Category Archives: Business

The Use of Smart Tourism Technologies

An excerpt from my latest Working Paper, entitled: The Use of Big Data, Programmatic Advertising and Blockchain Technologies in Tourism

The latest disruptive technologies are supporting the tourism businesses’ marketing mix elements as they improve the interactive engagement with individual prospects, enhance the personalisation of services, whilst providing secure pricing options. Many tourism firms are evolving from their passive, rigid, and product-centric state to a more flexible, dynamic, and customer-centric environment, as they monitor and detect any changes in consumer sentiment. Data-driven companies are increasingly capturing and analysing the online and mobile activity of prospective customers, as they delve into ecommerce and review sites, personal blogs and social media (Sigala, 2017; Kumar et al., 2017). Their analytics captures the consumers’ interactions with brands and companies through digital media. Therefore, big data is enabling them to target and re-target individuals and online communities with instantaneous pricing and access options, across multiple channels (via web-site activity, mobile, video, social media, ecommerce, among others). Large technology giants use mobile tracking technologies, to gather information on the consumer behaviours, including their shopping habits, lifestyle preferences , et cetera (Aksu et al., 2018).

Tech-savvy firms have learnt how to take advantage of on-demand, real-time information from sensors, radio frequency identification and other location tracking devices to better understand their marketing environments at a more granular level (Storey & Song, 2017). This way business could come up with personalised products and services, that are demanded by individual customers (Li et al., 2017). From a business perspective, it is important to acquire this data, quickly, and in high velocities. This paper reported that many businesses are already benefiting of the programmatic advertising environment; where buyers and sellers of digital advertising connect online to exchange available inventory (Busch, 2016; Stevens et al., 2016).

The challenge for tourism businesses is to recognise the value of smart technologies as effective tools that can analyse their marketing environment, including the customers as well as their competitors. The predictive-analytical tools can examine different scenarios; and the prescriptive analytics anticipate what will happen, when it will happen, and explains why it happens. These technologies can monetise data by identifying revenue generating opportunities and cost savings.

Other innovations, including blockchain’s distributed ledger technologies are improving data privacy, as it involves the verification and the secure recording of transactions among an interconnected set of users. Blockchain tracks the ownership of assets before, during, and after any online transaction. Therefore, this technology could be used by tourism businesses to facilitate their transactions with marketplace stakeholders, including suppliers, intermediaries, and consumers across borders. The block chain will probably be more convenient than other payment options, in terms of time and money. Therefore, blockchain’s ledger technology can possibly lead to better customer service levels and operational efficiencies for the tourism businesses.

The smart tourism technologies, including big data analytics are shifting how organisations collect, analyse and utilise and distribute data. A thorough literature review suggests that the crunching of big data analytics is generating meaningful insights and supporting tourism marketers in their decision making. Moreover, other technologies, including the programmatic advertising and blockchain’s distributed ledger system is helping them to improve their financial and strategic performance. In conclusion, this contribution calls for further research on data-driven tourism.

 

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Announcing Emerald’s latest academic textbook, “The Branding of Tourist Destinations”

This authoritative book was edited by Mark Anthony Camilleri. It provides students and practitioners with a good understanding of different tourism products, marketing strategies and tactics on destination branding, as well as useful insights on sustainable and responsible tourism practices, among other topics. The readers are equipped with a strong pedagogical base on the attractiveness of tourist destinations as this publication presents contemporary conceptual discussions and empirical studies on several aspects of destination branding.

 

Tourism marketers, including destination management organizations (DMOs) are formulating strategies and tactics to attract prospective visitors. Hence, this book also sheds light on the latest industry developments in travel, tourism, hospitality and events in different contexts around the world.

Chapter 1 introduces the readers to different aspects of the travel, tourism, hospitality and leisure industries, including; the visitors’ accessibility, accommodation, attractions, activities and amenities. The author explains how tourist destinations are capable of customizing their products to customer segments and individuals, by offering; adventure tourism, business tourism (including meetings, incentives, conferences and events), culinary tourism, cultural (or heritage) tourism, eco-tourism (or sustainable tourism), educational tourism, health (or medical tourism), religious tourism, rural tourism, seaside tourism, sports tourism, urban (or city) tourism, wine tourism, among other niche areas.

Chapter 2 provides an explanation of destination marketing, place branding and their related notions. The authors critically review the conceptual developments on the branding of tourist destinations.

Chapter 3 suggests that destination management organisations ought to engage in fruitful relationships with internal and external stakeholders. The authors maintain that there are several factors that can affect the strategic management of these organisations.

Chapter 4 explores how Sweden is branding its destinations by improving its cultural identify and by providing multi-sensory experiences to its visitors.

Chapter 5 sheds light on the agritourism businesses in Italy’s Campania region. The author analyses the main critical success factors for a thriving rural tourism market.

