#TTE2016

#TTE2016

“Transform or be disrupted”Can the traditional Tour Operators survive?

Marco Ryan

#TTE2016

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@marcoryan

www.marcoryan.com

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#TTE2016

Early disruption focused on specific stages of the Travel experience

Dream

Plan

BookExperience

Share

#TTE2016

What trends will cause further disruption?

Generation–n

IOT

Atomization of Apps Digital Transformation

SMAC Business models

Mobility

Design thinking

#TTE2016

Key trends; Generation-n

Generation-nThe “needs based” generation

Relevancy Simplicity Lifestyle Immediacy

#TTE2016

What “needs” are tour operators fulfilling?

Convenience?Price?Value?Trust?Scale?

Flexibility?

Are they still a match for the changing needs of

their customers?

#TTE2016

Key trends: Internet of Things (IOT)SO WHAT?

¨ Data now becomes an Asset, Analytics a hygiene factor

¨ New business models based around solutions & Partnering

¨ Drive increasing Customer expectations around friction fee Experience

EXAMPLES¨ Virgin Atlantic, Milton Keynes Council, RR,

BGas, Fitness First, Disney, John Deere

#TTE2016

Key Trends: Atomization Of AppsSO WHAT?

¨ Increases revenue opportunities for new Solutions/services

¨ Provides more micro-measurement opportunity

¨ Customers increasingly less tolerant of App boundaries and poor integration.

¨ Increased complexity of Customer Ownership

¨ Challenges IT and Mobile Roadmaps

EXAMPLES¨ Spotify, WeChat

#TTE2016

Key Trends: Design Thinking

SO WHAT?¨ Emotional responses build loyalty. Design

thinking ensures products and services drive high loyalty.

¨ Often Require cultural shift and sometimes leads to organizational change

¨ Products are often simpler, more focused but always more relevant

EXAMPLES¨ Nest, Square, Disney, GE, IBM, Apple

Return to your

original use

group and

testing for

feedback

TestBuild a

representation of

your ideas to

how others

Prototype

Brainstorm and

come up with

creative solutions

IdeateConstruct a point of view that is based on use needs and

insights

Define

Learn about the audience for whom you are

designing

Empathize

#TTE2016

Key Trends: Mobility & Smart Devices

SO WHAT?¨ Device less important, emphasis now on

seamless experience across devices¨ Increase reliance on Real-time analytics

and User Experience Design to make interaction contextual

¨ Low tolerance for experiences that are too generic or that create friction

EXAMPLES¨ Natwest, Snapchat, Slack, Virgin

America, Uber

#TTE2016

Key Trends: Digital Transformation

SO WHAT?¨ Needs CEO leadership to succeed¨ Culture change is critical as Digital needs

to be pervasive across organization¨ Fundamentally different from Digitization¨ For many organizations failure to

transform will ¨ Sometimes difficult to “change the wings

of the aircraft in flight”

EXAMPLES¨ Axel Springer, Delta, Air New Zealand,

Thomas Cook

#TTE2016

Key Trends: The Rise Of SMAC

SO WHAT?

EXAMPLES

¨ Increasingly a “hygiene Factor” for digital organizations

¨ Individually important, but when combined can be both disruptive and differentiating.

¨ Implications for Data Protection and Cyber Security

¨ Finally enables 1:1 marketing to be cost effective

¨ Netflix

Social Mobile

Analytics Cloud

#TTE2016

Key Trends: Artificial Intelligence

SO WHAT?¨ Can process unstructured data (e.g. Social

media)¨ Success measured by ROI, Impact, new

models not on traditional IT measures¨ Levels of investment requires partnering

and new ecosystems focused on solutions not on traditional corporate boundaries

EXAMPLES¨ IBM, Amazon, Microsoft.

