At the beginning of the jet age, travel was a luxury to be afforded by the few. Affluent people dressed up in suits and ties, donned fancy dresses and traveled around the world to “put the red pin on the map.” For those lucky few, this was a great time of exclusivity and pampering.
The travel industry evolved and grew. Enter the age of packaging tours that replicated trips that previously only the elite could afford. Programs contained the iconic attractions that everyone wanted to have their picture taken in front of – the Eiffel Tower, Great Pyramids, Machu Picchu.
Modes of travel evolved. From motorcoach to train to ocean cruise ship to river cruise ship, the methods in which people arrive and interact with the destination improved, and in many cases, became the destination themselves.
The Age of Choice, Flexibility, Personalization
Today’s generation of travelers represent a significant challenge for tour and travel companies. Unlike past generations they have access to destination information and social networks that in the past only the most sophisticated travel experts could replicate.
Think about the television industry. In the past, networks would create shows based on what they thought people would want to watch. And of course, those people would have to watch it at a specific time, on a specific day of the week. Channels and options were limited. Today, not only do most people have DVRs, but they also enjoy hundreds of channels that appeal to their specific tastes.
The tour industry faces the same dilemma, and all segments need to give their customers unique and personalized experiences in order to stay relevant. Travelers these days don’t want to just see things, they want to personally experience them and immerse in the authenticity of the destination. They ask, “Where do the locals go?” and “what do the locals do?” On the surface, this sounds easy to deliver. Rather than just see Tuscany, why not have a lovely meal under the sun at a fifth-generation winery? Rather than just view a glacier in the Canadian Rockies, why not hike up one?
If the best BBQ is at a small shack that only the locals visit, why not take your group there? Many tour operators, in fact, currently offer these experiences. The challenge is making sure they are truly authentic and modular, so that customers can “customize” their vacations. Let’s face it; no one wants to do the same thing everyone else does.
A by-product of this is the proliferation of the specialist or niche tour operator. The days of being all things to all people are closing; today’s market has gotten too broad to expect that any one company can appeal to everyone. It is incumbent that operators specialize and offer more of these experiences.
The Killer App
This dynamic challenges the economic models of traditional tour operators. Tour margins are enhanced by volume purchasing, high load factors, and keeping operational overheads under control. This assumes that they are able to easily replicate the products and programs they know people will buy. So, if the market is changing so quickly, how can they continue to adapt in a cost-effective and efficient way? One solution is offering a series of options and experiences to a base, core package so that, in effect, everyone has a customized tour program to some extent after adding in their specific interests and components. Those “experiences” and “options” that end up being chosen most frequently thereby become the new core product, and the tour operator can now reap the economic benefits that purchasing these packages in bulk will yield.
History is full of businesses that did not adapt their products, marketing, and distribution. Know your customers and constantly challenge your definitions of what is cool and hip with your products, and you will avoid becoming the Blockbuster Video of the tour industry.