Tag Archives: Travel

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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Filed under Business, destination marketing, digital media, Hospitality, Marketing, tourism, Travel

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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Filed under Airlines, Business, Corporate Social Responsibility, destination marketing, digital media, responsible tourism, SMEs, Stakeholder Engagement, Sustainability, tourism, Travel

My Latest Edited Book on Destination Marketing

An Excerpt from the Preface of “Strategic Perspectives in Destination Marketing” (forthcoming):

The marketing of a destination relies on planning, organization 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 are equipped with a strong pedagogical base on the socio-economic, environmental and technological impacts on the attractiveness of tourist destinations. At the same time, this publication presents contemporary 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 marketing and branding, pricing of tourism products, tourism distribution channels, etourism, as well as on sustainable and responsible tourism practices, and among other topics. They will appreciate that the tourism marketers, including destination management organizations (DMOs) are increasingly using innovative tools, including; digital media and ubiquitous technologies to engage with prospective visitors. Hence, this book also sheds light on the latest industry developments in travel, tourism, hospitality 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 categorizes 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 examines how foreign tourist intermediaries perceive Portugal as a tourist destination. It analyzes the promotional information that they use to attract visitors to this Southern European destination. This contribution recognizes that the tour operators have an important role in intermediating the relationship between the tourists and the tourism service providers. The authors suggest that tourism relies on the destination’s image that is often being portrayed by the foreign tourism intermediaries.

Chapter 3 explores the cruising consumers’ behaviors and their decision-making processes. The authors maintain that the destination, the social life on board as well as the cruise features are very important factors for consumer loyalty. In conclusion, they recommend that cruise lines should create synergies with local institutions in tourist destinations.

Chapter 4 investigates the Spanish inhabitants’ opinions on the tourism industry’s seasonality issues. The findings suggest that the local residents who live in the coastal destinations were in favor of having tourism activity throughout the year; as opposed to other host communities from urban and rural destinations (in Spain) who indicated that they would enjoy a break from tourist activity during the low / off peak seasons.

Chapter 5 provides a critical review about the pricing and revenue management strategies that are increasingly being adopted within the tourism and hospitality contexts. The authors introduce the readers to the concept of “rate fencing”. This proposition suggests that businesses ought to differentiate among various customer segments, as they should attract and develop relationships with the most profitable ones.

Chapter 6 appraises the use of qualitative reviews and quantitative ratings in interactive media. The authors also engage in a discussion on the content analysis of the online users’ generated content (UGC). They posit that it is in the interest of tourism and hospitality businesses to respond to positive and negative word of mouth publicity in reasonable time, as they may have to deal with fake and unverified reviews.

Chapter 7 clarifies how online travel businesses, including; AirTickets, AirBnB and TripAdvisor among others, are continuously investing in their communication technologies and infrastructures to improve their online users’ experience. The author contends that innovative technologies, such as recommender systems and control frameworks are supporting the travel businesses’ in their customer-centric approaches.

Chapter 8 discusses about the concept of the brand identity of destinations from the suppliers’ perspective. The author puts forward a case study on the city of Porto, in Portugal. She explicates how this tourist destination has used an authenticity-based approach to leverage itself as a distinct brand identity among other destinations.

Chapter 9 proposes an ambitious plan to attract visitors to Buxton, Derbyshire. Firstly, the authors focus on the marketing endeavors of a local renovated hotel. Secondly, they provide relevant examples of how other wellness and spa towns in Britain, including; Bath and Harrogate are organizing events and festivals to attract international tourists throughout the year.

Chapter 10 explains how a perceived (positive) image can provide a sustainable competitive advantage to tourism destinations. The authors argue that the historical events as well as other socio-political factors can possibly affect the visitors’ (pre-)conceptions of the Gallipoli peninsula in Turkey. However, they imply that the tourists’ positive experiences could translate to positive publicity for this destination.

Chapter 11 elucidates the notion of destination branding in the rural context. The author maintains that there are both opportunities and challenges for tourism policy makers to preserve the traditional farms and rural dwellings, in order to safeguard their distinct identity. He posits that the rural environment can add value to the tourist destinations and their branding.

