It’s been almost fifty years since tourism was built as we know it today. Like an engineering framework of beams, the major exporters of tourists designed the tourist structures of the recipient countries at convenience, seeking above all minimize the cost at which they could offer their products to their customers. It was the boom of the tour operators, who based their profitability in volume discounts, maximizing their economic benefit through mass production. They only had to send the enough tourists to any destination so the revenue would surpass the cost agreed with the airline.

And the benefits did not end there. If they wanted to extract even more revenue, all they had to do was offer more products and services to the tourists they had already sent to destination. Drowning their clients in complementary offer was easy for companies the size of tour operators. The stay at the hotel was now included in the package, besides the bus carrying tourists there. Tours with one theirs employed guides and meals at restaurants that offered them discounts. Numbers made sense. Customers returned. It was the only way to make the trip of their dreams at a time when any other option was too expensive.

But then they came the low-cost airlines as a result of the lowering of virtually the whole transport sector. Technology had reduced travel costs, and customers supported that change with purchases. Globalization and change of mindset did the rest. Global connectivity not only kept us connected miles away, but also made us more predisposed to mobility. Nomadism was back. Traveling was not a luxury anymore, but almost a human right.

But for a better understanding of the current shift in tourist preferences we must get into some demographic analysis. The generation on which mass tourism has been so far nurtured was the Generation X or Baby Boomers. A demographic cohort in the range of 40 and 70 years of age born at the dawn of contemporary tourism. A generation that did not begin to consume tourism products until they had enough purchasing power to afford them. A generation that fought for and used for the first time the month of paid vacation and whose tourism priorities were mainly rest.

But with the aging of this generation and the gradual increase in the purchasing power of the next one (the so-called Millennials, whose ideologies and consumer preferences were forged during the 2000s), the type and the way people consume tourism have both faced a dramatic change.

To start with, this new generation did not have to wait to have the money to enjoy sightseeing, as it was coasted by their parents. They have been consuming tourist products ever since they were babies. They have already been several times in standard hotels and apartments for mass tourism. It is not new to them. It is not a need. Past experience has satisfied them completely of usual tourism. Even worse, the emergence of low-cost travel and the proliferation of exchange trips have shown them a much broader catalog of styles of travel, in addition to predispose them more than any other generation to live tourism experiences where comfort and luxury were not only secondary, but even discarded for their excessive cost.

But the willingness to consume less traditional tourism products also comes with a change in the lifestyle of the new generation and the shift of their needs. New generations have grown up in an environment in which technological progress and economic growth has created first in them and eventually in previous ones a completely new need: to rank themselves socially in the new channels of communication.

It’s often thought that young people feel an almost pathological need of freely destroying their own privacy. Nothing further from the truth. They don’t give it away, they sell it. They exchange it for social recognition in an entirely new market (the online) where special moments are worth their weight in likes. Sharing is not the purpose, but the means. It is the fee paid to achieve the admiration they need.

And of course, the traditional tourism products will not help them achieve the status they are craving for. They know that a picture on the sunbed of a hotel will not always help them increase their followers. But a selfie from a spectacular cliff you only get after hours of trekking, however, will give them likes to bathe in. The more extravagant and exotic is the experience they live, the more social recognition they will obtain. Television was the communication channel that hit previous generations, but messages were limited to what companies with money to pay for their marketing wanted to convey. Now, with the advent of the Internet, communication is no longer owned by companies. In an net world where everyone has their own channel of communication (and therefore, self-promotion), among many millions of messages we only get to hear the ones that get our attention. To be heard and get the online social success they need, the millennials can only resort to shocking.

However, the boredom of the new generations towards traditional tourism products, their ever greater willingness to live travel experiences that are not based on convenience and their constant quest to surprise others in their social networks are not the only thing that tipped the balance in recent years towards tourism of experiences. Above all we must not forget the crossroads they are facing: the years of prosperity extended their adolescence and now the subsequent recession has caused them a feeling of rejection towards large corporations and the culture that these companies spread. Millennials hate feeling cheated. A millennial will never be satisfied with the first option when choosing flight or selecting accommodations. They know that their beloved technology, which changed forever their preferred industries (music, film and television) approaches now the tourist industry, and that the proliferation of search engines and online comparators give them more power than ever as consumers. None of them will rent a room in a hotel without checking its reviews on TripAdvisor first. And mass tourism hotels do not get as many stars as the ones that help them get viral in the internet.

But to believe that this behavior is exclusive of younger generations might a mistake. Older generations are not immune to technological progress by the simple fact of being older. Every year the rate of facebook users grows over 55%, as every year that goes by technology forces us to use it. The pace of innovation makes old consumer channels so outdated that it becomes impossible to continue using them. The fact that today is practically insignificant the number of consumers who don’t buy their flights through Internet should suffice as an example of how all demographic cohorts end up embracing new technologies if they are forced to do so. And giants like Google, Facebook or Apple will surely keep forcing us by offering exceptional usability and profitability.

