A TOUR OPERATOR'S PERSPECTIVE ON CULTURAL TOURISM
The way in which the global tourism industry functions evolved many years ago to reflect the needs of companies offering traditional tourism products and the travellers who consumed them. A central feature of this modus operandi is the sales chain shown in the accompanying diagram.
Australia Country "X" service suppliers
eg. gallery owners, day tour operators, etc =>
inbound tour operators => tour wholesalers => retail travel agents => consumers
Just to confuse things, 'inbound tour operators' don't always provide a direct service to the travelling public. ITO's act as intermediaries between overseas-based tour wholesalers on the one hand, and a plethora of individual service providers, eg. day tour operators, hotels, etc, on the other.
Within the context of this article the most significant market trend to date has been the steady shift in consumer tastes towards more meaningful travel experiences, often driven by a desire for self-development. This has created a gap in the market not readily filled by the mainstream tourism industry, resulting in the emergence of a whole new breed of service providers.
Enter cultural tourism stage right. It shares this stage with others including educational tourism, nature-based tourism and ecotourism, which have various common features. Because of this let's bundle them together under the title 'soft tourism'. Some of the more significant (albeit grossly generalised) differences between 'soft tourism' and mainstream tourism are shown in the table below:
mainstream or 'hard' tourism 'soft' tourism large group size small group size office-based companies home-based companies high volume/low margin low volume/high margin (we wish) appearance substance features benefits consistent diverse isolated integrated industry-driven client-driven based around purpose-built features based around existing features been there, done that I understand
Thus soft tourism is a fundamentally different travel product with an alternative philosophy which necessitates a new approach to doing business. The very features which characterise soft tourism can be an anathema to those in the mainstream: "what do you mean, you can't guarantee whales on your whale-watching tour", etc.
These and other changes in travel behaviour and technology have resulted in increasing fragmentation of the sales model, suggesting that it's "use by" date is fast approaching. The most likely future changes to the model are going to be:
- a substantial reduction in the number of travel agents, with those remaining offering an increasingly professional and often more specialised service. This will occur in conjunction with a switch to time-based consultation charges for consumers, rather than the current reliance on commission payments on bookings
- a substantial reduction in the number of tour wholesalers and inbound tour operators, and possibly even the phasing out of one of these levels. Again, many of those remaining will offer an increasingly specialised service
- a substantial increase in the frequency of direct bookings between suppliers and consumers
Tour operators play a pivotal role
Another significant trend amongst contemporary travellers has been the growing move towards independant travel at the expense of packaged holidays. Tour operators retain an important role however, particularly in the soft tourism area where a premium is placed on quality interpretation of the natural, social and built features of the local area.
Moreover, the provision of tours is only one aspect of what tour operators do to facilitate soft tourism. Other aspects include advertising, participation in trade shows, and sponsoring familiarisation trips for visiting journalists or film crews. These activities not only promote specific services or venues, but also raise the profile of Australian tourism generally.
You might ask 'don't the other people in the diagram also do their bit in supporting cultural tourism ?'. Well they do, but the oil that keeps the machine moving is the commission paid by individual tour operators or venue managers and/or the mark-up on their nett rates.
But still do it tough
If the high levels of demand for soft tourism experiences shown in market research were translated across into tour bookings, people like me would be busier than a double-headed cane toad in a bag full of beetles.
The fact of the matter is that the majority of soft tourism operators are having a pretty difficult time. The poor profitability of individual operators is in turn stifling the ongoing development of this area of the travel industry.
The biggest stumbling-block seems to be sales and marketing, where there seems to be a serious mismatch with the sales model shown earlier. This is far more apparent where operators seek to sell their wares to the inbound tourism market (ie. to visitors coming to Australia). Some soft tourism operators, in endeavouring to suit the regimen of the industry, gradually metamorphose to emerge as mainstream. Sometimes they succeed in a financial sense, but is this trend in the long term best interestof the Australian tourism industry?
I hear you suggest 'why not just sell direct to consumers?'. The problem here is primarily one of cost, given that placing advertisements overseas is incredibly expensive. To give an example, the cheapest display advertisement in Conde Nast Traveler (a quality US publication) is approximately AUD$6,500. And don't forget to add the cost of brochures and postage for those people that respond.
While the various travel guides produced by the Australian Tourist Commission offer a somewhat cheaper alternative, we are still talking about running an awful lot of day tours to justify expenditure of that magnitude. And to cap things off, anecdotal evidence suggests that traditional print advertising generally produces very poor results in the case of soft tourism products.
