ERROR!STYLENOTDEFINED.

TRUVELLER–THETRUETRAVELLERS

MARKETINGPLANReportcombiledby:MIBWhitehallModuleA–Team7.PeterHjertsson,SylviaNguyen,NickVerstege,KateGaretovskaya,FranciscoBurgos&FrancescaZuffi.

TABLEOFCONTENTS

ExecutiveSummary______________________________________________________________________________________ 1

Segmentation&Targeting_______________________________________________________________________________ 2

UniqueSellingPoint&Positioning_____________________________________________________________________ 4

Objective,Pricing&Distribution _______________________________________________________________________ 5

Concept,Offers&MarketingMaterials_________________________________________________________________ 6

Promotion________________________________________________________________________________________________ 7

OnlineMarketingStrategy ______________________________________________________________________________ 9

Conversion,Referral&Retention______________________________________________________________________10

FinancialProjections___________________________________________________________________________________11

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ExecutiveSummary

Truvellerisaplatformthatconnectstravellerswithlocalexperts,brandedasacityguía,inordertodeliverauthenticandaffordableuniquetouristexperiences.Ittargetsthreesegmentsandfourtargetgroups.Primarilytargetedareemptynesters/escapingnesters,followedbyfamilieswithchildren,aswellasweekendtravellersandbusinesstravellers.Thesefourtargetgroupsallshareadesireto,whentravelling,gainauthenticanduniqueexperienceswithlocals.Truvelleraimstodeliverthesamequalityofexperiencesastravelagencies,butatamoreaffordablepriceandincreasedconvenience.

TruvelleraimstolaunchintheLondonmarket,andthemarketingobjectiveistogain1%marketshareoftotaltouristswithintwoyearsofoperations.Truvelleralsoaimstogaina2%totalmarketsharewithinitsfifthyearofoperationsineachcityitexpandsinto.

Thepromotionalmaterialswillbetargetedtowardseachtargetgroup,andwillincludetraditionalprintadvertisementsintheLondontubenetwork,incertainmagazinesandnewspapers,aswellasmoreunconventionalonessuchaspaintingabus.OnlineadvertisementswillbeusedtofurthertargetothertargetgroupsandincreaseSEO.

Themainpointofpromotionisatravelcampaign,wherecustomerswillbeabletowinafreetriptoanexoticdestinationfortwopeople,throughusingtheapp.Differentofferswillencourageuserstousetheappmorefrequently,astheywillincreasetheirchancesofwinningthetrip.Truvellerwillencourageword-of-mouthspreadingusingareferralstrategysimilartoUber,andattempttogaininfluencersandtraditionalmediacoverage.

Ultimately,throughexpandingintothreemajortourist-visitedcitiesourfinancialprojectionssuggestabreak-evenwithinthesecondyearofoperations,andwouldnecessitateaninitialfundingofcirca£750000tocoverdevelopmentandothercostsuntilprofitsaregenerated.

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Segmentation&Targeting

HIGHINCOME LOWINCOME

LACKOFTIMEBusinesstravellers Weekendtravellers

ABUNDANCEOFTIMEEmptynesters/escapingnesters

Familieswitholderchildren

Backpackers

PRIORITY:HIGHINCOME,ABUNDANTTIME“EmptyNesters”/”EscapingNesters”:Thissegmentcomprisesofparentsaged45-65fromtheBabyBoomergeneration.Thissegmenthaschildrenwhoaremovingoutorhavealreadymovedoutpreviously,leavingtheparentswithan‘emptynest’.Thisresultsinthemhavingabundantfreetimeandahigherincome.Duetotheemptynest,theyfeeloverwhelminglythattheyarenowabletovisittheirdreamdestinations,andwithoutchildrenathometheyfeelabletoindulgethemselveswithholidaysandtravelplanswhiletheyarestillhealthyandfit.Theyarerarelyaffectedbytheeconomiccrisisof2008andarelesstiedtotraditionalseasonaltravel.

Familieswithchildren:Thissegmentiscomprisedoffamilieswitholderchildrenaged12-18.Whentravellingwithchildren,familiesoftenaimtohaveaneducationalaspecttotheirtravels,tryingtoshowthechildrenhowotherpeopleacrosstheworldlive.Theyenjoyinteractionwithlocalsanddesireauthenticandlocalexperiencesfortheirchildrentoengageinandwith.Ingeneral,theyalsodesiretotraveltomoresafeenvironments,specificallythosewithlowerhealthrisksanddonotrequirevaccinations.Asthesetendtobelargergroups,familiesoftenplanlongertravelsandhavehigherincomes.