Chapter 12 posits that today’s tour operators are highly driven by technology as prospective travelers are searching for online information about their destinations prior to their visits. The authors describe the digital marketing strategies and tactics that are used to promote Malawi, in Africa. They suggest that the inbound tour operators are increasingly using relevant content marketing through interactive technologies and social media to engage with prospective visitors.

Chapter 13 evaluates potential strategies that could be used to develop the tourism product in Adiyaman, Turkey. The authors identify the core responsibilities of the tourism stakeholders and put forward their key recommendations for the branding of this rural destination.

In sum, this authoritative publication is written in an engaging style that entices the curiosity of prospective readers. It explains all the theory in a simple and straightforward manner. This book reports on the global tourism marketing environments that comprise a wide array of economic, socio-cultural and environmental issues. It explains how technological advances have brought significant changes to the tourism industry and its marketing mix.

This book was written by academics for other scholars, researchers, advanced under-graduate and post-graduate students; as it provides a thorough literature review 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 organizations, tourism offices, hotels, inbound / outbound tour operators and travel agents, among others.

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Filed under destination marketing, digital media, Marketing, tourism, Travel

Tourism Futures: Targeting Customers in the Digital Age

This is an excerpt from: Camilleri’s latest book on Travel Marketing (2018)

How to Cite: Camilleri, M. A. (2018). Market Segmentation, Targeting and Positioning. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 4, pp. 69-83). Springer, Cham, Switzerland.

The advances in technology have enabled many businesses to reach their potential customers by using digital and mobile applications.

Google, Facebook, Ebay and Amazon, among others are dominating digital marketing; and are pushing the entire field of advertising to new levels. The use of personal info, web-browsing, search history, geographic location, apps and eCommerce transactions have gone mainstream. For example, Google has begun using transaction records to prove that its ads are working, and are pushing people to make more online purchases. This allowed the technology giant to determine the effectiveness of its digital ad campaigns and to verify their conversion rates.

All individuals leave a “digital trail” of data as they move about in the virtual and physical worlds. This phenomenon is called, “data exhaust”. Initially, this term that was used to describe how Amazon.com has used predictive analytics as it suggested items to its customers. However, pre­dictive analytics cannot determine when and why individuals may decide to change their habitual behaviours, as the possibility of “one off” events must never be discounted. Yet, a firm with sufficient scarce resources could be in a position to exploit big data and analytics to improve its businesses operations.

For instance, Deloitte Consulting have developed a mobile app that has enabled Delta Airlines’ executives to quickly query their operations. For instance, when users touch an airport on a map, the system brings up additional data at their disposal. Executives could also drill further down to obtain granular information on staffing requirements. and customer service levels, as they identify and predict problems in their airline operations.

Nevertheless, business intelligence and predictive analytics could possibly raise a number of concerns. Many customers may be wary of giving their data to the businesses and their stakeholders. Very often, the technological advances anticipate legislation, and its deployment. These contingent issues could advance economic and privacy concerns that regulators will find themselves hard-pressed to ignore. Some academics argue that the digital market and its manipulation may be pushing the limits of consumer protection law. Evidently, society has built up a set of rules that are aimed to protect personal information. Another contentious issue is figuring out the value of data and its worth in monetary terms. In the past, companies could have struggled to determine the value of their business; including patents, trade secrets and other intellectual property.

Targeted Segmentation through Mobile Devices

The mobile is an effective channel to reach out to many users. Portable devices, including smart phones and tablets are surely increasing the productivities and efficiencies of individuals as well as organisations. This has led to the growth of mobile applications (apps). As a result, the market for advertising on mobile is still escalating at a fast pace. Moreover, there are niche areas as new applications are being developed for many purposes on different mobile platforms.

Recent advances in mobile communication and geo-positioning technologies have presented marketers with a new way how to target consumers. Location-targeted mobile advertising involves the provision of ad messages to mobile data subscribers. This digital technology allows marketers to deliver native ads and coupons that are customised to individual consumers’ tastes, geographic location and the time of day. Given the ubiquity of mobile devices, location-targeted mobile advertising are increasingly offering tremendous marketing benefits.