#TTE2016

Where is the Disruption? Social Travel Agents

The ability to mix crowdsourcing, expert insight and professional services into a collaborative solution challenges Tour operators who are hampered by expensive retail footprint, that restricts their agility, their profitability and their relevance

Important because…

#TTE2016

Where is the Disruption? The Sharing Economy

New products and services are being rapidly extended on existing disruptive platforms where the principle is about sharing rather than owning at a pace that the Tour Operator cannot match

Important because…

#TTE2016

Where is the Disruption: Social Content & Trust

Reviews, Localized content and services based on Social trust that are modularized and can be integrated into different and changing ecosystems, undesigning the Tour Operator’s value chain

Important because…

#TTE2016

What Are The Typical Characteristics Of A Digital Enabled Company?

Talent and leadershipSupporting internal processes

Organisation

Internal collaboration across functions and high performing cultureRisk appetite regarding digital initiativesSpeed of decision making and agility of digital organization

Access of capabilities through external partnerships

Promotion of "test and learn" environment

Culture and mindsets

Bold, long-term orientationAbility to address customer need

Linkage to overall corporate strategyStrategy

Digital content creation/innovation strategyDigital customer experience applicationDecision making/data analyticsTechnology infrastructure and growth management

Automation of customer activities and back office

Overall capacity and channel usage

Capabilities

Which Tour Operator can claim

to match up to this?

Copyright 2016 McKinsey & Co

#TTE2016

Tour Operators are evolving … but slowly

Tour Operator 1.0

• All About manual and analogue processes

• Product led• Focused on Operations• Little or no digital initiatives

Tour Operator 2.0

• Silo’d organization• Legacy IT being addressed• Operationally efficient• Fragmented Digital initiatives• Basic CRM• Main Focus on AR revenue• Beginning to adapt• Some new products and

services

Tour Operator 3.0

• SMAC compliant technology• New Organization model driving

cross-functional projects• Operationally efficient, but with

increasing focus on Lifetime Customer Value

• Clear digital Roadmap and coordinated digital plans

• Single View of the customer• Data and Analytics driving

insight and performance• Agile to changing Customer

needs• Design thinking driving new

products

Tour Operator 4.0

• Fully connected for all stakeholders

• “Smart” Culture of real-time operations & insight led actions across all functions

• Friction free experience between channels ,devices and locations

• New Organization model • Operationally efficient,

Commercially mature• Digital core competency across

organization• Single View of the customer• Customer needs at heart of a

new ecosystem of digital partnerships

• Deep understanding of Customer Lifetime value

“Legacy/basic”

“Agile /Digital”

“Smart Tour Operator”

“Adapting /Digitizing”

#TTE2016

What strengths and weaknesses do Tour Operators typically exhibit?

• Legacy Systems• Poor data management• Analog culture & largely Product

focus• Non-digital leadership in Board and C-

Suite• Listed companies • “Rumsfeldian” denial about disruption• Belief that their historical strengths

are enough to deter disruption

Historical strengths and yet also historical weaknesses

#TTE2016

AnalogTraditional channel Silo‘d

DigitisingMulti-channel monologue

DigitalOmni-channel dialogue

Tour Operators & The Digital Tipping Point

#TTE2016

What Should Transformation Mean To Tour Operators

TALENT: Bring in digital talent at all levels, especially for succession planning at the top. Shareholders and investors must hold the board more accountable to digital progress

DATA: Treat data like a Balance Sheet Asset. Invest,. Use, audit and understand its value

TECHNOLOGY: Partnership, open & scalable systems are key CULTURE: Challenge the Silos and “Product /Yield” mindsetDIGITAL: It is not a function or a team, it is your future. Make it

pervasive.DESIGN THINKING: Lead with Customer Experience and Needs. Products

should be simpler and more relevant to CustomerCOLLABORATE: Get your head out of the sand and look for new disruptive

partnerships

#TTE2016

Conclusion – Can Tour Operators Survive? ... but we are at a tipping point. Tour Operators must

• Increase digital boldness in the boardroom• Create a “Data/Analytics first” culture• Instill Design thinking as a core behavior• Really – DEEPLY – understand customer needs• Dramatically change their technical & product

agility (especially around customer data)• Pursue innovative and disruptive partnerships

YESand

NO

… or be disrupted

#TTE2016

Thank you

@marcoryan

www.marcoryan.com

uk.linkedin.com/in/marcoryan

www.marcoryanphotography.com