Chapter 6 explains the key elements of cultural tourism, including the destination’s heritage, lifestyle, and “Made in Italy”. The authors put forward a tourism development model. They suggest that it represents a functional framework for the benefit of tourism practitioners.

Chapter 7 explores the consumer-based brand equity of events. The authors explain how the organization of events, including music festivals could add value to the destinations’ image. They imply that the visitors’ positive experiences and their word-of-mouth publicity can contribute to the destinations’ branding.

Chapter 8 explores the destination branding of Porto in Portugal. The authors analyze the visitors’ attitudes on Porto’s largest wine festival. They assess their visitors’ level of satisfaction with the event and their intention to return.

Chapter 9 identifies the key elements that serve as drivers for the development of oleotourism in Jaen, Spain. The authors suggest that there is scope in stakeholder engagement amongst the main actors and drivers in the sector.

Chapter 10 investigates the environmental behaviour of three-, four- and five-star hotels in Azuay, Ecuador. The authors explored the relationship between environmental responsibility and stakeholder engagement. Their findings suggest that the hotel managers strive in their endeavours to implement responsible environmental practices to avoid regulatory pressures.

Chapter 11 examines the relationship between the destinations’ image and brand equity. The author contends that the tourists’ hedonic and monetary values can have a moderating effect on the country-of-origin’s image and brand extension.

Chapter 12 investigates the relationship between the customers’ satisfaction, commitment, trust and loyalty toward hospitality brands. It develops and empirically test the social identity construct (customer brand identification and other critical social exchange constructs (satisfaction, trust, commitment).

This publication was written by academics for other scholars, researchers, advanced under-graduate and post-graduate students. However, it is also relevant to the industry practitioners, including consultants, senior executives and managers who work for destination management organizations, tourism offices, hotels, inbound / outbound tour operators and travel agents, among others. The book explains all the theory and the empirical studies in a simple and straightforward manner. It describes the various marketing environments that comprise a wide array of economic, socio-cultural and environmental realities.

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Emerald’s must-read textbook for tourism students and practitioners

“Tourism Planning and Destination Marketing” was recently edited by Dr. Mark Anthony Camilleri, Ph.D. (Edinburgh).

This publication is written in an engaging style to entice the curiosity of its readers. It presents all the theory and the empirical studies in a simple and straightforward manner. It reports on the global tourism marketing environments that comprise a wide array of economic, socio-cultural and environmental issues. It also explains how ongoing advances in technology are bringing interesting developments in the tourism industry and its marketing mix.

This authoritative book provides theoretical and empirical insights on different tourism topics, including; destination marketing and branding, sustainable and responsible tourism, tourism technologies, digital marketing, travel distribution and more. It is also relevant to the industry practitioners, including consultants, senior executives and managers who work for destination management organisations, tourism offices, hotels, inbound / outbound tour operators and travel agents, among others.


Preface

The marketing of a destination relies on planning, organisation and the successful execution of strategies and tactics. Therefore, this authoritative book provides students and practitioners with relevant knowledge of tourism planning and destination marketing. The readers of this publication are equipped with a strong pedagogical base as they are presented conceptual discussions as well as empirical studies on different aspects of the travel and tourism industries.

The readers of this book will acquire a good understanding of the tourism marketing environment, destination branding, distribution channels, etourism, as well as relevant details on sustainable and responsible tourism practices, among other topics. They will appreciate that the tourism marketers, including destination management organisations (DMOs) are increasingly using innovative tools, including; digital media and ubiquitous technologies to engage with prospective visitors. Hence, this book also sheds light on contemporary developments in travel, tourism, hospitality, festivals and events.

Chapter 1 introduces the readers to the tourism concept as it describes the travel facilitators and motivators. Afterwards, it explains several aspects of the tourism product, including; the visitors’ accessibility, accommodation, attractions, activities and amenities. It categorises different travel markets; including; adventure tourism, business tourism (including meetings, incentives, conferences and events), culinary tourism, cultural (or heritage) tourism, eco-tourism (or sustainable tourism), educational tourism, health (or medical tourism), religious tourism, rural tourism, seaside tourism, sports tourism, urban (or city) tourism, wine tourism, among other niche areas.

Chapter 2 offers a critical review and analysis of relevant literature on the tourism product’s experiential perspective. The authors suggest that the customers’ experience is affected by cognitive, emotional, relational and sensorial aspects.

Chapter 3 examines Plog’s model of venturesomeness. The author provides a thorough review of 26 studies that have adopted this behavioural model. He maintains that this model could be used to identify the travellers’ psychographic characteristics as he correlates them with the destinations they visit.

Chapter 4 focuses on the coopetition features of tourism destinations. The author held that (competing) tourism service providers, including destination marketing organisations often cooperate to deliver positive customer experiences. In addition, he explained how seasonality and colocation issues can influence specific features of coopetition and collaborative practices in tourism destinations.

