December 8, 2014
Written By Aleksandra Rakonjac
Industry Overview
Over the past 50 years travel industry has experienced substantial growth and as such has become one of the most profitable industries (World Tourism Organization 2012). Recent developments in ITC technologies have contributed to even more significant growth of this industry and its changes.
Once in Rome I met a 50-55 years old Swedish couple and helped them get around narrow streets of the city. Meanwhile, they told me they have already visited Rome for their honeymoon 20 years ago and that it was less touristy and more charming. What happened? The Internet, that eventually became a major tool in tourism industry (Wua et al. 2008). Developments in ITC technologies have influenced a number of travelers around the world to use technologies for planning and experiencing their travels (Buhalis & Law 2008). This means that customers search for travel information online, make online air-ticket bookings, as well as room reservations, and other online purchases themselves instead of relying on travel agencies to do this for them (Buhalis & Law 2008). Not only did purchasing holidays become easier and more efficient in the sense that customers no longer need travel agencies, but also more affordable. Due to the popularity of the Internet, many tourist organizations such as hotels, airlines, and travel agencies have incorporated Internet technologies as part of their marketing and communication strategies (Buhalis & Law 2008). However, many of them are still uncertain how to incorporate and use these technologies best since all online consumers are perceived as equal.
New Travelers
The Internet has shaped and created new consumers. Among the active Internet users between the ages of 16 and 54, 72.8 percent read blogs or web logs (Akar & Topcu 2011). After buying and consuming a product or service, users like to share their review and evaluation through a social network site. It has been reported that people spend more than 20% of their time online visiting social networking websites (Seraj 2012). Accordingly, travelers use social media to report their latest travel adventures. Moreover, electronic word of mouth has become dominating channel and can take place in different ways such as discussion forums, posted reviews or opinion platforms (Akar & Topcu 2011). Similarly to pre-modern times even today every purchasing decision is affected by social influence (Akar & Topcu 2011) and wants to be shared and displayed as such.
New travelers, however, are described as sophisticated, technologically and linguistically skilled. Organized tours are dull whereas self-organized trips are adventurous (Buhalis & Law 2008). New travelers seek experience, but look for value (money and time). New travelers can be described as both, hedonistic and utilitarian. Hedonism relates to festive, ludic, fun and playful side of shopping where consumers seek for pleasure, curiosity, fantasy and escapism (Scarpi 2012). Such travelers daydream about escaping to far lands. Hedonistic travelers (or non-travelers) spend hours and hours online searching for beautiful, tropical, hidden places where they want to escape once. By contrast, utilitarianism represents task-related, rational, necessary shopping (Scarpi 2012). Holidays are one of the most expensive services purchased and take out most of the house budget (Burn 2013). As such they are more closely related to utilitarianism since the travelers take time to explore options, think and finally purchase a holiday. It is essential for travel and tourist organizations to keep this in mind when designing and deciding for their online channels. Websites, social media webpages and blogs should be easy to navigate, pleasurable, stimulate curiosity and leave good overall impression so that audience would use it repeatedly (Scarpi 2012).
Just like in offline marketing, organizations need to know how their online target market thinks, acts and performs. Even though typical travelers of the 21st century are somewhat generalized, due to the high increase in Internet usage when purchasing travel it is essential to understand how are these online users segmented. Age, gender, income, and education were found to have a significant influence on online shopping intent (Aljukhadar & Senecal 2011). According to Aljukhadar and Senegal online consumers are segmented in the following way:
1. The basic communicators (use the internet mainly to communicate via e-mail),
2. The lurking shoppers (consumers who employ the internet to navigate and to heavily shop)
3. The social thrivers (exploit more the internet interactive features to socially interact by mean of chatting, blogging, video streaming, and downloading) (2011).
Travel and Tourist Organizations
What does all this mean for tourist organizations? In order to better understand which communication strategies to use for online activities it is important to acknowledge previous information and identify online target market. The world fell for the Internet and social media but not all the tourist and travel organizations will benefit from such communication strategies in the same way.
Compared to basic communicators and lurking shoppers, social thrivers are the least important segment due to the fact that they are the youngest users with lowest income (Aljukhadar & Senecal 2011). They are often disregarded and therefore not targeted for e-commerce websites. However, statistics show that they spend most time on the Internet. If travel and tourist organizations do not know how their target market utilizes time on the Internet, data can be misinterpreted and lead to wrong communication strategies. Offering exclusive holidays and targeting social thrivers will not generate high ROI. Instead, targeting lurking shoppers, who are highly educated and of highest income, will generate some ROI. Affluent consumers, who correspond to lurking shoppers, do not have the time to search for travel services and destinations to satisfy their travel needs (Bhati et al. 2013). Still the Internet can be used in two different but not exclusive ways: first, as a source of information, and second, as a marketing tool to facilitate online transactions (Garces et al. 2004). 14 years ago it was mainly used as a source of information due to insecurity in payment systems, technology and lack of human interface (Lang 2000). Today, however, the majority of Internet users overcame this barrier. As previously mentioned, particular segment that still does not use the Internet to purchase holidays are affluent travelers. Travel agents are still important and far from distinct when it comes to affluent travelers (Burn 2013). High end travelers appreciate customization, authenticity and exclusivity when planning their travel (Bhati et al, 2013) and this is to be achieved through networking, personal selling, and world wide recognized prizes (Burn 2013). They do not have the time to waste because for them, time is money. Social media websites such as Facebook, Twitter, or different blogs attract no attention (see the pic) since this segment only cares about the relationship with the hotel (Burn 2013).
Social thrivers, even though perceived as not important, are not to be completely dismissed. Knowing that they spend most of their time on the Internet engaging in social media websites to chat, blog, stream and download; travel and tourist organizations should use that information to better know where to advertise when targeting young travelers of lower income. Having identified where to target them, travel and tourist organizations need to know how to best reach new and existing travelers. Out of different options of Internet advertising such as banner ads, coupon/loyalty advertising, SEM (search engine marketing), and price comparison websites; it is vital to acknowledge that coupon/loyalty advertising and search engine marketing are used to reach existing consumers whereas price comparison websites attract new consumers best (Breuer & Brettel 2012).
Summary
The beauty of the Internet is that it offers broad range of information, products and services easily available. Couple of clicks share travelers from adventurous journeys and relaxed family holidays. Tourist and travel organizations have experienced major changes within their business models due to the rise of the Internet and customers’ fidelity to it. What has not changed is the way these organizations should think of their consumers. Just like offline, travelers can be differentiated and segmented even online. In order to better utilize all the benefits the Internet offers, organizations should identify and understand their online target segment and plan communication strategies accordingly.
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