In addition, many businesses are commonly utilising applications, including browser cookies that track consumers through their mobile devices, as they move out and about. Very often, when internet users leave the sites they visited, the products or services they viewed will be shown to them again in retargeted advertisements, across different websites. Several companies are using browsing session data combined with the consumers’ purchase history to deliver “suitable” items that consumers like. There are also tourism businesses who are personalising their offerings as they collect, classify and use large data volumes on the consumers’ behaviours. As more consumers carry smartphones with them, they may be easily targeted with compelling offers that instantaneously pop-up on their mobile screens.

Furthermore, consumers are continuously using social networks which are indicating their geo-location, as they use mobile apps. This same data can be used to identify where people tend to gather. This information is valuable to brands as they seek to improve their consumer engagement and marketing efforts. Therefore, businesses are using mobile devices and networks to capture important consumer data. For instance, smart phones and tablets interact with networks and convey information on their users’ digital behaviours and physical movements to network providers and ISPs. These devices have become interactive through the proliferation of technologies, including; near-field communication (NFC). Basically, embedded chips in the customers’ mobile phones are exchanging data with the retailers’ items possessing such NFC tags. The latest iPhone, Android and Microsoft smartphones have already incorporated NFC ca­pabilities. The growth of such data-driven, digital technologies is surely adding value to the customer-centric marketing. The latest developments in analytics are enabling businesses to provide a deeper personalisation of content as they use socio-demographic and geo-data that new mobile technologies are capable of gathering.

For example, mobile service companies are partnering with local cinemas, in response to the location-targeted mobile advertising; as cinema-goers may inquire about movie information, and could book tickets, and select their seats through their mobile app. These consumers who are physically situated within a given geographic proximity of the participating cinemas may receive location-targeted mobile ads. The cinemas’ ads will inform prospects what movies they are playing and could explain how to purchase tickets through their smart phone. The consumers may also call the cinemas’ hotlines to get more information from a customer service representative. Besides location-targeted advertising, the mobile companies can also promote movie ticket sales via mobile ads that are targeted to individuals, according to their behaviour (not by location). Therefore, companies may direct their mobile-ad messages to those consumers who had previously responded to previous mobile ads (and to others who had already purchased movie tickets, in the past months). Moreover, the cinema companies can also promote movies via Facebook Messenger Ads if they logged in the companies’ websites, via their Facebook account. Mobile users may also receive instant message ads via pop-up windows whenever they log into the corporate site of their service provider.

It is envisaged that such data points will only increase in the foreseeable future, as the multi-billion dollar advertising monopolies are being built on big data and analytics that are helping businesses personalise immersive ads as they target individual customers. The use of credit card transactions is also complementing geo-targeting and Google Maps, with ads; as the physical purchases are increasingly demanding personalisation, fulfillment and convenience. There may be consumers and employees alike who out of their own volition, are willing to give up their data for value. Therefore, the businesses need to reassure them through concise disclosures on how they will use personal data. They should clarify the purpose of maintaining their consumer data, as they are expected to provide simple user controls to opt in and out of different levels of data sharing. This way, they could establish a trust-worthy relationship with customers and prospects.

Companies are already personalising their shopping experience based on the user situation and history. Tomorrow’s tourism businesses are expected to customise the user experiences of their mobile applications and web interfaces, according to the specific needs of each segment. Big data and analytics capabilities are increasingly allowing businesses to fully leverage their rich data from a range of new digital touchpoints and to turn them into high impact interactions. Those businesses that are able to reorient their marketing and product-development efforts around digital customer segments and behaviours will be in a position to tap into the hyper-growth that mobile, social media and the wearables markets are currently experiencing.

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The Segmentation of Demographics in the Travel Industry

This is an excerpt from: “Market Segmentation, Targeting and Positioning”

How to Cite: Camilleri, M. A. (2018). Market Segmentation, Targeting and Positioning. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 4, pp. 69-83). Springer, Cham, Switzerland.

Demographic segmentation involves dividing the market into groups that are identifiable in terms of physical and factual data. The demographic variables may include; age, gender, income, occupation, marital status, family size, race, religion and nationality. These segmentation methods are a popular way of segmenting the customer markets, as the demographic variables are relatively easy to measure. For example, the age range for business travellers may usually span from their late twenties to their mid-fifties.