Chapter 5 explored the residents’ attitudes towards incoming tourism at Punta del Este, Uruguay. The authors suggest that the respondents were perceiving economic benefits from increased tourism figures. However, the same respondents indicated that they were aware about the socio-cultural costs of tourism.

Chapter 6 appraises the notions of sustainable and responsible tourism. It traces the origins of the concept of sustainable development and includes a critical review of key theoretical underpinnings. The author provides relevant examples of the social, environmental and economic impacts of tourism in vulnerable or sensitive climates.

Chapter 7 investigates the tourists’ experiences of Japan’s Tateyama and Hirakawa rural areas. The author suggests that the tourists’ experience of rural tourism has led them to appreciate the Japanese culture.

Chapter 8 sheds light on the eco-tourism concept. Following a thorough literature review, the authors imply that the service providers ought to identify their visitors’ motivation for eco-tourism destinations.

Chapter 9 clarifies how emerging technologies, including; augmented reality (AR) and virtual reality (VR) are being used in the travel and tourism industries. The authors introduce the readers to the term, “phygital” as they argue that the tourists are seeking physical and virtual experiences. They suggest that AR and VR have the power to blend together the individuals’ perception of real and virtual spaces.

Chapter 10 explains the importance of organising events for destination marketing. The authors suggest that festivals and events can create a positive image of a destination. The destinations’ ongoing activities may lead to economic benefits to tourism operators as well as to the community, at large.

Chapter 11 posits that the destinations marketers ought to formulate their strategies prior to the planning and organising of events. The author contends that the effective management of events relies on stakeholder engagement, attracting sponsorships and the use of interactive media.

Chapter 12 describes Smart Tourism Local Service Systems (S-TLSS) that are intended to facilitate the engagement among various stakeholders. The authors suggest that S-TLSS supports the tourism planning and destination marketing in Caserta, Italy.

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The political environment of marketing

 

This is excerpt from: Camilleri, M.A. (2018). Travel Marketing, Tourism Economics and the Airline Product, Springer, Milan, Italy. ISBN 978-3-319-49849-2


To be successful, companies must adapt to ongoing trends and developments in their macro and micro environments. Therefore, it is in the interest of organisations to scan their marketing environment to deal with any possible threats from the market and to capitalise on any available opportunities. This chapter explains the external environmental factors, including; political, economic, social and technological influences. It also considers the internal environmental factors, including; capital structures, resources, capabilities and marketing intermediaries; as it identifies competitive forces from differentiated or low-cost service providers.

A sound knowledge of the customer requirements is an essential ingredient for a successful business. For this reason, companies should consistently monitor their marketing environment. The marketing environment is continuously changing, as it consists of a number of unpredictable forces which surround the company.

The regulatory and competitive conditions as well as other market forces, including; political, economic, social and technological forces, could affect the organisational performance of the tourism businesses. Hence, this chapter will look into some of these issues. The tourism industry is highly influenced by economic factors, including; strong exchange rate fluctuations, the price of oil and other commodities, among other matters. Moreover, social factors including global concerns about safety and security could influence tourist behaviours. Notwithstanding, the regulatory environments will also have an impact on tourism and airline businesses. For instance, the airline industry’s deregulation and liberalisation has created numerous opportunities for many airlines, including low-cost carriers. At the same time, it has threatened inefficient airlines who have been protected by regulation.

Competition is a vitally important element in the marketing environment and it should not be under-estimated. The businesses competitors comprise suppliers of substitute products. They may be new entrants in the marketplace. Alternatively, they may include customers and suppliers who were stakeholders of the business. In this light, tourism marketers should be knowledgeable of different business models as competition can take different forms, like for example, differentiated, full-service companies or low-cost service providers. For these reasons, organisations should have effective mechanisms to monitor the latest developments in the marketing environment.

Environmental Scanning

Environmental scanning entails the collection of information relating to the various forces within the marketing environment. This involves the observation and examination of primary and secondary sources of information, including online content from business, trade, media and the government, among others. The environmental analysis is the process of assessing and interpreting the information gathered. An ongoing analysis of the gathered data may be carried out by marketing managers or by researchers who have been commissioned to conduct market research (as explained in the previous chapter). Through analysis, marketing managers can attempt to identify extant environmental patterns and could even predict future trends. By evaluating trends and tendencies, the marketing managers should be able to determine possible threats and opportunities that are associated with environmental fluctuations. When discussing the ‘marketing environment’ we must consider both the external environment (i.e. the macro-environment) as well as the internal environment (i.e. the micro-environment) (Kotler, Armstrong, Frank & Bunn, 1990).