To this change in consumer preferences of tourists must also be added the multiplier effect that will have this gradual turnaround. The fact that traditional tourist destinations that have so far offered only sun and beach for mass tourism are losing customers every day for destinations that offer more complete experiences should not be seen as something trivial. Every euro and every dollar that is not being spend on traditional destinations but on the new destinations is a further step towards the consolidation of the latter. Soon they will not only offer the kind of tourism that are increasingly demanding consumers, but also offer the best price. As the flow of tourists and capital move towards them, new destinations invest in infrastructure to ensure the optimization of its economic returns. A performance that will not arithmetically change as does the sun and beach destinations’ (constrained by price competitiveness as the only way to improve margins), but will do so exponentially as a result of the equitable distribution of the economic impact of tourists in the destination, implicit in this new kind of tourism.

The traditional tourism model of sun and beach is also too dependent on the price to be competitive. Reason why there is some relief in the current instability of rival destinations (Egypt, Tunisia, etc.) with a less established tourism but still likely to become serious competitors in the future. The only way to avoid the servitude towards price is by adding more features to the traditional range of products and services. Offering something else. Something that would made tourists no longer see price as a factor when choosing our destination. Betting on city breaks, rural escapes, ecotourism, or any of the experiences that are being increasingly demanded by travelers is the only way to improve competitiveness not only via prices, but also through a more equitable distribution of the travelers’ economic impact.

La entrada The Future of Tourism or Why Future Generations will always pick Adventure Travel aparece primero en Sustainable Tourism Charter.

 
Tourism has always been strongly linked to technical progress: a multitude of breakthroughs are able to improve one or several of the many aspects involved in making a trip and visiting other countries. In the last decades tourism has been slowly detaching from a standardized travel experience towards much more flexible models in every part of the process. This evolution towards sustainability has been fostered by the advances in information and communication technologies (a field strongly represented by Google) since they have allowed for information to be used much more fluidly by travelers.

 
So far, however, Google’s role had been exclusively an intermediating one. If we search a hotel in its engine it will show us a card that displays basic information on the place, and it will also allow us to book through a portal like Booking, as shown in the picture below.

This means that booking the room is a process effectively made and sealed in the reservation portal, and hotels pay Google for visibility in their search engine (the traditional pay-per-click). This move by Google is subtle, but it marks a paradigmatic shift: users can book the room directly through Google Travel interface, skipping the reservation portal, and the hotels in the programme will pay Google a credit card processing fee.

It might not look like a great deal, but if we consider it with a certain foresight it has some implications that could change the industry:

• Google also has an enormous database on flights, which are integrated in a similar fashion as hotels have been so far (Google is an intermediary, and the purchase is realized in a dedicated reservation portal). Google could shift the purchase of flights to its own interface just like it does with hotels, which would leave even less space for vertical operators.
• The more clicks that are needed by purchasing online, the lower the conversion rate. Since Google can provide the whole infrastructure to book reserves directly, not only does it control the user experience entirely, but it also benefits from the higher conversion rate since there are less clicks involved.
• If Google has the credit card data of the customer already, he or she will be able to use that card without having to input said data again. Taken without context this seems to be a small detail, but Google also has the most widespread mobile operating system (Android) whose users can buy Play Store applications for their phones. In 2014 Android phones sold more than one billion units, and a majority of them have the Play Store preinstalled. This means that there are millions of cards that are two taps away from a reservation.
• Aside of credit card data, Google’s reservation tool is embedded in every Android device and can be installed in iOS too: it’s Google Now, the personal assistant included in the search application (see below). If Google Travel can integrate its services it would be enough to say “OK Google, book a flight from Madrid to London and a room in the Meliá White House hotel” to have a trip ready.

This is not an original idea: another huge travel hub like TripAdvisor allows travelers to book rooms in Hotels directly from its own interface, both in the desktop website and in the mobile application. However, when a company with a market cap close to $400B (40 times higher than TripAdvisor) makes such a move, its impact can potentially redefine the future of tourism.

 
Today a traveler can gather information not just about the destinations or the means to travel that are available to him or her (which makes planning a trip much more flexible) but also to acknowledge the effects and consequences of travelling. This tourist is very well informed, and is also aware of the damage that obsolete touristic models have inflicted upon destinations and the people that live in them, which drives the need to look for travel experiences that make this traveler feel good both during the trip and afterwards.

 
Google is a company which is aligned with that mindset (remember their famous slogan “Don’t be evil”) and is ready to tinker and experiment even when things are going well for them. A relevant example of this drive to experiment is the Project Sunroof initiative which helps homeowners and businesses to calculate the best way to implement solar power equipment in their buildings. In Mountain View they have always denied their intention to enter the travel market directly as an OTA, but it is hard to figure out what Google’s ultimate plans for these touristic products. It is certain, however, that in the current situation where traditional companies are trying to grow through acquisitions to protect themselves against the advances of online-only operators, further strikes against the intermediary businesses will keep fueling this consolidation process in the future.