Younger employees are travelling for business purposes and their buying habits are completely different than their older counterparts. On average, millennials took 7.4 business trips in the last year, compared to 6.4 for Generation Xers and 6.3 for baby boomers (Skift, 2018). Younger travellers are less likely to book air travel based on loyalty programme perks. They are more likely to book their flight according to the airline service and the customer experience they offer. Moreover, young travellers are more likely to use room share services like Airbnb, than other segments (Skift, 2018). However, for the time being, major hotel brands are not under any serious threat.

At the same time, Uber and other ridesharing services are becoming mainstream across all age groups, as they may be cheaper than taxis (Pew Research, 2016). The age range in the leisure market is a very broad one and quite different to that in the business market. Children particularly can play an important role in leisure travel, as they travel abroad on holidays with their families. Young people in their early to mid-twenties too are prepared to spend their disposable income on travel before they take on the responsibilities of family life. At the other end of the scale, we have those who are retired from work, are in a relatively good health and in good financial position which allows them to travel.

In the past, middle-aged males dominated the business travel market. However, recently, the advertising and promotion of airline services have increasingly targeted female business travellers. This market controls 60% of U.S. wealth and influences 85% of purchasing decisions (Skift, 2014). The female gender is high-tech, connected, and social. They represent 58% of online sales (Skift, 2014). To maintain their competitive edge, travel brands must start focusing their campaigns to better target women. The leisure travel market is far more balanced in terms of gender. In fact, in older categories of leisure travellers, that is over the age of sixty, women outnumber men due to their longer life expectancy (Boston Globe, 2016).

The ability to travel for leisure purposes greatly depends on an individual’s income. Leisure travel is a luxury which may be foregone when times are financially difficult. Generally, as personal income rises, the demand for air travel increases. However, should there be a recession, money belts are tightened, and less leisure trips may be taken. This is an example of a concept known as income elasticity (this topic will be discussed in Chapter 8). Income elasticity can be defined as the relationship between changes in consumers’ income level and the demand for a particular item.

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Springer’s textbook for tourism students and practitioners, including airline managers

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Reserve an Online Book Review Copy

Springer’s authoritative textbook, Travel Marketing, Tourism Economics and the Airline Product has received numerous endorsements from leading academics.

“Dr. Camilleri provides tourism students and practitioners with a clear and comprehensive picture of the main institutions, operations and activities of the travel industry.”
Philip Kotler
, S.C. Johnson & Son Distinguished Professor of International Marketing, Kellogg School of Management, Northwestern University, Evanston/Chicago, IL, USA

“This book is the first of its kind to provide an insightful and well-structured application of travel and tourism marketing and economics to the airline industry. Student readers will find this systematic approach invaluable when placing aviation within the wider tourism context, drawing upon the disciplines of economics and marketing.”
Brian King, Professor of Tourism and Associate Dean, School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong Kong

“The remarkable growth in international tourism over the last century has been directly influenced by technological, and operational innovations in the airline sector which continue to define the nature, scale and direction of tourist flows and consequential tourism development. Key factors in this relationship between tourism and the airline sector are marketing and economics, both of which are fundamental to the success of tourism in general and airlines in particular, not least given the increasing significance of low-cost airline operations. Hence, uniquely drawing together these three themes, this book provides a valuable introduction to the marketing and economics of tourism with a specific focus on airline operations, and should be considered essential reading for future managers in the tourism sector.”
Richard Sharpley, Professor of Tourism, School of Management, University of Central Lancashire, UK

“The book’s unique positioning in terms of the importance of and the relationships between tourism marketing, tourism economics and airline product will create a distinct niche for the book in the travel literature.”
C. Michael Hall, Professor of Tourism, Department of Management, Marketing and Entrepreneurship, University of Canterbury, Christchurch, New Zealand

“A very unique textbook that offers integrated lessons on marketing, economics, and airline services. College students of travel and tourism in many parts of the world will benefit from the author’s thoughtful writing style of simplicity and clarity.”
Liping A. Cai, Professor and Director, Purdue Tourism & Hospitality Research Center, Purdue University, West Lafayette, IN, USA