The Macro Environment

The tourism businesses must constantly assess the marketing environment. It is crucial for their survival and achievement of their long-term economic goals. Therefore, marketing managers must engage in environmental scanning and analysis. Most firms are comfortable assessing the political climates in their home countries. However, the evaluation of political climates in foreign territories is far more problematic for them. Experienced international businesses engage in political risk assessment, as they need to carry out ongoing systematic analyses of the political risks they face in foreign countries. Political risks are any changes in the political environment that may adversely affect the value of any firm’s business activities. Most political risks may result from governmental actions, such as; the passage of laws that expropriate private property, an increase in operating costs, the devaluation of the currency or constraints in the repatriation of funds, among others. Political risks may also arise from non-governmental actions when there is criminality (for example: kidnappings, extortion and acts of terrorism, et cetera). Political risks may equally affect all firms or may have an impact on particular sectors, as featured hereunder. Non-governmental political risks should also be considered. For example, Disneyland Paris and McDonalds have been the target of numerous symbolic protests  who view them as a convenient target for venting their unhappiness with US international agricultural policies. In some instances, protests could turn violent, and may even force firms to shut down their operations, in particular contexts.

Typical Examples of Political Risks

Type                                                   Impact on Firms
Expropriation Loss of future profits.
Confiscation Loss of assets, loss of profits.
Campaigns against businesses Loss of sales; increased costs of public relation; efforts to improve public image.
Mandatory labour benefits legislation Increased operating costs.
Kidnappings, terrorist threats and other forms of violence Increased security costs; increased managerial costs; lower productivity.
Civil wars Destruction of property; lost sales; increased security costs.
Inflation Higher operating costs.
Repatriation Inability to transfer funds freely.
Currency devaluations Reduced value of repatriated earnings.
Increased taxation Lower after-tax profits.

 

References:

Camilleri, M. A. (2018). The Marketing Environment. In Travel Marketing, Tourism Economics and the Airline Product (pp. 51-68). Springer, Cham, Switzerland.

Kotler, P., Armstrong, G., Franke, G., & Bunn, M.D. (1990). Marketing: An Introduction, Vol. 1. New Jersey: Prentice Hall.

 

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Corporate Sustainability and Responsibility: Creating Value for Business, Society and the Environment

 

 

 

This an excerpt from my latest open-access paper in Springer’s Asian Journal of Sustainability and Social Responsibility.

This review paper has built on the previous theoretical underpinnings of the corporate social responsibility agenda including Stakeholder Management, Corporate Citizenship and Creating Shared Value as it presents the latest Corporate Sustainability and Responsibility perspective. This value-based model reconciles strategic CSR and environmental management with a stakeholder approach to bring long term corporate sustainability, in terms of economic performance for the business, as well as corporate responsibility’s social outcomes.

Recently, some international conferences including Humboldt University’s gatherings in 2014 and 2016 have also raised awareness on this proposition. The corporate sustainability and responsibility concept is linked to improvements to the companies’ internal processes including environmental management, human resource management, operations management and marketing (i.e. Corporate Sustainability). At the same time, it raises awareness on the businesses’ responsible behaviours (i.e. Corporate Responsibility) toward stakeholders including the government, suppliers, customers and the community, among others. The fundamental motivation behind this approach is the view that creating connections between stakeholders in the value chain will open-up unseen opportunities for the competitive advantage of responsible businesses, as illustrated in Table 2. Corporate sustainability and responsibility focuses on exploiting opportunities that reconcile differing stakeholder demands as many corporations out there are investing in corporate sustainability and responsible business practices (Lozano 2015). Their active engagement with multiple stakeholders (both internal and external stakeholders) will ultimately create synergistic value for all (Camilleri 2017).

 

Multinational organisations are under increased pressures from stakeholders (particularly customers and consumer associations) to revisit their numerous processes in their value chain activities. Each stage of the company’s production process, from the supply chain to the transformation of resources could add value to their businesses’ operational costs as they produce end-products. However, the businesses are always expected to be responsible in their internal processes toward their employees or toward their suppliers’ labour force. Therefore, this corporate sustainability and responsibility perspective demands that businesses create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility. In sum, corporate sustainability and responsibility may only happen when companies demonstrate their genuine willingness to add corporate responsible dimensions and stakeholder engagement to their value propositions. This occurs when businesses opt for responsible managerial practices that are integral to their overall corporate strategy. These strategic behaviours create opportunities for them to improve the well-being of stakeholders as they reduce negative externalities on the environment. The negative externalities can be eliminated by developing integrated approaches that are driven by ethical and sustainability principles. Very often, multinational businesses are in a position to mitigate risk and to avoid inconveniences to third parties. For instance, major accidents including BP’s Deep Horizon oil spill in 2010, or the collapse of Primark’s Rana Plaza factory in Bangladesh, back in 2013, could have been prevented if the big businesses were responsible beforehand.

