders considered on Tuesday the use and impact of technology in the travel and tourism industry during a panel discussion sponsored by China Daily as part of the Global Tourism Economy Forum (GTEF) held in Macao.

The three-day forum brought together more than 1,000 industry leaders from around the world. The Macao government hosted the event that was co-organized by the China Chamber of Tourism. The event’s overall aim was to find new synergies within an industry that is an important driver of global economic growth but remains fragmented.

Through the three days, executives and officials looked for ways to foster growth in all areas of the travel and tourism industry, from finding new emerging market to putting on successful and profitable mega-events. On Tuesday morning, industry leaders discussed the impact of technology on the industry.

“The advent of the Internet and mobile technology has literally given a big shot in the arm to an industry that contributes $6 trillion to the global economy, 9 percent of global GDP and created 260 million jobs worldwide,” said Zhou Li, publisher and editor-in-chief of China Daily Asia Pacific.

Travellers are increasingly quick at adopting new technologies. A process that used to take years, now happens in a matter of months.

“It’s bringing incredible disruption. It’s bringing incredible threats to a lot of businesses and incredible opportunities at the same time,” said Dormant.

The free apps accident was something of a eureka moment for Lonely Planet, a 40-year-old business that started out as a simple guide narrating its founders’ experiences after a year-and-a-half trip across Asia from the UK to Australia.

“It started with paper stapled together,” said Dormant. “Today, that has grown into a significant multimedia business. We are best known for our guidebooks but we obviously have websites, and mobile applications, e-books, television, and we merchandise all kinds of things.”

New technology and media have revolutionized tourism and the way travelers manage their trips, from the earliest research for potential destinations to their purchase decisions and how they share their experiences.

“Technology has had a profound impact on the travel space,” said Brendan Jacobson, Global Head of Sales at Zagat Survey.

Few companies are experiencing the potentially explosive impact of technology as Zagat, which provides user-generated reviews of tourist destinations. Once exclusively a book that could be purchased in bookstores and covered only the US, Zagat is now fully available online and, since it was acquired by Google in September 2011, it has a target of including reviews of every such destination in the world, says Jacobson. Just a few years ago, he would have laughed at such an ambitious target. Information that once cost $20 per year to access online is now free through the company’s website or Google searches.

The Zagat Survey has evolved from a collection of photocopied pages in the 1970s to the Zagat Guide in the 1980s, “but today what we are seeing is that people are consuming content across any number of platforms and devices.”

The printed guides still exist, but they are now one avenue in a diversified platform of offerings all centered around the same content: from a website to reviews integrated in the navigation systems of cars.

This widespread availability of information creates massive opportunities but it is also creating a shift in the industry. Travel agents are increasingly pressured and often seen as irrelevant as airlines and hotels put their offerings directly in front of their customers.

At the same time, said Fan Min, Executive Director and CEO at mainland on-line travel retailer Ctrip.com, an information gap is disappearing and taking business opportunities with it. Just being a travel agency is not enough.

“Consumers know more and more about our industry. We cannot make money from the information gap any more,” he said. “Consumers have been empowered by technology over the past 10 years.”

For Ctrip the opportunity is staggeringly large. Some 70 million Chinese will travel internationally this year, said Fan, and the UN World Tourism Organization expects that 100 million Chinese will take an international trip by 2020.

While Ctrip aims to become a complete online travel platform, Fan is aware that it is increasingly difficult to program the potential needs of every customer in an online platform that is, at the end of the day, linear.

Others have tried. Ctrip’s foreign competitors like Expedia and Travelocity have realized that people are needed to complement the online platform. Expedia, for example, has hired staff to man the phones and answer questions from customers, said Peter Greenberg, Travel Editor at CBS.

“The powerful thing and also the challenging thing about travel is that it transcends all the demographics,” said Greenberg. “It is that powerful.”

Greenberg, who is one of the most recognizable travel journalists in the world, says all this media should empower a global conversation, one that requires a common language and standards but one that is open to everyone nonetheless.

“It is very easy to embrace the technology. You can do it at 3 o’clock in the morning, You can do it in your bathrobe. You don’t have to talk to anybody. Human means aren’t involved. So it is very expedient,” he said. “The question is, in the long run, how effective is it?”

Judging by the experience and statistics that Google has accumulated, the potential effectiveness of the current technological leap is enormous - at least in terms of reaching travelers.

The vast majority of travelers, 85 percent, do their research online, said John Liu, Executive Vice-President and Head of Greater China at Google. Perhaps even more surprisingly, the average traveller does 55 online searches before making a booking.

“You search a lot. You really compare and look for information,” said Liu. “All kinds of information is available online and that gives a lot of information to the travelers.”

But technology is virtually useless without the users. An overwhelming majority of travelers research and book online but one in two of them base their ultimate purchasing decisions based on recommendations from people or sources they know and trust.

At the same time, while technology has come a long way towards facilitating travel for millions of people worldwide, it has also failed to make leaps that could streamline the global infrastructure of travel and tourism, and this could lead to both customer frustration and lost opportunities for growth.

The vicissitudes of airline travel are a case in point.

Global Positioning System (GPS) technology that makes Google Maps possible and has made moving around a strange city easier for millions around the world, has also changed the way airlines operate.

If a traveler is going to fly on a budget airline from point A to point B on a regular schedule, it is fine to operate completely impersonally: a virtual boarding pass, self check-in of luggage and so on.

“Above a certain price point, the more complicated the itinerary, they (travellers) definitely want that conversation,” said Greenberg. The experience of Expedia and Travelocity - which had to hire people to man the phones - is a case in point.

But the use of technology goes beyond ticket sales. Airplanes rely on enormous amounts of technology to fly safely, as do air traffic controllers. Unfortunately, while technology is making the world smaller for the traveller, operators and regulators have not taken advantage of widely available technology to eliminate barriers.

“The GPS was a revolution for the airlines,” said Jean-Claude Baumgarten, a former airline executive, Vice-Chairman of the World Travel & Tourism Council and Vice-Chairman of the GTEF. “What is the pilot doing now? The pilot is just looking at the computer (to ensure it) is doing the right thing.”

The challenges of air traffic control is another problem.

“We have terrible resistance from governments and from air traffic controllers to get those systems (changed),” said Baumgarten.

In China, the military looks after air traffic control. The US has no airline policy. The corridors that airplanes fly now, were designed decades ago, basically at a time when airplanes followed railroad tracks to determine their direction.

“We haven’t advanced much further than the train tracks when you think about what we are doing today in terms of maintaining an effective, robust, on time, airline system,” said Greenberg. “They haven’t figured out how to make it work for the system itself. And until we do that... we are hurting ourselves economically whether it is in China or the United States.”

The challenges of technology go far beyond the choice to adopt it or not.

Technology is creating challenges in regards to customers because one thing technology does is to bring choice. And choice makes it harder for all kinds of brands, from hotels to airlines and everything in between, to earn consumers loyalty.

For content providers, the questions are easier to answer: Quality content and a variety of offerings can keep customers coming back.

For airlines, the question is a bit more difficult. One approach has led to a proliferation of rewards programs, but these have not always been successful. Frequent flyer programs have, at times, taken a life of their own as customers acquire miles but not always use them to buy plane tickets with a particular airline.

The All-China Federation of Industry and Commerce supported the GTEF, which was coordinated by the Global Tourism Economy Research Centre.

http://www.chinadaily.com.cn/hkedition/2012-09/12/content_15751370.htm