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SECONDARY:LOWINCOME,LACKOFTIMEWeekendtravellers:Characterisedbyhighereducation,thissegmentrepresentsyoungergenerationsbetween18-44.Theyhavetravelledthroughouttheiryouthand/orpossiblystudiedabroadatsomepointintheirlives.Theyarelessaffectedbytheeconomiccrisisof2008.Asub-segmentofthesearecouples,alreadyintheworkforceandwithalackoftimeavailablefortourismtravelling.Theyseektofilltheirlimitedvacationtimesasmuchaspossibleandtendtolookforuniqueexperiences.

TERTIARY:HIGHINCOME,LACKOFTIMEBusinesstravellers:Businesstravellersarecharacterisedbyhavingthemostmoneyavailablecomparedtotheothergroups,howeverwithverylimitedfreetimefortravelling.Mosttravelsarebusinesstrips,wheretheyspendmuchoftheirtimeinsidemeetingsandhotels.Theywereaffectedbytheeconomiccrisisof2008whenbusinesstraveldecreasedgloballybutthistrendisrecoveringsteadily.Businesstravellersseektospendtimeexploringthecitiestheytravelto,despiteshortavailabletime,andsearchforauthenticanduniqueexperiences.

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UniqueSellingPoint&Positioning

UNIQUESELLINGPOINT

Authentic&affordabletravelexperiences,withonesimplesolution.

Thisproductisdesignedbytruetravellers,fortruetravellers.Weunderstandtheneedtomaximizetravelexperience,whileeffectivelyutilizingotherresourcesliketimeandmoney.

POSITIONINGComparedtoexistenttravelandtouristsolutions,Truvelleraimstoprovidesimilarqualityserviceasatraditionaltravelagency,butatmuchloweracost.ThisisbecauseTruvellerskipstheagencyexperienceandputstravellersindirectcontactwithlocalexperts,our“cityguías”todeliverauthentictourismexperiences.

Targetaudience: activetravelerswithtoomuchchoice&lackoftimetoplantravels

(Business;weekend;emptynesters;families)

Pointofdifference: authenticexperiencesatmoreaffordableprices

Frameofreference:comparedtotraditionaltravelagencies&guides

Positioningstatement:

Truvellerconnectsactivetravellerswithtoomanychoices&alackofdisposabletimewithlocalexpertstodeliverauthentic,flexible,andtime-savingtravelexperiences,atmoreaffordablepricescomparedtotraditionaltourismsolutions.

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Objective,Pricing&Distribution

MARKETINGOBJECTIVETruveller’smarketingobjectiveistobecometheUberofthetravelindustry.Thismeansessentiallybringinganewproduct/solutionintoanexistingmarket–otherwiseknownasProductDevelopmentaccordingtoAnsoff’smatrix.Truveller’sultimateobjectiveistogain1%ofthetotaltourismmarketineachcountry,withinitssecondyearofoperations,and2%marketshareineachcountrywithinfiveyears.

PRICINGTosimplifyandensureguaranteedrevenuewhilechargingthecustomers,Truvellerwillenactabookingfeeof£3per‘transaction’.Wewillnotdeterminethefixedpricingstructureforthetours.Thepriceonaveragewillconsistof£15perhour,where75%oftherevenuegoestotheGuíaandtheresttoberetainedbyTruveller.Guías(ourlocaltravelexperts)willsetpricesaccordingtotheirprofessionalism,feedbackthattheywillgetfromthecustomers,andtheexperiencecustomerswanttoundertake.

DISTRIBUTIONWewillfirstlaunchourproductinLondon,aimingtoget2%ofthetouristmarketbytheendofyear5.Londonisamarketwithhighlevelsoftourism,in2014estimatedtobeover15milliontouristsvisiting,spendinganestimated£11billion.OncesecuringthefirstfootholdintheLondonmarket,Truvellerwillexpandtoothertourist-popularcitiesincludingParisandNewYork.Furtherexpansiontothesemarketsinyears2and3relativelywillgiveusanopportunitytocoveralmost2%ofthetouristmarketinthesecitiesoverall.Ourchoiceoftheseexactcitiesisbasedontheannualnumberoftouristscomingthere,andtherefore,thehighdemandonservicesweprovide.

