How can tourism profit from digitalisation?

During his presentation last week at the World Tourism Forum Lucerne about how to keep Switzerland relevant in an ever-competitive marketplace, Jurg Schmid, CEO of Switzerland Tourism, said that one of the most popular options holidaymakers take these days is a digital detox. A chalet with no wifi is often near the top of the list of desires.

I’m sure there are a good number of people working in the travel industry who regularly dream of such luxury, as they try to keep up with the latest digital innovation, a competitors’ fancy new app, or yet another online platform to master. However, according to Jon Erni, Director of Public Sector at Microsoft, for a tourism business to thrive in today’s market, it’s vital to embrace digital with gusto. Talking at the KKL conference centre, the venue for the Forum, he urged tourism companies to embrace the growing number of online tools that do such things as finding and retaining customers, analysing data, converting leads to sales, providing reservation and e-commerce systems, and much more.

The tools are becoming ever-more sophisticated, notably in the areas of online travel aggregators (OTAs) and meta-search engines. Erni, like many prominent in the industry, sees the role of digital technology rapidly changing from being a driver of marginal efficiency to an enabler of fundamental innovation and disruption. It provides unparalleled opportunities for value creation and capture, but is also a significant source of risk.

The travel and tourism industry has been at the forefront of digital disruption, transforming the way people travel. Whilst keeping up with developments can be a struggle, Erni said that companies should welcome disruptions of the existing tourism model. He pointed out that small start-ups are so succesful - and in turn can greatly disrupt large, established companies - because they understand digitalisation and know how to use the online platforms so well.

You have to include Generation Y

«You probably don’t know 90% of the online platforms that your customers engage in», he said. «Find out what those platforms are and you’ll engage with more customers. There are tools today that help you find out where your customers are. Big brands use tools of the last century. If you want to attract the newer generations you need a mixture of the policies and tools that attract them to your company.»

«Today the babyboomers are managers of companies, and they will soon retire. If you don’t include Generation Y in your structures now, it won’t be good for the future. The next generation of companies will have new priorities.» Travel providers are ever-seeking stronger interactions with customers, and connected devices and artificial intelligence will increasingly help, and enable collaboration and asset-sharing between enterprises.

Digitalisation is also expected to contribute to a more and more sustainable industry footprint through innovations in efficient resource use. Also at the Forum, Swiss Federal Councillor Johann N. Schneider-Ammann added: «Digitalisation by far offers more chances than risks. It reconstructs opportunities and should end up offering additional jobs, welfare and insight. Digitalisation can create new forms of cooperation and boost it.»