In conclusion, the corporate sustainability and responsibility construct is about embedding sustainability and responsibility by seeking out and connecting with the stakeholders’ varied interests. As firms reap profits and grow, there is a possibility that they generate virtuous circles of positive multiplier effects (Camilleri 2017). Therefore, corporate sustainability and responsibility can be considered as strategic in its intents and purposes. Indeed, the businesses are capable of being socially and environmentally responsible ‘citizens’ as they are doing well, economically. This theoretical paper has contributed to academic knowledge as it explained the foundations for corporate sustainability and responsibility. Although this concept is still evolving, the debate among academic commentators is slowly but surely raising awareness that are needed to deliver strategic results that create value for businesses, society and the environment.

References

Camilleri MA (2017) Corporate sustainability, social responsibility and environmental management: an introduction to theory and practice with case studies. Springer, Heidelberg, Germany

Lozano R (2015) A holistic perspective on corporate sustainability drivers. Corp Soc Responsib Environ Manag 22(1): 32-44.

 

How to Cite: Camilleri, M.A. (2017) Corporate Sustainability and Responsibility: Creating Value for Business, Society and the Environment. Asian Journal of Sustainability and Social Responsibility. 1-16. DOI: 10.1186/s41180-017-0016-5

 

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Travel Search Engines and Price Comparison Websites

search

Many search engines are increasingly offering advantageous deals on travel products. Very often, they may have user-friendly websites that help individual consumers search for the best prices. For example, a flight search may include one-way, return or multiple destinations. The travellers may specify whether they would like to travel in a particular class of service (for example, economy, business or first class). Travellers may also opt for direct services (which are usually more expensive), and their search can be narrowed down according to their preferred departure and arrival times (if any).

In addition, many search engines identify their “best flight” option. Their algorithm will usually base their decision on layover time, the length of flight, and departure/arrivals times. They may also let you know if there are cheaper flights available, particularly if there are nearby airports.

Price Alerts: The search engines will enable their users to set a price alert on tourism products. For example, after the users have given details on the travel dates and their email address, they will receive regular emails which will communicate whether the price for the flight (that was searched through the search engines’ system) has gone up or down in price.

Travel alerts are convenient for those passengers who are planning their itineraries in advance. Online prospects will be updated on the best time to purchase their flight (in this case).

Flight Deal Websites: Online prospects can find good flight deals by following niche websites that are dedicated to posting such deals. Most of these websites may not necessarily be affiliated with any airline. Very often, consumers may check these websites on a regular basis. Alternatively, they may follow travel and tourism groups through social media.

Flexibility: An inexpensive flight may not always be the right flight for passengers. The prospective customers may demand flexible dates. For instance, they may want to avoid unnecessary overnight stays in random cities (a hotel accommodation may well increase the cost of the travellers’ journey). Moreover, there are other important considerations. For example, customers may not be willing to travel to distant airports. They may not like to travel at night, et cetera.

The best flight deals may not last long as search engines may frequently change their flight prices.

Bonus Tip: Many low-cost carriers may not feature all costs in their prices. These “hidden” costs may comprise carry-on baggage fees, checked-baggage charges and seat fees. Customers should check these fees and charges before purchasing a flight with any airline. Such “hidden” costs and expenses are usually disclosed on the airlines’ respective websites. In many cases these supplementary fees can be paid in advance. If customers would not pay in anticipation of their flight, they may easily incur additional charges.

Therefore, the overall best deal should be determined according to flight times, hidden costs, and personal airline preferences.

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Key Elements of Travel Websites

website

The travel and tourism businesses are increasingly using corporate websites as they help them improve consumer leads and sales conversions. In addition, their clear, differentiated pricing information on service-tiers provide product options to online prospects. The tourism products ought to focus on the benefits they provide, by highlighting their value propositions; rather than simply illustrating their features. Despite the fact that so many transactions are carried out online, the travel websites could lack in their provision of personal interaction. This means that even the smallest thing that’s out of place on the ecommerce pages could possibly rapidly erode the customers’ trust in products and services. Therefore, tourism businesses could build consumer confidence and trust by using an SSL certificate to make transactions secure, particularly if they are processing credit cards.

The travel businesses’ corporate websites are expected to articulate their terms and conditions, including any relevant cancellation and refund policies. They should also feature their contact details (including an address, telephone and emails) to customers and prospects. Many sites could offer live chat facilities on their site, to help online customers in their queries, or to address their concerns.

If the businesses do not offer such interactions in real time, they still need acknowledge their online prospects’ message(s), and inform them that they will be responding to them in reasonable time. Moreover, the use of testimonials from consumers, including; reviews and ratings will serve as proof that the tourism business is providing an adequate level of service to customers. The positive experiences from customers themselves, will help to improve conversions and sales.