“An interesting volume that provides a good coverage of airline transportation matters not always well considered in tourism books. Traditional strategic and operational issues, as well as the most recent developments and emerging trends are dealt with in a concise yet clear and rational way. Summaries, questions and topics for discussion in each chapter make it a useful basis for both taught courses or self-education.”
Rodolfo Baggio, Professor of Tourism and Social Dynamics, Bocconi University, Milan, Italy

“This is a very useful introductory book that summarises a wealth of knowledge in an accessible format. It explains the relation between marketing and economics, and applies it to the business of airline management as well as the tourism industry overall.”
Xavier Font, Professor of Sustainability Marketing, School of Hospitality and Tourism Management, University of Surrey, UK and Visiting Professor, Hospitality Academy, NHTV Breda, Netherlands

“This book addresses  the key principles of tourism marketing, economics and the airline industry. It  covers a wide range of theory at the same time as offering real-life case studies, and offers readers a comprehensive understanding of  how these important industries work, and the underpinning challenges that will shape their future. It is suitable for undergraduate students as well as travel professionals, and I would highly recommend it.”
Clare Weeden, Principal Lecturer in Tourism and Marketing at the School of Sport and Service Management, University of Brighton, UK

“In the current environment a grasp of the basics of marketing to diverse consumers is very important. Customers are possessed of sophisticated knowledge driven by innovations in business as well from highly developed technological advances. This text will inform and update students and those planning a career in travel and tourism. Mark Camilleri has produced an accessible book, which identifies ways to accumulate and use new knowledge to be at the vanguard of marketing, which is both essential and timely.”
Peter Wiltshier, Senior Lecturer & Programme Leader for Travel & Tourism, College of Business, Law and Social Sciences, University of Derby, UK

“This contemporary text provides an authoritative read on the dynamics, interactions and complexities of the modern travel and tourism industries with a necessary, and much welcomed, mixture of theory and practice suitable for undergraduate, graduate and professional markets.” 
Alan Fyall, Orange County Endowed Professor of Tourism Marketing, University of Central Florida, FL, USA

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The Travel Products’ Price Determinants

This is an excerpt from my latest tourism textbook, entitled; ‘Travel Marketing, Tourism Economics and the Airline Product’. This publication will be available through Springer and Amazon.com.


Price Determinants
The type of pricing strategy which marketing managers consider is determined by a number of factors, including: organisatonal and marketing objectives; types of pricing objectives; cost levels; other marketing mix variables; market demand; competition, and legal and regulatory issues, among other matters.

Organisational and Marketing Objectives

Company policy and image, target profit margins and staff count could influence the type of pricing policy which the marketing managers will apply. Company policy and image will play an important role when determining a pricing strategy. The price set must be consistent with the general corporate objectives and the strategic direction of the company. For example, a full-service airline may want to be associated with the top-end of the market by providing a high-quality service to the business travel segment. To price below the average rate for such a service may imply an inferior and poor-quality service.

Any airline which would like to target the business market should provide an extensive schedule and a high-quality service. Therefore, it will require considerable resources and capabilities to do so.

Pricing Objectives

The most fundamental pricing objective is that of survival pricing. When experiencing severe competition, businesses may be forced to offer lower prices than their rivals. This way they will generate revenue, and improve their chances of survival. A tourism service or sub-product will not generate revenue if it is not used over a given period of time (it will perish) . While the service or sub-products may be available for sale at some later point in time, the revenue that was originally lost, can never be regained. For example, a hotel had thirty empty rooms on a specific date. These empty rooms cannot be sold at a later date because the service has been completed, and perished. Similarly, an airline could depart with empty seats which cannot be sold at a later date.

Moreover, the demand for tourism products is usually seasonal. For example, many north Americans flee south to Hawaii and to the Caribbean, during the winter months; whilst Australasians travel to Europe during the summer months of June, July and August. Of course, seasonality may be due to other factors, other than climate, including; vacation and holiday periods. For example, families may habitually travel at the same time of the year, usually over Christmas, Easter or summer periods. This is the usual close-down time period for schools, industry and commerce, in many countries. Since tourism is highly seasonal, suppliers may reduce their prices during off-peak times. Hence, a low price strategy assists in creating demand particularly among price-sensitive customers. Conversely, operators may charge higher prices when there are peaks in demand, due to major attractions and special events.