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Concept,Offers&MarketingMaterials

CONCEPTTruvellerisaplatformthatmatchescustomerswithlocalexpertsindesiredtraveldestinations.Userswilllogin,createaprofile,andselecttheirinterests.Thesecouldbeanythingfromfood,museums,music,art,etc.Atthismoment,thecustomerwillalsoconnectapaymentmethod

Aftertheirprofileiscreated,thecustomerwillchooseadestinationorlocation.Atthesametime,theywilluseacalendarfunctiontoselectwhichtimeslottheyhavefree.Thereafter,theywillbepresentedwithalistoflocalexperts-whatwewillcallaguía-whohassimilarinterestsandisfreetoactasaguideduringtheselectedtimeslot.Atthatmoment,thecustomercanbooktheguíaforaselectedamountoftime,andsimilartoUbertheywillbebilledafterwards(roundedtothenearesttenminutes).

OFFERSTheprimaryoffersandUSPofTruvelleristhatwewilldeliverauthentic,trustworthy&uniquetravelexperienceswithlocalexperts.Afterthat,wewilldevelopaseriesofofferstoencourageahigherconversionrateforcustomerstojoinTruveller.Theseincludeofferinga“firsthourfree”signupbonus,givingcustomerstheirfirst60minutesatnocharge.

Furthermore,wewillattempttopartnerwithcompaniestogivethemexclusivediscountsforourservices.Lastly,wewilllaunchacampaignwhereuserscancompetetowinafreetriptoaselectdestination,whichwillchangeannually-ourofferisthatforevery£10spent,theywillreceiveoneextraticketintheraffle.

MARKETINGMATERIALSTheprimarymarketingmaterialstodevelopareacompanylogo,awebsite,andtheapplicationitself.Theseshouldbesimpleandeasytounderstand,withagreatUIandUXdeveloped.Furthermore,thelogoshouldbeeasilyrecognisableandconveyasymboloftravel.Thelogowillbethemainoutwardsmarketingtooltoincreasebrandrecognition.

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Promotion

EMPTYNEST&FAMILIESAdsontravel-relatedwebsites(tripadvisor,timeout,hotelbookingsitesetc)

Tubeads

Paint-a-bus

Radio

Adsingrocerystores

PRCampaigns

WEEKENDTRAVELLERSSocialMedia

Influencers&PRcampaign

Tubeads

Paint-a-bus

maintargetgroupfortravelcampaign

BUSINESSTRAVELLERSAirports-lounges,billboards,airlinemagazines

Tubeads

Paint-a-bus

Radio

Businessnewspapers-WSJ,Economist,TIME,FT

Magazines-Esquire,GQ

Eachofourdifferentpromotionstrategiesisselectedtoconnectwithacertaintargetgroup.Aboveisanoverviewofthedifferentpromotionstrategieswewillusetoreachouttoeachtargetsegment,includingexamplesofwhichspecificchannelscouldbeused.

ADVERTISEMENTSThesewillincludeacombinationoftraditionalprintadvertisementsinselectedareas,suchastheLondonundergroundnetwork;radioadvertisements;aswellasweb-basedpromotionviatravel-relatedwebsites.Wewillfurtherplaceadvertisementsingrocerystorestospecificallytargetmothersandfathers.Businesstravellerswillfurtherbetargetedusingairports,selectedbusinessnewspapers,andmagazines,suchastheWallStreetJournalandGQmagazine.

PAINT-A-BUSThisseesTruvellersponsoringthedecorationofaLondonBuswithanadvertisement.SimilartothepromotionoftheJamesBondfilmSpectre,thisbuswillincreasethebrandexposureto

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customersandincreasebrandawarenessacrossLondon.SimilarapproacheswillbetakenwhenexpandingfurtherintoParisandNewYorkCity.

SOCIALMEDIAOuronlinepromotionalstrategyalsoincludesusingsocialmediaplatformssuchasFacebookandTwitterinordertoreachouttofurthertargetgroups,whospendmuchoftheirtimeusingthese.Thiswillincludeadvertisementandsponsoredpromotiontospecificallytargetyoungtravellerswhospendmuchoftheirtimeusingsocialmediatoengagewithfriends.