The tourism web sites should underline the true benefits of their product. Hence, they should present relevant written content which will make the product stand out from the rest. In this day and age, attractive web sites should be well-designed to entertain visitors. The travel sites have to feature a good selection of images and videos. This allows prospective visitors to become familiar with the tourism product. Destination management organisations are increasingly allowing online visitors to zoom in high-res images and video clips in their websites. The interactive images and videos should load as quickly as possible. Any delays of even a couple of seconds would turn off dissatisfied visitors. The speed with which a page loads can be a critical determining factor as to whether visitors may (or may not) commit themselves to lay down their credit card. When designing product pages, it is important to consider load speeds, particularly if there are large images, rich interactivity or other media in web pages.

Very often, different product pages may clutter up web pages with excessive calls to action. These pages may contain customer photos, complicated pricing options, unnecessary details on customer support, too many reviews, et cetera. Without good web designs, these calls to action could easily blend into a confusing mess.  While it may be tempting to utilise web pages with many actionable steps, the online sites should be as clear and focused as possible. A good call to action could include high-contrast buttons, call-outs and actionable elements which leave plenty of breathing room, to make them stand out.

Online users might not be willing to commit themselves in buying products straight away. Therefore, businesses could entice visitors to fill in their subscriber list to receive exclusive offers, via email.  This way, the businesses will be in a position to send newsletters and promotional material to their online prospects, at a later date.

Businesses ought to facilitate their online purchase and transaction confirmation. A complicated funnel could deter the conversion of prospects. The customers who are in the businesses’ checkout page(s) should be allowed to finalise their purchase as quickly and efficiently as possible. If their customer experience of their online purchase involves an unnecessary effort to check out from the website; they may have second thoughts on the businesses’ quality of service. Therefore, users should not be distracted with anything that will take them away from the businesses’ purchasing funnel. It is important to let customers finish their transaction before taking them anywhere else on the website.

This article was drawn from Springer’s ‘Travel Marketing, Tourism Economics and the Airline Product: An Introduction to Theory and Practice‘ by Mark Anthony Camilleri

 

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Tourism and Technology: What the future holds for travel distribution?

mobile.pngThe development of digital media technologies, particularly the internet and social media are offering a wide range of possibilities to the travel industry. These latest technological advances have enabled many travel businesses, including airlines and hotels to manage their distribution channels in a more efficient and economical way.

With the changing landscape of travel e-commerce and the ubiquity of IT solutions which gather, store, and analyse data in a variety of ways; airlines have improved their ability to monitor their performance across channels. Very often, they are in a position to quickly adjust offers. Their prices are usually based on a variety of situations and circumstances, as they optimise communications and transactions.

By using big data and analytics on their customer behaviours, many travel businesses are taking advantage of channel-based distribution. Hence, the distribution networks have come a long way from the ticket counter. Evidently, travel and tourism businesses are leveraging themselves with data-driven marketing, as they seek new customers and prospects. For example, they may increase their profitability from high-yield customers as they are using elaborated pricing and revenue management systems. The travel distribution is evolving from its current passive, rigid, and technology-centric state to a more flexible, dynamic, and passenger-centric environment which we call ‘Active Distribution’.

Any changes in the tourism distributive systems may be stimulated by external macro factors such as politics and trade, global and national economies, technological innovations and access to them, et cetera. The airline industry could also be effected by increased competition from low-cost carriers, merger and acquisitions, and fuel costs, among other issues. However, the commercial future of the tourism industry may also be influenced by other factors, including travel distribution.

Tourism businesses can possibly become even more effective in how they sell their products and services, particularly if they deliver positive customer experiences. Tourists perceive value in customer-centric businesses. Most probably, in future, there will be significant improvements in terms of technologically enhanced customer services.

Tomorrow’s businesses will be serving passengers from geographically-diverse regions.  There will be more travellers from emerging markets and developing economies. The travel distribution systems will have to cater for senior citizens, as there are aging populations in many countries.

The distributive channels must be designed to accommodate a divergent nature of users. Tourism service providers and their intermediaries have to provide engaging, intuitive shopping experiences that tap into the traveller’s discretionary purchases.

The businesses will need to embrace new technologies and flexible distribution processes, as outmoded distribution components will be replaced. It is envisaged that the distributive systems will be increasingly relying on mobile devices as these technologies enable consumer interaction with speech and voice recognition software.

The tourism businesses will leverage themselves with artificial intelligence which could facilitate dynamic pricing as well as personalisation of services.

The distributive  systems could interface with virtual  reality software to help businesses merchandise their products in captivating customer experiences.

The third-party retailers will continue to form part of the distribution mix. However, many service providers will be using their direct channels to reach their targeted customers.

There will probably be fewer market intermediaries and online travel agencies will see significant declines.