Profit maximisation is another pricing objective. However, it may prove difficult to measure, as businesses could not be in a position to determine when they have reached maximum profit. As a result, profit maximisation may be evaluated according to a certain ‘level of satisfaction’. A change in profit relative to previous periods may be considered as satisfactory or unsatisfactory for the businesses. The setting of prices to obtain a fixed rate of return on a company’s investment is a profit-related objective. Many businesses could be aiming to achieve a specific profit.

Another possible pricing objective is that of increasing market share. Many companies may design pricing policies which will enable them to improve their market share. However, at times, they may be satisfied with their current status in the market. In this case, their objective would be to retain their status quo. Companies with such an objective may not use pricing as a competitive tool. They will probably maintain a steady market share by nurturing their brand equity.

Cost Levels

The marketing managers should be careful to analyse all costs so that they will be included in the total cost. Therefore, the pricing of products should be based on the company’s direct and indirect costs (and may consider overhead expenses) if they are projecting a certain profitability margin.

Other Marketing Mix Variables

The marketing mix elements, including; promotions (the integrated marketing communication mix) and place (distribution channels), could determine the target customers’ perceptions of the firms’ products (or services), in a given competitive context.

The extent to which a product is promoted can have a huge effect on consumer demand. The products’ price will usually determine their target market. Low-priced products may attract price-sensitive markets. Such products will be promoted through different marketing communications channels other than high-priced, better quality, premium services. The more expensive the products; the higher the customers’ expectations. Considerable thought and action must go into product development so as to provide the customer with a valuable service which reflects the product’s price. One of the most significant promotional tools is word-of-mouth publicity. For instance, online reviews and ratings are increasingly playing a major role in tourism marketing.

When making a pricing decision, the businesses should consider their distribution costs. The companies’ intermediaries, including; tour operators, online travel agents, and the like, will expect financial compensation for selling travel products. Alternatively, they will expect discounts and special incentives to push the businesses’ products to consumers. For example, they may book large seat orders and place substantial mark-ups on seats which they have bought from the airline (these products may be demanded for inclusive tours). These factors must always be taken into consideration by the airline marketing managers, as they have to add mark-ups to the cost price of seats, when selling them to intermediaries.

Market Demand

There is a highly segmented market for tourism products. Each of the market segments vary in terms of elasticity, and service requirements. These variables will influence the way in which prices a set.

The business travel segment is generally more inelastic in demand. Fluctuations in prices will not affect demand to any great extent. However, the business travel segment expects a high-quality service. Generally, business travellers are prepared to pay a higher price for such services. The higher fares will not only cover the costs of the superior service, but will also convey an image of a premium, prestige product.

The passengers from the leisure travel segment are usually price-sensitive. Their expectations are somewhat lower than those of the business travellers. Demand is extremely elastic in this segment; and an increase in price may result in lower demand.

The socio-political factors may affect market demand. If a destination is politically or socially unstable, tourists may not want to go there. Most people like to feel safe and comfortable. For instance, many destinations have experienced dramatic reductions in the number of tourist arrivals, following the terrorist activities in certain countries.

Economic factors, including the individuals’ income and well-being, will affect their propensity to travel. However, this may not necessarily translate to an increased demand for all tourism products. For instance, if leisure travellers receive an increase in income, they may decide to travel to long-haul destinations rather than short-haul itineraries. Alternatively, these clients may increase the quality and standard rather than to increase their frequency of travel. Such customers may decide to upgrade their hotel accommodation, or to travel in higher classes. Income may affect demand according to the purpose of travel. For business travellers it may not make much difference, whilst for leisure travellers it can make quite a substantial difference. Their demand may also be influenced by the availability of substitute products. If there are no substitutes for the product, then consumers will be forced to buy regardless of price.

In addition, customers may develop perceptions about tourism products. Whether they are accurate or not, they could influence their purchase behaviours. Therefore the travellers’ perceptions, the online ratings and reviews should be carefully considered, as tourism products must always be purchased in advance.

