Businesses with a strong online presence have a 20 per cent higher revenue than those who don’t – no wonder the 2018 World Tourism Day focuses on digital transformation and ‘Digital transformation’ is the latest buzz phrase around the corridors of power and not just in a marketing sense – it is much more far-reaching than that.
But what does digital transformation really mean and how can any size business harness continually changing technology to shore up business growth that is sustainable? How does innovation relate to digital transformation? The term ‘innovation’ is arguably the most overused yet misunderstood word in the business vernacular today.
In this article I will explore the concepts of digital transformation and innovation and share my recent experiences interpreting their application in regional tourism businesses.
What is digital transformation in the Tourism industry?
Digital transformation is defined as the realignment of, or new investment in, technology, business models, and processes to drive new value for customers and employees, and more effectively compete in an ever-changing digital economy.
Digital transformation is not about technology in and of itself. It is about the fact that technologies which are digital (as opposed the old method of transmitting and storing data which is analog) are allowing people to solve their problems.
From apps to software and everything in between, people are living their lives – and running their businesses – with digital technologies.
Digital is helping people solve traditional problems in new ways. And the new ways are, more often than not, better than the old ways, with more cost effective – and efficient – solutions. Take for example the advancements in infant vitals monitoring equipment in the form of socks so parents can be alerted when their at-risk infant’s breathing becomes irregular. A life-saving digital transformation to solve a human problem. As a tourism example we were excited to observe Next Hotel’s innovative refurbishment and the inclusion of app based self check-in, keyless entry, in-room lighting control and room service ordering all via the app.
How can tourism businesses apply digital transformation?
The majority of small and medium travel and tourism businesses are in catch-up mode with their customers, as consumers are embracing digital tools to improve their lifestyles and the tech companies are investing heavily in new product innovation to remain in the top performing businesses world-wide. Quick turnover of mobile devices and relentless development of software and data systems are conditioning consumers to be more digitally engaged than the businesses they want to buy from.
I tried to buy a gift voucher from a favourite Melbourne restaurant for my daughter for her birthday, but I could only get it if I physically went there, 2,000 kms away. The $200 sale went to a competitor who could generate the voucher digitally from their website…I never had to pick up the phone and that’s just what I need given my busy lifestyle.
When we run digital business training workshops for tourism operators it is consistently the case that 90% of the people in the room want to learn more about social media, websites and google search to improve their business and they have not had their minds opened to the opportunities available to them to improve their product for their customers or improve their processes for their staff. In our experience the success factors of a business can be in the main (and we estimate 90% influencing factor) attributed to the quality of the product and customer experience as compared to their marketing and there has never been a stronger argument for this belief than today with the high level of transparency that businesses live with. 92% of people trust peer reviews about businesses ahead of what the business says about themselves and their advertising.
So whilst adoption of digital for marketing is mandatory for all businesses today, what owners and boards have to do is start with a blank sheet of paper and develop a genuine understanding of:
- who their customer is
- what problems they can solve for them
- how they add value to their lives
They then need to map the entire journey of their customer from dream, plan, purchase, experience to share and critically assess those multiple pathways to identify how their customers experience their products and how they interact with their people and assets. Through this creative process, at all times staying in the minds of their customer and how they experience the journeys, they will identify opportunities to improve interactions and in many cases digital transformation of the processes in the business will be the answer.
- It can be simple things like a mobile app for guests to self check-in in advance for a tour and at the same time identify any special needs and acquire their agreement to insurance requirements and social media content.
- For accommodation providers it could be creation of video walkthroughs with augmented reality so your ideal customer can visualise themselves in your rooms and the great experiences you offer at your location.
- Imagine a dinosaur museum that uses virtual reality and projection mapping to bring their models to life, out of the ashes from eons ago!
- Our population is aging and older travellers have specific needs…what digital tools can you provide to them to make it easier to learn about your product? Have you got video and audio content on your website that they can play, rather than reading all the information; do you have floor plans and detailed information about the accessibility of your product for people who don’t move as easily as they used to.
- If you’re a tour company are you designing a tour for the older market, that still see themselves as quite youthful, but aren’t so limber and could have their tour experience enhanced by great story telling content on their iPad that they can enjoy rather than walking the entire distance or needing to ascend steep climbs?
- Or simply you just need to make it easier to buy from you…what obstacles are you putting in the way of the 50% of people who are visiting your website from a mobile device? Can they easily find the information they need and a mobile friendly booking option so they can give you their business directly. Because if you don’t offer this, your online travel agent does and does it well, and you’ll pay them 15% to 25% commission for the privilege of securing business for you.
Customer experience is at the heart of good digital transformation and this is supported by a clear and deep understanding of your customers’ needs, pain points and how you can add value to their lives.
How does innovation in tourism relate to digital transformation?
Digital transformation is the part of the iceberg that is above the surface and innovation is the strong foundation beneath the surface that causes the business to move forward.
Innovation is a culture in the business that is driven by the owners and board and empowers staff at every level to challenge the status quo.
A business that is innovative allocates resources in terms of staff time and dollars into research to stay on top of opportunities for their industry; they have a process that allows ideas and solutions to be brought to the management team for testing and development; and they tell their staff that it is ok to fail as long as they fail quickly and learn from that experience.
All of the people who are members of the online learning hub www.TourismTribe.com demonstrate qualities of having an innovative culture in their businesses as one of the hallmarks of an innovative culture is a hunger for learning and an openness to share ideas and knowledge. Tourism Tribe is a genuine peer-to-peer community providing access to tourism operators across the world who ask questions and share their experiences to help like-minded operators and they all have access to a continual training calendar of online workshops and hundreds of online resources to keep developing their digital and business capabilities.
In our own business one of our values that underpins our business plan is a “relentless commitment to continual learning” because we know that we can’t keep innovating and taking advantage of smart digital solutions for the benefit of our clients unless we do this…it’s tiring, but we know it’s what will keep us at the front of the curve in terms of the services that we offer the industry.
Digital transformation enables product innovation and creativity
So whilst an innovative culture is required in business to successfully implement digital transformation, innovation is also an output of digital transformation. Innovation of products, services, experiences and marketing will occur as you work through the customer journey mapping process and challenge the status quo. You will uncover creative solutions to customer and staff problems and the entire process is creative, stimulating the minds, energy and motivation of all involved.
Ultimately you will open your mind to potentially a whole new way of delivering your services or you will identify some minor changes that you can implement quickly to gain a marketplace or fiscal advantage.
Your customers are transforming the way they want to do business and you need to this as well if you want a sustainable, growing business that meets the changing needs of your customers.
There is help out there – there are plenty of government grants on offer, as well as communities such as Tourism Tribe, a genuine peer-to-peer online learning environment for tourism businesses all over the world.
Tourism Tribe is an award-winning leader in business improvements in the tourism industry with a vision to help those in tourism have a sustainable business and make a profit doing what they love, no matter where they are located.