It is very likely, that airlines will not have to pre-file volumes of defined fares through third-parties as they may not rely on inventory buckets to manage their selling capacity. The airlines must recognise the need to invest in new internal selling systems. Today’s passenger service systems lack the flexibility that airlines require. They are not adequate enough to serve  the airlines’ flexible and dynamic sales environments. These systems could be replaced with modular retailing platforms. Full Retailing Platforms (FRPs) will allows airlines to take back the control they require to be better retailers through any distribution channel (IATA, 2016).

However, Google, the multinational technology company, could be playing a much larger role in travel distribution. The technology giant could participate in, and possibly disrupt the tourism industry if it becomes an online travel agency. whether through acquisition or by launching a product of its own. In fact, its travel product, Google Flights is increasing in popularity among travellers.

Moreover, there have been recent developments in online payment facilities. Undoubtedly, there will further improvements in this area, as well. Payment providers like M-Pesa, Alipay, and PayPal will probably become more important.

In the foreseeable future, the travel marketplace will surely introduce new technologies and capabilities as multiple venture capital firms are increasingly investing in disruptive innovation.

There may be new businesses which could penetrate the market, including private air service operators who could provide “on-demand” airline services; alternatively, technology companies could develop or acquire their meta-search engines or online travel agencies.

Undoubtedly, the travel and tourism businesses need to find ways that intentionally overturn decades of outdated, distribution practices. The distribution community can choose to innovate and disrupt, or allow others to be leading innovators.

 

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Integrated Reporting: Valuing the Financial, Social and Natural Capital

The end of year financial statements usually focus on financial capital, whereas organisational performance relies on resources – such as the expertise of people, intellectual property that was developed through research and development, and interactions with the environment and the societies in which they operate.  In this light, Integrated Reporting (<IR>) was developed to fill such reporting gaps. The IR Framework categorises different stocks of value, including; Financial Capital; Manufactured Capital; Intellectual Capital; Human Capital; Social (and Relationship) Capital; as well as Natural Capital.

 

 

The International Integrated Reporting Council (IIRC) has promoted the concept of integrated thinking and reporting. In 2013, the International Integrated Reporting Council (IIRC) released a framework for integrated reporting. By doing so, IIRC has paved the way for the next generation of annual reports that enable stakeholders to make a more informed assessment of the organisation’s strategy, governance, performance and prospects. IIRC has aligned capital allocations and corporate behaviours with the wider goals of financial stability and  sustainable development. Its framework established the following ‘Guiding Principles’ and ‘Content Elements’:

Guiding Principles

  1. Strategic focus and future orientation –gives an insight of the organisation’s strategy;
  2. Connectivity of information – provides a holistic picture of the combination, inter relatedness and dependencies between the factors that affect the organisation’s ability to create value over time;
  3. Stakeholder relationships – describes the nature and quality of the organisation’s relationships with its key stakeholders;
  4. Materiality – discloses relevant information about matters that substantively affect the organisation’s ability to create value over the short, medium and long term;
  5. Conciseness – provides sufficient context to understand the organisation’s strategy, governance and prospects without being burdened by less relevant information;
  6. Reliability and completeness – includes all material matters, both positive and negative, in a balanced way and without material error;
  7. Consistency and comparability – ensures consistency over time and enabling comparisons with other organisations to the extent material to the organisation’s own ability to create value.

Content Elements

  1. Organisational overview and external environment – What does the organisation do and what are the circumstances under which it operates?
  2. Governance – How does an organisation’s governance structure support its ability to create value in the short, medium and long term?
  3. Business model – What is the organisation’s business model?
  4. Risks and opportunities – What are the specific risk and opportunities that affect the organisation’s ability to create value over the short, medium and long term, and how is the organisation dealing with them?
  5. Strategy and resource allocation – Where does the organisation want to go and how does it intend to get there?
  6. Performance – To what extent has the organisation achieved its strategic objectives for the period and what are its outcomes in terms of effects on the capitals?
  7. Outlook – What challenges and uncertainties is the organisation likely to encounter in pursuing its strategy, and what are the potential implications for its business model and future performance?
  8. Basis of preparation and presentation – How does the organization determine what matters to include in the integrated report and how are such matters quantified or evaluated?

The ‘Guiding Principles’ underpin the preparation of an integrated report, whilst, the ‘Content Elements’ are the key categories of information that should be included in an integrated report according to the IR Framework. There are no bench marking for the above matters and the report is primarily aimed at the private sector; but IR could be adapted to the public sector and to not-for-profit organisations. The IIRC has set out a principle-based framework rather than specifying a detailed disclosure and measurement standard. This way each company sets out its own report rather than adopting a checklist approach. Hence, the report acts as a platform which explains what creates value to the business and how management protects this value. This gives the report more business impetus rather than mandating compliance-led approaches.