Competition

The businesses should be aware of their competitors’ prices. They may decide to respond to their rivals’ pricing strategies, or to be proactive by taking the pricing initiative, themselves.

Responding to the Competitors’ Pricing Initiatives

There is no rigid method of responding to a price initiative taken by competitors. Every situation is unique. However, businesses are capable of making confident decisions if they examine the situation from different viewpoints:

At times, competitors may decide to lower their prices: It is not wise for other businesses to follow suit, unless they establish why their competitors are pursuing such a pricing strategy. It may be the case that the competitors have made a bad decision. It must be determined whether the competitors’ pricing initiative was a long term or a short term one. For instance, an airline’s poor fleet planning may result in the company changing its prices on a long-term basis. In such situations, rivals will have to respond or risk losing their market share. Price reductions will eventually lead to lower yields for the airline. As a result, this will have a negative impact on the airline and its long-term sustainability prospects. If the pricing initiative appears to be a short-term action, it is advisable to ignore it, and to avoid de-stabilising the market.

The price reductions on certain products may be questioned by the airline’s customers. As discussed above, the airlines may usually charge higher prices for their business and first class as these services are considered as prestige products. The airlines can differentiate themselves from competitors when they provide superior services; that are perceived as an index of quality and corporate image.

On the other hand, the airlines’ should continuously monitor those competitors who are resorting to price-cutting policies. Certain leisure markets may be more price-sensitive than others, as they may exhibit higher price-elasticity levels. The lower prices could result in an increase in demand for the economy class of service.

Taking the Price Initiative

Generally, businesses may avoid lowering their fares, as this will affect their bottom lines. Price wars have destroyed the profitability of many businesses. However, there may be a tendency toward price competition: when firms have low variable costs; when there is little differentiation among the competitors’ products; when industry growth rate is low, and; when the economies of scale are important. The businesses need to consider their cost levels before taking the initiative to lower their prices. The lean businesses who may have less costs, will usually be in a much stronger position to lower their prices than other competitors with high costs. However, more established high-cost businesses may have stable financial backing, which will enable them to meet, if not undercut, the new companies’ prices. They could eventually push their competitors out of the market.

An increase in price may be required if the business is facing controllable or uncontrollable costs. For example, if the airlines’ uncontrollable costs, include; increased airport landing fees and air traffic control charges; they may either decide to absorb these costs or alternatively, they may increase their fares as a means of covering these added costs. Of course, rival airlines will also face the same pressure. In such cases, the airlines could inform their customers about their uncontrollable costs, which have forced them to increase their fares. Ongoing corporate communications and public relations will help them to maintain their customers’ goodwill. On the other hand, the airlines’ controllable costs, including the employees’ salaries and wages, are under their direct responsibility. Such costs may not justify taking pricing initiatives to improve the organisation’s financial performance. They may even aggravate the airline’s profitability, in the long-term.

Legal and Regulatory Issues

Legal and regulatory issues may have an impact on a company’s pricing structure. Although, the airline industry has experienced deregulation and liberalisation in the past decades, there is still some government intervention, in certain areas. In international markets, air service agreements between governments necessitate that national airlines should meet and agree on the fares and rates to be charged to passengers. The agreed fare is brought back to both the airline’s governments who have the right to veto the fare. Should this happen, the airline concerned must seek to re-open negotiation.

Deregulation and liberalisation have affected the airlines’ pricing policies in many contexts. For example, liberalisation has changed the fares regime in the United States of America, in the European Union and in many other places. Today, several airlines have introduced lower fares which have contributed to increased travel. Moreover, the rise of the low-cost carriers has often resulted in lower air fares within pre-agreed zones. Evidently, pricing is increasingly being used as a competitive tool, in many contexts.

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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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The use of interactive marketing in travel and tourism

Interactive marketing enables two-way communications between sellers and individual buyers. This exchange takes place online through social media, content syndication and mash-ups; tagging, wikis, web fora and message boards, customer ratings and evaluation systems, virtual worlds, podcasting, blogs, and online videos (vlogs).and blogs. Some of its advantages include the ability to precisely communicate to individuals with addressable messages that can be customised to individual consumers. Therefore, interactive marketing is also linked to content marketing.

