As PhocusWire has reported over the past year, the tourism and hospitality industry has been decimated by the COVID-19 outbreak. The recovery will be lengthy, and it will be complicated.
That said, it’s good to hear that many travel operators, including tour and activity providers, have made a number of business changes in response to the impact of the past 12 months. New measures include the expansion of refund policies, the creation of small group experiences and the introduction of virtual tours. Market response has been mixed to say the least, but it’s encouraging to see the positive efforts being made.
What we’ve learned from past crises is that businesses adapt, and often the successful ones create a new blueprint of doing things, with models that quickly become adopted by the mainstream. If we look at what happened in the hotel industry following the Gulf War, the Marriott Corporation split into two companies: Marriott International and Host Hotels. This pioneered the low asset franchise model that became widely adopted by the hotel industry around the world.
After the financial crisis of 2008, many consumers had to seek new ways to find employment. Companies such as Uber and Airbnb seized this opportunity, both founded during that specific time of economic uncertainty.
As many travel companies cut budgets to save cash, they should remind themselves that, during a crisis, marketing is more important than ever, as is customer contact and offering value-added services that provide a real solution to their needs.
With the easing of lockdown measures signaling a reopening of hospitality, travel and leisure businesses, tours and attractions will have the opportunity to benefit from domestic tourism. But they face challenges to remain viable, while complying with strict COVID-19 health and safety regulations.
So how can they remain viable, or as one of my partners challenged me last year: How can they not just survive but grow and entice their customers to spend more?
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Research has found that brands can speed up their recovery post-recession by building brand value and awareness during a recession. By communicating with customers and offering solutions that work for them, as well as your business, you build customer relations, create new routes to markets and expose opportunities to increase spending.
The global tours and activities industry, which pre-COVID was valued at around $180 billion and growing (research analysts at investment bank SunTrust Robinson Humphrey), has the same challenges as hospitality, airlines or any other travel-related business. What are the pain points during this crisis, how do you address them and how can you turn them to your advantage?
According to a report last year by Arival, the percentage of bookings made online still sits below 30% but is growing. Walk-ups will no longer work, and as people plan ahead and research the safety of tours, more sales channels will go digital.
New solutions have been developed, enabling tour providers to manage their inventory and sell directly online or through third parties - including online travel agencies. Some of the more advanced systems have emerged from this crisis, such as our own Ticknovate. These systems enable tour operators and transport businesses to manage their ticketing business, then expose every aspect to all customer touch points - OTAs and third-party software vendors via Rest APIs. Staff on the ground can offer upgrades to existing bookings and manage any booking inquiries. Users are able to upsell and cross-sell, creating combos such as tours and transport deals or other party products for a commission.
Systems like these are designed to simplify the ticketing process while enhancing online sales - great news for this multibillion-dollar industry whose shift to online is reminiscent of the early days of online hotel and airline booking.
Keep the upsell relevant
Upselling or cross-selling can expand and improve relationships with current customers as well as increase revenue, productivity and efficiency; however the checkout flow should feel cohesive, and it's important to align the product or add-on you’re looking to upsell to the customer’s initial purchase. If you’re selling multiple activities, offer a product that’s most relevant to the activity the customer is booking. Think critically about what would enhance their experience. A photo package may work great for a climbing course, but an unlikely option for someone going on a wine tasting tour.
Choose wisely. Remember that while the item needs to be relevant and exciting to the customer, it also needs to be cost effective for you as the business owner.
As we consider the economic consequences combined with the explosion of new technologies, it’s exciting to see how companies respond and evolve and how the travel industry emerges from this crisis.