For the time being, the integrated reporting is not going to replace other forms of reporting but the vision is that large undertakings, including corporations, state-owned entities and government agencies, among others, may be expected to pull together relevant information already produced to explain the key drivers of their non-financial performance. Relevant information will only be included in the report where it is material to the stakeholder’s assessment of the business. The term ‘materiality’ suggests that there are legal connotations that may be related to environmental, social and governance (ESG) reporting, Yet, some entities out of their own volition are already including ESG information in their integrated report.

In sum, the integrated reports aim to provide an insight into the company’s resources, relationships (that are also known as the capitals) and on how the company interacts with its external environment to create value.

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A Conceptual Model of Corporate Sustainability and Responsibility

The corporate sustainability and responsibility concept is linked to improvements to the companies’ internal processes, including; environmental management, human resource management, operations management and marketing (Porter & Kramer, 2011; Fombrun, 2005; Maignan & Ferrell, 2004). At the same time, it raises awareness on the businesses’ responsible behaviours toward stakeholders, including the government, suppliers, customers and the community, among others (Carroll & Shabana, 2010; Freeman, 1984). The fundamental motivation behind this approach is the view that creating connections between stakeholders in the value chain will open-up unseen opportunities for the competitive advantage of responsible businesses, as illustrated here:

(Camilleri, 2017a)

Corporate sustainability and responsibility focuses on exploiting opportunities that reconcile differing stakeholder demands as many corporations out there are investing in corporate sustainability and responsible business practices (Camilleri , 2017b). Their active engagement with multiple stakeholders (both internal and external stakeholders) will ultimately create synergistic value for all (Camilleri, 2017a).

Multinational organizations are under increased pressures from stakeholders (particularly customers and consumer associations) to revisit their numerous processes in their value chain activities. Each stage of the company’s production process, from the supply chain to the transformation of resources could add value to their businesses’ operational costs as they produce end-products. However, the businesses are always expected to be responsible in their internal processes, toward their employees or toward their suppliers’ labour force. Therefore, this corporate sustainability and responsibility perspective demands that businesses create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility. In sum, corporate sustainability and responsibility may only happen when companies demonstrate their genuine willingness to add corporate responsible dimensions and stakeholder engagement to their value propositions. This occurs when businesses opt for responsible managerial practices that are integral to their overall corporate strategy. These strategic behaviours create opportunities for them to improve the well-being of stakeholders as they reduce negative externalities on the environment.  The negative externalities can be eliminated by developing integrated approaches that are driven by ethical and sustainability principles. Very often, multinational businesses are in a position to mitigate risk and to avoid inconveniences to third parties. For instance, major accidents including BP’s Deep Horizon oil spill in 2010; or the collapse of Primark’s Rana Plaza factory in Bangladesh, back in 2013 could have been prevented if the big businesses were responsible beforehand.

In conclusion, the corporate sustainability and responsibility construct is about embedding sustainability and responsibility by seeking out and connecting with the stakeholders’ varied interests. As firms reap profits and grow, there is a possibility that they generate virtuous circles of positive multiplier effects (Camilleri, 2017a). Therefore, corporate sustainability and responsibility can be considered as strategic in its intents and purposes. Indeed, the businesses are capable of being socially and environmentally responsible ‘citizens’ as they are doing well, economically. This contribution explains the foundations for corporate sustainability and responsibility. Although this concept is still evolving; the debate among academic commentators is slowly but surely raising awareness on responsible managerial practices and on the skills and competences that are needed to deliver strategic results that create value for businesses, society and the environment.

References:

Camilleri, M.A. (2017a) Corporate Sustainability, Social Responsibility and Environmental Management: An Introduction to Theory and Practice with Case Studies. Springer, Heidelberg, Germany. http://www.springer.com/us/book/9783319468488

Camilleri, M.A. (Ed.) (2017b) CSR 2.0 and the New Era of Corporate Citizenship. IGI Global, Hershey, USA. ISBN13: 9781522518426 DOI: 10.4018/978-1-5225-1842-6 http://www.igi-global.com/book/csr-new-era-corporate-citizenship/166426

Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews, 12(1), 85-105.

Fombrun, C. J. (2005). A world of reputation research, analysis and thinking—building corporate reputation through CSR initiatives: evolving standards. Corporate Reputation Review, 8(1), 7-12.

Freeman, R.E. (1984). Strategic Management: A stakeholder approach. Pitman, Boston, MA. USA.

Maignan, I., & Ferrell, O. C. (2004). Corporate social responsibility and marketing: An integrative framework. Journal of the Academy of Marketing science, 32(1), 3-19.

Porter, M. E. & Kramer, M. R., (2011). Creating shared value. Harvard business review, 89 (1/2), 62-77.

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Filed under Business, Corporate Social Responsibility, Corporate Sustainability and Responsibility, CSR, Human Resources, Marketing, Shared Value, Stakeholder Engagement, sustainable development