Many companies can produce relevant content that is shared many as times through social networks. Such content may “go viral” among social media users. As a result, it can bring in many inbound leads, coming through download page, as internet users can choose what content they wish to be exposed to, respond to, and share.

 

Interactive marketing techniques typically include response mechanisms that allow consumers to respond directly to corporate communication. This marketing communication tool is much more precise and measurable, when compared to other media. The ability to measure direct and interactive marketing effects allow marketers to design communication programmes that target consumers, based on; recency – the amount of time since last purchase, frequency – the number of previous purchases, and monetary value – the total expenditures a customer makes over time.

Online businesses can make use of Google Attribution to measure the impact of their marketing across devices and cross-channels; as Google holds vast amounts of data on net users, from its services including; AdWords, Google Analytics and DoubleClickSearch. The technology giant has access to consumer profiles more than any other company, because it knows when they view ads in its search engine, or in Gmail, YouTube, Google Maps, and in its Android apps. It also knows where consumers go, both online and in the physical world, based on cookies and location data from their phones. The company will shortly be in a position to track credit and debit card transactions and to link them to online consumer behaviour (Associated Press). Google’s moves will bring significant marketing opportunities to advertisers. Businesses could leverage themselves if Google provides them with relevant data on their prospective customers’ needs and wants. Google could inform them when prospects need products or services, and what price they are willing to pay. These answers allow marketers to better target individual consumers. However, these advances will also raise privacy concerns. Wary consumers may install ad blockers, tracking blockers, and could decide to switch off their phone’s location services to ignore the greater personalisation of content from advertising.

Many individual users are using mobile devices to construct their new customer experiences. The use of social networks allows them to engage, communicate and co-create in the online world. For instance, the tourism organisations’ websites and destination management organisations are using social media networks as well as interactive communications to enable tourists to personalise their sites with their personal experiences. They empower tourists as they facilitate the co-creation of content for the benefit of others. As a result, social media users and their reviews may impact on tourism marketing. Independent reviews and ratings are often considered as trustworthy sources for prospective tourists, as they provide objective information on tourism products and services. For example, TripAdvisor provides travel-related reviews and opinions on accommodation establishments, restaurants and attractions. In addition, many websites, which are traditionally known as booking engines, including; Booking.com, Airbnb.com, et cetera, also provide reviews that are integrated in their presentation of properties, restaurants and other amenities. A distinction should be made between reviews and ratings: Reviews will generally include qualitative comments and descriptions, whilst ratings usually feature quantitative rankings, corresponding to degrees of user satisfaction. The ratings may be part of a review.

Sometimes, internet users may notice that there may be controversial reviews and unverified negative criticism.  In a similar vein, the tourism service providers may also claim that they were subject to unfounded negative ratings. Very often, businesses have been blackmailed by consumers, who have threatened them that they will write negative reviews unless their demands are not met. On the other hand, several consumers have also reported cases of unfounded positive ratings of services. Therefore, online users are increasingly paying more attention to these contentious issues.

Lately, the World Committee on Tourism Ethics has elaborated its recommendations for the responsible use of ratings and reviews on digital platforms. Their recommendations are addressed to three main groups of stakeholders, namely: online platforms (operators like TripAdvisor or Yelp) service providers (businesses that are listed on these platforms); and users (consumers).

Digital platforms that incorporate reviews and ratings for their products and services need to ensure the accuracy, reliability and credibility of their content. Online platforms should undertake all reasonable measures to ensure that the individual reviews reflect the real users’ opinions, findings and experiences. The provision of publicly available information through digital media involves a certain degree of trust. The veracity of the reviews is essential for their integrity, reputation and good functioning of the review platforms. Whilst it is not always easy to verify the authenticity of user generated content, the digital platform should have quality control mechanisms and processes to ensure that their reviews are clear, accurate and truthful, for the benefit of the service providers as well as prospective consumers.

Dr Mark Anthony Camilleri is the author of Springer’s ‘Travel Marketing, Tourism Economics and the Airline Product’

 

 

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