PRCAMPAIGNThroughoutthevariouspromotionmethods,Truvellerwillattempttogaintraditionalmediacoverageinordertospreadbrandawareness.Thiswillincludetargetingselectedjournaliststowritearticlesand,similartothefast-growingYPlanapplication,gainingmediatractionbyleveragingouruniquebusinessmodel,aidinginourpositioningversuscompetitors.Thiswillalsoleveragetheplannedannualtravelcampaign(seebelow).

CAMPAIGN Eachyear,Truvellerwillselectanexoticdestinationforatravelcampaign,allexpensespaidfortwopeople,thatuserscanwinthrougharaffle.Byusingtheplatform,customerswillhavetheirnameenteredintotheraffle,andseveralotherofferswillcombinewiththiscampaigntoencouragetheuseoftheapplicationtoincreasetheirchancesofwinning.

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OnlineMarketingStrategy

KEYWORDSExamplesofthekeywordsthatwillbeusedforouronlinemarketingstrategywillbeinreflectionofourcompetition,namelyonlineguides,traditionalguides,andotherapplicationsandplatforms:

• “whattodoinLondon/Paris/NewYorkCity”(andfurtherintoeachcityTruvellerexpandsinto)

• “tourguides”/“cityguide”/“tourapps”

SEOSTRATEGY: • promotewebsite&appviasocialmediachannels• encodeoptimalkeywordsintothewebsite’sHTMLcoding• introduceablogpromotingtraveltocertaincities• encouragepartnershipwithlocal,regional,andnationaltourismauthoritiesinorderto

cross-linkwebsiteandmutualpromotion

PAIDADVERTISEMENTThroughouttheyear,digitaladvertisementswillbePPC(pay-per-click)duetomorereliableandarguablymorecost-effectivestrategytorefercustomerstothewebsite.Leadinguptoandduringpeaktravelseasons,digitaladvertisementswillshifttopromotedcontentinordertomaximisetotalreach

DIRECTMARKETINGEverytwoweeks,customerswillreceiveanemailwhereTruvellerpromotesacertaintraveldestination,andinashortstoryexplainshowtheTruvellerexperiencecouldlookforacustomer.Thefrequencywillallowthistoactasa‘reminder’tocustomers,andalsoprovidelocaltourismaplatformwheretheycanpromotethemselves.

Thesameemail‘story’willbeuploadedtoablogfunctionontheTruvellerwebsite,wherecustomersandwould-be-customerscanread.ThiswillfurtheroptimiseSEOandconnectwithotherwebsites.

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Conversion,Referral&Retention

CONVERSIONSTRATEGYUsingthedirectmarketingstrategyonabi-monthlybasis,Truvellerwillremindexistingusersabouttheauthenticanduniqueexperiencespeoplecanhavewhileusingtheapplication.Byhostingthesamestoryonthewebsiteasablog,Truvellerwillalsodemonstratetowould-be-customershowtheapplicationworksandmakestravelexperiencesuniqueandauthenticcomparedtousingtraditionalsites.Recommendationsandcommentswillalsofurtherencouragethemtousetheapplicationandincreaseconversionrates.

REFERRALSTRATEGYForeachsuccessfulreferral,whichwedefineassomeonedownloadingtheappandcreatingaprofile,acustomerwillreceiveoneextra‘ticket’intherafflefortheyearlytravelcampaign.ThiswillbecarriedoutsimilartoUber,whereeachuserhasauniquepromotioncode.Thiswillworktogetherwiththeuser’s“firsthourfree”offertoincreasereferralsonapeer-to-peerbasis,usingwordofmouth.

RETENTIONSTRATEGYWaystoretaincustomerscouldinclude:

• Birthdaydiscounts:a10-15%discountonthepriceofaguía,withanexpirationdatewithin2months;

• Directmarketing:usingtheemail/blogevery2weeks,customerscanfollowusersandseeanidealversionofwhattheycouldthemselvesexperience

• Freetravelcampaign:byusingtheapp,theyincreasetheirchancesofwinningtheexclusivetravelcampaignfortwopeopletoanexoticdestination

• Customersupport:byhavinganeffectiveandfriendlycustomersupportsystem,anyissueswillberesolvedinanefficientmanner.