The end result of this is that most soft tourism providers see catering to the inbound market as just too difficult, and have resigned themselves to servicing a largely domestic clientele.
Public resistance to paying realistic tariffs is another significant problem, and the situation is not helped by the need to build in commissions for others in the sales chain (see diagram).
While lots of travellers want soft tourism experiences, many are not prepared to pay for the extra 'value-added' that it provides. Indeed, the public perception is that soft tourism should be cheaper because it lacks the 'fancy overheads'. As a result I think we are seeing many soft-tourism operators offering tariffs which are unsustainably low, as they attempt to compete with the mainstream. Well sure, soft tourism operators don't face huge rent bills or lease full size coaches, but aside from that they face all of the same costs as the big boys (& girls). And in addition, the nature of soft tourism is such that it is far more time-consuming at every step of the service delivery process.
New technology may help
You would have noticed the computer terminal sitting on your local travel agents desk. So the tourism industry is already making good use of available technology then? Not exactly.
The technological backbone of the travel industry are global Computer Reservations Systems (CRS), the limitations of which include:
- there are many separate systems in use and they exist in competition with one another
- they are primarily a booking service rather than an information service
- they were designed for use by travel agents with specialised training, not for public access (if fact they can be so awkward to use that some travel agents will phone bookings through instead if it only involves a local call)
- they are used almost exclusively for airline, hotel and rental car bookings. There is virtually no use of CRS's for soft tourism-style products (primarily because of the costs involved)
Hence while there is extensive computerisation in place, to an innocent bystander like myself the whole set-up seems (gulp!) conceptually moribund.
A partial solution to this dilemma, given a little time, could be the Internet. Readers may be aware that the numbers of people using this network is skyrocketing and the demographics of users is rapidly broadening beyond the 15-25 year old male 'tech-heads'. From the tour operators perspective, the Internet could have many pluses including:
- providing a more cost-effective way to market direct to consumers, particularly foreign consumers, and the ability to dictate how your product is presented to them
- enabling operators to update details of their service on an instantaneous and ongoing basis (for example to include details of special events)
- enabling operators to provide a better service to other members of the travel industry
- providing the potential for significant reductions in operating costs in relation to brochure production and distribution, and other current marketing activities
In addition, the Internet is well-suited to the needs of the informed, information-hungry and 'do-it-yourself' modern traveller. The decreasing costs and increasing ease of use of the necessary hardware and software will really push this process along, and presents a stark contrast to the CRS approach.
By and large, the the CRS systems do not interface with the Internet. The one exception I know of is 'EasySabre', a version of the traditional global 'Sabre' CRS, which is available to CompuServe subscribers.
And in closing
In looking at the development of soft tourism we need to differentiate potential from on-ground reality. While there is significant demand for soft tourism experiences, this is mostly latent demand at this early stage. Don't be seduced by upbeat magazine articles on landmark ecotourism developments, whose fortunes are not representative of the rank and file operator in this sector. It's all very well to "talk things up", but not to the extent that we are ignoring very real problems requiring pragmatic solutions.
Indeed, reading the literature about soft tourism, and especially ecotourism, one could be excused for thinking people were writing about some kind of spiritual pursuit or a scientific experiment. We need to remember that soft tourism is first and foremost a business, and in fact, a very testing business.
The problems which tour operators face are typical to those faced by all small businesses (which have a very high failure rate), combined with the problems associated with establishing a new product in the marketplace. As I have shown, an added level of difficulty is brought about by the fundamental differences between the products they offer and the way in which the mainstream tourism industry, in which they must operate, works. One hopes that the ongoing development of the Internet will offer an effective way around this impasse, and ideally seeing Australia emerge as somewhat of a mecca for all forms of soft tourism.
The term "soft' and "hard" tourism was taken from Myriam Jansen-Verbeke, Catholic University at Nijmegen, The Netherlands, "Ecotourism: A Challenge for Future Tourism Development" in Proceedings of the World Leisure and Recreation Association World Congress, Sydney Australia 1991.
Since writing this article in 1995 there has been significant movement from the big CRS companies to interface with the Internet. Nevertheless the goal seems to be to get a slightly more efficient version of the status quo (ie. service the needs of the travel industry better) rather than remodel the system itself from the consumers perspective. This is hardly surprising given that the CRS's are owned by the mainstream travel industry (the airlines).
Bruce Bickerstaff Copyright © 1995 - 2002