Building tourism growth on change drivers

Incorporating industry drivers can uncover new opportunities in your growth portfolio

Recent geopolitical events, climate change, information overflow, workforce issues, and new segments are major forces of change shaping the travel and logistics sector today. Players that can incorporate these drivers in their strategic planning are best placed to enjoy sustained growth leverage. Synovate's research in this sector over the past five years has identified ten timeless tourism growth strategies that may enable companies to take advantage of such trends.

1. Growing the industry. The first source of growth comes from developing the sector as a whole from top–down, as seen in how the regional economic integration, travel restrictions, the search for jobs, and common language ancestry in the EU has led to an influx of Eastern European tourists. The advent of Low–Cost Carriers, changing role of ASEAN, and easing of travel restrictions such as in China or the Middle–East, will also drive growth in Asia.


2. Targeting specific markets. Traditional tourism segments have come from developed markets in America, Western Europe, and the Middle–East. Apart from the major BRIC markets, the N11 emerging markets also represent untold potential to the marketers that are willing to invest in bridging their dissimilar cultures.


3. Taking share. Hospitality firms first identified competing destinations with a predominance of tourists from certain origins, as well as the reasons or painpoints behind the high tourist visits, such as for Scandanavians in Thailand due to cheap airfares and convenient flight routes, Australians in Bali due to geographical proximity, or Middle–Easterners in Malaysia due to cultural proximity. They then learnt from the most successful attractions at these competing destinations, and started attracting these same tourists to their own destinations. For example, hospitals leveraging on the ageing baby boomer population, rising healthcare costs, and local expertise and costs advantages created sustainable businesses in medical travel after the Asian Financial Crisis, and continue to benchmark their technology, service quality, and expertise with best in– class competitors to gain market share.


4. Borrowing share. Players then realized that they could entice tourists at nearby countries to also make stopovers at their own countries with budget airfares. For instance, Hong Kong and Singapore are frequently used as springboards into China and Southeast– Asia respectively. These countries may do well by similarly tapping into the huge tourist numbers in neighboring countries such as Australia, China, or Thailand.


5. Improving segment attractiveness. Traditional tourist growth strategies focused internally on building distinctive attractions to pull in tourists, then building general awareness for these attractions. Successful players have however invested in developing distinctive brand awareness to help increase tourist consideration amid the growing clutter of information. To support this, countries then developed tourism niches such as by positioning themselves as medical, business, education, or sports hubs. Finally, successful players also work to ease entry barriers such as stringent visa controls, while increasing visitor expenditure with multiple price choices for various tourist segments (e.g. budgetto premium–quality carriers, hotels, and shopping options).


6. Converting visitors. More countries are investing in technology to tap into the widespread usage of online transactions, while leveraging on their high airport traffic and special hotel subsidies, to encourage in–transit passengers to make a stopover. This is estimated to convert an additional 400 – 600% of visitors into tourists.


7. Understanding own tourists. Companies are also investing in CRM systems to investigate the origins, length of stay, average total expenditure, demographic segments, and even psychographic drivers or their visitor base. Researching into the perceptions, concerns, and decision drivers of niche segments has paved the way for the 'feminisation' of tourism in cultural, wellness, and ecotourism packages. Similarly, psychographic research has shown that many tourists from Japan, China, Korea, or India visit casinos due to the lack of legitimate gambling outlets in their home countries.


8. Extending tourist stay. Players are also investing in their complete brand architecture, delighting visitors at each touchpoint to grow affinity, encourage a longer stay, and even stimulate domestic tourism. This requires heavy inter–agency coordination (e.g. more exchange programmes at universities or work–study attachments), behavioral, and perception modifications, yet targeting existing tourists has consistently shown to deliver higher returns on marketing investments than investing in attracting new tourists.


9. Convincing repeat visits. Building trust with a consistent brand promise certainly helps to increase repeat visits, yet reward programmes have also shown to be good complements to realize the actual potential in each tourist. Hotels are learning from airlines in creating loyalty programmes, yet shopping centers, restaurants, and even countries have yet to fully exploit such tools to maximize their Tourist Lifetime Value.


10. Building tourist 'referrals'. Existing tourists – including expatriate workers, foreign students, business visitors, or medical tourists – may be encouraged to bring their family and friends to visit. Viral marketing, or targeting the thought leaders of new psychographic 'tribes', has also shown to be successful in obtaining referrals for other workers, students, or patients to visit a country.

As the global tourism market consolidates, players will increasingly find that they now need to compete by incorporating such realworld developments into an overarching, opportunity–based strategic portfolio for growth.