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FinancialProjections

TheappandthewebsitewillbelaunchedinLondonthefirstyearofoperationwithanprojectednumberofusersaround10,000.Thetargetofthesecondyearistoexpandtheapp’scoveragetoParisandthethirdyeartoNewYorkCity.Thesecitieshavebeenselectedduetoveryhighlevelsoftourism.Thegoalistoreachthe1%oftouristsineachcityonthesecondyearofoperations.Thetablebelowshowsourprojectedgrowthofusers: Yr1 Yr2 Yr3 Yr4 Yr5

London 10000 170000 200000 300000 340000

Paris - 30000 150000 250000 300000

NYC - - 250000 450000 750000

TOTAL 10000 200000 600000 1000000 1390000

ThenumberofcustomershasbeenestimatedusingthenumberoftouristsvisitingLondonin2014,approximately17million,Paris(15million),andNewYorkCitywithupwardsof50milliontourists.Withregardtothebudget,therevenuesarecomposedfrombookingfeeof£3foreverytourplusthe25%ofaveragehourlyratewhichisabout£15,assumingthatonaverageatouris3hours.Bookingfeerev £30000 £600000 £1800000 £3000000 £4170000

Marginalrev £112500 £2250000 £6750000 £11250000 £15637500

TOTAL £142500 £2850000 £8550000 £14250000 £19807500

Thedevelopmentcostsincludetheexpensetocreatetheappandallthedevelopmentandmaintenancerequiredsubsequenttothev1.0appaswellforthewebsite.Weassumedtohireatthebeginningtwostaff,oneresponsibleformarketingandthesecondforaccounting;thesecondyearcorrespondingwiththeexpansiontoParisanothertwostaff

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willbehiredeachsubsequentyear.Marketingcostsarerepresentedbythe30%oftherevenues.TheTruvellerheadquarterswillbeinLondonandtheestimatedcostswillbe30%ofthesalariesfollowingalineartrendwiththeassumptions.Developmentcosts £750000 £250000 £250000 £250000 £250000

Salaries £60000 £120000 £180000 £240000 £300000

Marketing £42750 £855000 £2565000 £4275000 £5942250

Office £18000 £36000 £54000 £72000 £90000

TOTAL £870750 £1261000 £3049000 £4837000 £6582250

Thenetprofitestimatedwiththisdataimplieswewillonlyrunatalossduringourfirstyear,andbreakevensoonintooursecondyear.NETPROFIT (£728250) £1589000 £5501000 £9413000 £13225250

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Appendix

Situationanalysis:travel&tourism(SOURCE:CBI,“CBITrends:TourismfromEurope”,2015)

“TheEuropeanoutboundtourismmarketisgoingthroughsomeprofoundchangesthatofferopportunitiesfortourismcompaniesfromDevelopingCountries.Thesearchforexclusive,authenticandpersonalisedexperiencesandtheriseofnewtargetgroupsarecreatingdemandfornewproducts.Recoveringandupcomingeconomiescreatenewimpulsesfortourism.Advancesintechnologyarecreatingnewtoolsformarketingandcustomerrelationships.IncreasedconcernforsustainabilityisinfluencingEuropeanconsumersandtouroperators’choiceoflocaltourismsuppliers.”

• Growinginterestinanexclusivetouristexperiencethatyieldlastingmemories• Authenticity–lookingforrealexperiencesinnon-traditionaldestinations;meaningfulandlife-

enhancingexperienceswithlocalpeople• Customisedtravel–travellersaremoreflexibleandexperienced,wanttocontroltheselectionof

andcompositionofholidays• Morespecialisedholidays–ratherthangeneric,mass-travelplanstouristsareratherseeking

specificsegmentso Adventuretourismo Community-basedtourismo Culturaltourismo Naturetourismo Wellnesstourismo Wildlifetourism

• Newtargetgroups–ageingpopulationandchangingcompositionofhouseholdso Seniors(65+)–healthierandincreasinglifeexpectancy,travelduringoff-peako Singleso Singleparentso Disabledtravellerso Gayandlesbiantravellerso Youngtravellers(15-29)o Familieswitholderchildren(12-18)o Multi-generationalfamilies

• Peer-to-peertravel–Airbnb,Homeawayetc.posingathreattotourismcompaniesastheyprovideamoreindividualisedexperienceatlowercosts

• Recoveringeconomiesmeansmoretravel–Europeanoutboundtourismisgrowing• Highincomeremainsstablemarket–moredisposableincomebutalsomoredemanding• Socialmedia’sroleincreasingwhenbookingtravel• ‘Mobileready’–Europeansmosttech-savvy,extensiveuseofmobiledevicestobooktravel.20%of

UKtravelbookedusingmobiledevice.(Phocuswright)• Bloggingincreasinglyusedasmarketingtool• Increasingconcernforsustainability• Increasedconcernforliability(insurance)–EUregulationssayifdealingdirectlywithEU

consumers,sellerisliable.Intermediaries:liabilityindirectbutapplicable,usuallypassedontoEUtouroperators.