 
Moments like the present one, in which traditional operators are losing their relevance when it comes to bring travelers to destinations and hotels, it is clear that the latter need to be able to attract customers from the search bar and differentiate themselves from the competition. The best way to do it is by taking the steps towards economic, social and environmental sustainability, an approach which has proven to render a great ROI in the middle and long term. Travelers wish to go to sustainable places, residents want to live in sustainable cities and towns, and therefore those who have the clearest link with sustainability will have much of their work done for them with regard to finding customers in the future.

La entrada Google Travel or Why Technology is the path towards Sustainable Tourism aparece primero en Sustainable Tourism Charter.

Walk, don’t drive. Recycle. Buy local products. The culture of commitment to the future of the planet is here to stay. Nowadays you don’t just have to be sensitive to the environment but also show it. If you dare to not do so, you will be not just irresponsible, but also uncool. Younger generations have jumped the bandwagon of sustainability so vehemently that today companies find it impossible to continue ignoring the shift in the preferences of new consumers. While previously we only demanded products to be useful and unique, now we also require them to be green. And the tourism industry, given its ability to cause irreparable damage to the environment or otherwise champion its protection and promote the equitable distribution of the wealth it generates, could not escape this phenomenon.

Two segments of consumers are driving this transformation: the millennials, and the middle class of the developed countries, with its growing purchasing power. Both groups are more likely to buy tourism products related to sustainability than any other generation until now. They bought a GoPro to take pictures at the top of a cliff before diving into a lake of crystalline waters, not to stay lying on the sunbed of any Grand Resort. And you can’t just offer them a hideous tourist path in the most inadequate conditions. Millennials are not only able to detect greenwashing practices, but also punish them through social networks.

According to the Nielsen study on the ROI of sustainability, about 55% of consumers are willing to pay more for products and services from companies that demonstrate to generate impacts social and environmentally positive. ¿Shocking? There’s more: the same measure was 10% lower just three years ago. The tendency to acquire sustainable products and services is experiencing an unstoppable growth in parallel with the growth of the purchasing power of the younger generations.

And yet the majority of tourism companies still see sustainability as a “green tint” for their marketing efforts and not as a strategic priority. What these companies are missing may not be the benefit of sustainability in itself, but the long-term performance provided by a good reputation, whether it’s gained in the field of sustainability or not. Enhancing the reputation of the company can improve relationships with suppliers and customers, leading to increased profitability. Also, it is proven that by adopting fair employment practices, health standards and adequate security, you can reduce the company’s exposure to potential litigation and other risks.

But that’s not all. The adoption of sustainable actions not only improves the operating efficiency of the company, which leads to increased innovation and the development of competitive advantages that also contribute to improved financial performance, but it also helps to strengthen brand engagement not only with customers, but as well with investors, employees, suppliers and other stakeholders, ensuring the loyalty of all actors involved in the value chain.

Sustainable initiatives lead to a more committed and efficient workforce, to a more loyal and satisfied customer base, to improved relations with stakeholders, greater transparency and ability to innovate. All of them are factors that contribute to improving the long-term financial performance. It’s no wonder that sustainability leaders also tend to be leaders in their industries from the financial point of view. They have a wider vision, they focus on the long term and are better at anticipating and minimizing risks.

Commitment to sustainability has a positive effect on financial results, causing an increase in customer satisfaction and thus promoting loyalty. That is the conclusion of Greenloons’s study on the ROI measuring by Fáilte Ireland (the national tourism authority in Ireland) on the effects of the adoption of sustainable tourism carried out in the last decade in the country.

The study shows that

+ The ROI for hotel establishments (green hotels, hostels, inns) is higher than for other types of companies (guided tours) that implement sustainable practices.

+ Operational ROI is negative for about five years, but the Return on Investment generated by other variables (community, employees, customers) makes up for it.

+ The main generator of positive impacts on the triple bottom line (accounting for economic, environmental and social sustainability) is the transparency with the customer when it comes to making clear what makes the company sustainable and how that contributes to improving the experience of the customer (storytelling efforts).

We are in 2015. Companies are under constant scrutiny and, like Caesar’s wife doesn’t just have to be honest but also look the part. It’s no longer just about developing a product or service that meets all customers’ needs, we must also be good citizens and shout it from the rooftops. If our company is perceived as complicit in polluting water, receiving bribes or being environmentally irresponsible, we risk losing the new middle classes. And if we don’t manage our online reputation properly and it is damaged by a hoax, we will lose millennials before we even know why.

A hopeless environment? Of course it is. At least for companies that don’t want to take the initiative and engage in the booming business of sustainability. Some of them still focus their efforts on preventing adapt to new times, but all they get is delaying the consequences of operating outside the reality of the rest of the planet.

Meanwhile, companies that are already realigning their strategies to suit the needs and trends of the new generations will be at a better place to deal with the upcoming changes. And when times of uncertainty and change arrive, having the trust of consumers on their side might do that sustainability and its return on investment is seen at last as a strategic imperative and not as another sheet within the budgets of the company.

La entrada The Return on Investment for Sustainable Tourism aparece primero en Sustainable Tourism Charter.