Tour operators are an intriguing part of the travel industry. They’re elusively difficult to capture in a single definition because they form a diverse constellation of products and services, all of which reflect different cultures and geographies.
In many ways, these operators are also the heartbeat of the travel industry, providing what so many travelers desire; a unique travel experience in distant destinations and different cultures. The majority of those travelers have neither the time nor inclination to stitch together the many parts of a compelling travel experience; the destinations; points of interest and special activities. Instead, they rely on operators to use their years of experience, expertise and unique array of local suppliers to bring magical trips to life.
As the interest in highly personalized travel continues to grow, so also does the demand for the travel company who can deliver the required mix of conventional travel logistics with innovative activities at extraordinary locales.
While this is good news for the tour industry as a whole, it also presents challenges to many operators.
The Changing World of Tour Operators
Does it seem paradoxical that good news like higher demand should cause headaches for operators? What lies at the heart of the problem is an intersection of: the travel’s highly competitive nature; a unique role played by operators; and a fundamental rule of business.
The travel industry is the scene of constant, competitive battles for market share, the consequence of which is often consolidation by attrition or acquisition. Many smaller and/or specialized operators hold niches previously too small to be attractive to larger competitors. However, as travel activity in these niches has grown, that circumstance has changed. Faced with stiffer competition, niche operators often find their business models struggling to meet new challenges.
One particular challenge is their ability to create both a dynamic online presentation for their tour services plus effective, multiple sales channels. To some extent, this online challenge can be traced to their customer’s behavior. Many travelers simply don’t make tour decisions until they get to their destination. Often a bigger reason is the complexity of the tour business itself. Creating a unique tour experience is a complex task involving many local suppliers. Adding the prospect of new technology investments and possible disruptions to their business operations creates a stressful environment. The presence of very different and competing priorities violates a fundamental rule of business: stay focused on what sets your product and services apart from the competition.
The Key Question for Tour Operators
Every operator committed to successfully defending and increasing market share needs to understand two things: 1) their company must be competitive in online commerce; 2) travel technology innovation has uncoupled competitiveness from large investments and/or painful implementations. This means the key management question becomes this: do my existing ecommerce capabilities measure up to the competition, or is a technology required?
In order to answer that question, the travel company must take an objective, focused look at their online commerce abilities in comparison to industry standards. Here are some guidelines:
Content & Booking Platform: a tour company must have more than just a travel website, it needs an online platform which makes it easy to assemble and market travel packages for accommodations, transportation, transfer services and specialized services around points of interest, activities, events and excursions. For example:
- Tour Package Customization: does your travel website make it easy for customers to do more than simple online bookings. Does it allow the consumer to build customized tour packages by choosing accommodations, transport and other services – based on links and preset rules and restrictions? Does it allow static packages to be upgraded with additional services; like tours , built around transportation services, with multiple destinations and multiple accommodation units
- Customized Package Bookings: are real-time bookings of customized packages supported by dynamic inventories and availabilities, based on: inventory rules & restrictions; bookings; stay length and cancellation policies?
- Descriptive Content: is the website able to support packages and services with a wide variety of personalized, descriptive content from either: 1) the company’s repository of proprietary photos, descriptions, media for points of interest; or, 2) integrated online databases?
- Social Media: does the website support social media integration as well as social media login features for user accounts and prompted Facebook likes?
- Retail Customer Relationship Features: is the website able to create personalized online landing pages that reflect the profiles of returning users (based on cached data); provide a seamless user experience across all computers and mobile devices; offer online chats for user support; provide easy access to reservation details?
Competitive Sales Platform: are there online capabilities which: 1) support ease of transactions across several sales channels; 2) permit rapid changes to service and package elements, including: inventories; capacities, pricing, rules; restrictions, etc.
- Multiple Distribution Channel Support: can the website be configured as a retail selling platform and also for integration with third party distribution channels? Does the system support sales channel transactions, including: generating reservations & travel documents; notification alerts; invoicing and payment management?
- Customized Marketing Offers & Deals: can retail and third party landing pages be easily customized for easily created special deals, last minute offers and early bookings?
- Flexible 3d Party Pricing Definitions: is the existing system able to set different prices for the same product, based on the reseller’s market? Can all third party price components be defined individually, such as: supplier price; tour operator commission; reseller commission and taxes?
- Retail Integrated Payment Gateways: are retail transactions supported by multiple currencies and a wide variety of credit card options via a high performance, encrypted gateway?
Although these capabilities are a reasonable sampling of online capabilities required to compete at a high level, some tour businesses may find them beyond their current goals. Be aware retail customers or resellers typically don’t take vendor limitations into account – they apply high standards to every company who seeks their business.
Of course, the reality is not all tour companies are the same. Some may have unique travel expertise while others have much deeper financial pockets. When financial resources are either limited or pulled in many directions, many operators find the most practical option is to purchase customizable platforms, such AIDA - inventory and distribution software, and TRIP - innovative online content and booking software - both from dcs plus.
Even if money isn’t a limiting factor, this is often the wisest choice because the operator gets highly cost-effective, robust functionality, without violating a fundamental business rule: stay focused on what sets your product and services apart from the competition.