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Industryanalysis:travel&tourism(SOURCE:CBI,“CBIProductFactsheet:Community-BasedTourism(CBT)fromtheUK”,2014)

“TheEuropeanmarketoffersgoodopportunitiesfortourismprovidersinDevelopingCountries.Itisoneofthelargestsourceregionsforlonghaultourism.NotonlythelargemarketsGermany,theUnitedKingdomandFranceofferopportunities.EasternEuropeancountriesarealsopromising,astheyhavethehighestgrowthratesintripstoDevelopingCountries.SmallerNorthernandWesternEuropeancountriesofferpotentialaswell,becauseoftheirhighernumberoftripstoDevelopingCountriespercapitaandahigherexpenditurepercapitaatthedestination.“

• Europealargesourceregiono Over16%oftravelfromEuropearetodevelopingcountries–approximately64million

tripsin2013.Stilldominatedbynon-developingcountries,butthereislargemarketsharetogainfordevelopingcountries.

• Europeanlong-haultourismcanbesegmentedintothefollowinggroups:o LargerEuropeancountries(UK,Germany,France)

§ Representnearlyhalfofalltraveltodevelopingcountrieso EasternEuropeancountries(Estonia,Latvia,Lithuania,Poland,CzechRepublic,Slovakia,

Hungary,Romania,Bulgaria,Slovenia,Croatia)§ Rapidlygrowingeconomies,highestannualgrowthintripstodeveloping

countriesbetween2009-2013o SmallerWesternandNorthernEuropeancountries(Sweden,Netherlands,Belgium,

Denmark,Norway,Finland,Austria,Switzerland)§ Highestnumberoftripstodevelopingcountriespercapita,highestinternational

tourismexpenditurepercapita• Emergingmarkets–Europetraditionalsourcemarketfortourism,butemergingcountrieslike

BRIC,India,SaudiArabia,Philippines,Qatar,Colombiaexperiencingsubstantialgrowthintourismexpenditure

• Regionalmarkets–growthforecastedaround3.8%peryear2010-2020;Americas,AsiaandPacificexpectedtoshowfastestgrowthintourismduetointra-regionaldemand.

DevelopingCountryDestinations:

Asia–53%marketshareforEuropeantravel,Turkeybyfarmostpopulardestination

DevelopingcountriesexperiencinghighestgrowthinEuropearenewtouristdestinations–especiallyinterestedinroundtripstolearnmostaboutlocalcultureandnature

• German,Austrian,Swiss,Dutch,UnitedKingdomandScandinaviantravellersmostlyvisitTurkey,Thailand,EgyptandChina.

• FrenchtravellersespeciallygotoMorocco,TurkeyandWestAfrica.• SpanishtravellerspreferMorocco,TurkeyandtheDominicanRepublic.• EasternEuropeantravellersmostlygotoTurkeyandUkraine.

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Competitionanalysis:travel&tourism(SOURCE:CBI,“CBIFieldofCompetitionTourism”,2014)

“TheEUlong-haultourismmarketisatraditionalmarketwherecompetitionisfierceandtouroperatorsstillholdstrongpositions.Theycontroldistributionchannels,determinethecompositionoftourismproduct/servicerangesandsetprices.Tourismcompaniesfromdevelopingcountries(DCs)thereforeneedtoinvestinbecomingacquaintedwithEUtouroperatorsandbuildinguplong-termrelationshipswiththem.Theyshouldalsofocusonobtainingstandards,certificationandliabilityinsurancetoacquireacompetitiveadvantage.Alternatively,theycanalsotargetEUtravellersdirectlywhoincreasinglycontactlocaltourismcompanieswithouttheinterventionofanintermediary.Tourismcompaniesthataredifferentanduniqueintheirtourismofferhavethebestchancestosuccess.“

MARKETENTRY

• Newentrantso Focusonstandards,certification&liability:technicalbarriersvirtuallynon-existent;if

travelisofferedoutsideEUthennolegalEUrequirementsapply.HoweverEUbuyersfindnon-legalbarrierssuchasstandards,certifications,andliabilityimportant,makingbarrierstoentryhigh.

o Professionalismandtrustimportant:EUbuyersusedtoclearcommunication,highqualityproducts/service,lookingforprofessionalpartners.Mainbarrieristogaintrust,involvingalong-termrelationship.Tourismcompaniesin‘new’destinationsfinditeasiertoenterthemarket,noestablishedcompaniesexist

PRODUCTCOMPETITION

• Substituteso Internationalsubstitutesdifficulttotackle:destinationswillcompeteheavilywitheach

othertryingtoattractmoretourists.Touristschoosespecificdestinationbasedonanumberoffactors,oftenbeyondreachoflocaltourismcompanies

o Externalsubstitutionintimesofcrisis:duringeconomiccrises,substitutiontendstobeexternal–travelspendingdecreasesasmoneyisspentelsewhere

COMPANYCOMPETITION

• Degreeofrivalryo Intenserivalry:competitionisfiercenationally,astherearemanylocalcompaniesinthe

samedestination.Differentiationonproducts/serviceslow,mostlyprice-focused.Newproductseasilycopied,makesdifferentiationandproductdevelopmentmuchmoredifficult.

• Buyerpowero Buyersareincontrol:advancingtechnologyisphasingouttouroperatorsasbuyerscan

increasinglyconnectwithlocaltourismcompaniesdirectly.• Supplierpower

o Bargainingisn’teasy:buyerscanchoosebetweenawiderangeoftourismcompanies.Supplierpowerislow,withmorenichedtouroperatorshavingmorepower

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Channelanalysis:travel&tourism(SOURCE:CBI,“CBIChannelsandSegments:TourismfromEurope”,2015)

Marketchannels

• Traditionalbusinesspartnersstrong:manyEuropeantravellersstillusetraditionaltouroperatorswhentravellingtodevelopingcountriesornewdestinations,especiallyfor45+.Expectedtoremainlargeovernextfiveyears.

• Experiencedtravellersbookdirectly:Specificallyyoungertravellers(18-45)arebookingwithlocaltourcompaniesdirectlyonline.Theyalsotendtousetravelguides(e.g.LonelyPlanet)tomaketravelarrangementsonthespot.Morewell-recogniseddevelopingcountriesattheforefront(e.g.Thailand,Egypt,SouthAfrica)overlesser-knownones.

• Emergenceofpeer-to-peer:newandfast-growingdistributionchannel,bypassingtourismcompaniescompletely

• Portals:Newintermediariesareemerging,positioningthemselvesasinformationandpromotionplatforms.Theyprovideinformation,butbookingsetcarearrangeddirectlyviatheprovider.Portalisthereforenotliable.

• Independenttravelcounsellors:essentiallytravelagentsthatare‘freelancing’Marketsegments

• Tourismindustryo Adventuretourismo Community-basedtourismo Culturaltourismo Naturetourismo Wellnesstourismo Wildlifetourism

• Tourismindustryactorso Localtourismprovidero Inboundtouroperatoro DestinationManagementCompanyo Peer-to-Peerplatformo Onlinetravelportalo Onlinetravelagento Independenttravelcounselloro Outboundtraveloperatoro Majoroutboundtouroperatoro Specialisedoutboundtouroperatoro Travelagency

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SWOTAnalysis–travelindustry

Strengths• Strongdemandfortravel–815million

googlesearchespermonth• Competitivemarket,184countrieseach

withtheirownTourismAuthority• Price-focusedindustrymeanstravelis

cheaptoday

Weaknesses• Hugemarket,incrediblyfragmented• Smallbudgetsforoperations• Lowprofilesinmanycountriesdueto

smallfunding

Opportunities• Hugepotentialtodevelop,3%ofglobal

GDPspentontravelandtourism• Expectedgrowthof3.9%perannum

2015-2025• Internetallowsforlargedisseminationof

information• GenerationsX,Y,Zaremuchmore

comfortableusinginternetversustravelagents

Threats• Pricefocused,commoditydominated

marketplaceleadstoanoversupplyofinformation&choiceparalysis–22websitesvisitedbeforepurchasingtravel

• Currenttravelwebsites(e.g.Tripadvisor)getbadPRfor‘handling’negativereviews–customerawarenesshigh

• Travelagentsnotconnectingwithyouth,andBabyBoomergenerationisfading–endofanera?