Portugal,5th June — President of ITSA, Prof. Alastair M. Morrison make a presentation on IAST panel discussion on “Positioning and price”
In the tourism and hospitality sector, how may the price variable be driven upwards in times of low occupancy (demand shortage) and economic contraction?
Should innovations in the tourism industry focus on “on line” sales/touristic destinations sites?
Here the comments by Prof. Alastair M. Morrison:
Consider positioning before pricing
Strategy-wise, positioning should be considered before price and not vice-versa. Positioning is an important part of a destination’s/business’ tourism marketing strategy and represents the image that the destination/business decides to communicate to its existing visitors and potential tourists. It is also the foundation upon which a destination/business brand is developed. Just for the purposes of clarity, positioning is not a slogan or strapline; although it is a good practice to distill a positioning statement into such.
Develop new experiences rather than products
Nowadays when considering positioning, it is vital that the old practices of tourism product development be discarded and we think about markets in a more contemporary way. Today, people (tourists) buy experiences, not products! The Algarve website identifies 9 products: sun and sea; golf; meeting industry; residential tourism; health and wellness; culture; family tourism; nature tourism; and sport (with the first four being classified as the major products). In future, a strategy of defining the unique experiences that visitors can have in the Algarve should be the strategy – and the Signature Experiences Collection ® program of the Canadian Tourism Commission is a great model to follow.
Strengthen the destination branding of the Algarve
A great destination branding approach needs to follow after the best positioning strategy is determined. The Algarve has a cute slogan as “Europe’s Most Famous Secret” but if this is a reflection of its destination brand, it is not strong enough and does not communicate meaningful differences to the market.
Focus on yield and not price
The first question should be rephrased since this is not just a micro- level challenge for hotels and other operators; it is a macro-level issue that needs to be dealt with at a whole Algarve destination level. So it is suggested that “How may the price variable be driven upwards in times of low occupancy and economic contraction?” be revised to “How can the Algarve attract higher yield tourists year-round and especially outside of the high seasons?” The answer lies in diversifying the experiences on offer and the origin market portfolio, as well as making more effective use of online marketing.
Diversify origin market portfolio
The official website for the Algarve identifies 11 major origin markets (UK, Germany, Ireland, Netherlands, Spain, Scandinavia, France, Italy, Canada, Poland, and Russia). With the exception of Canada, these are the traditional north-to-south tourist markets from Europe. This portfolio is a “too-many-eggs-in-one-basket” approach and especially when the European region is beset with difficult economic circumstances. Moreover, the seasonal flow patterns from these origins tend to be quite similar. The Algarve definitely needs to diversify its origin market portfolio and like major destinations worldwide the BRICS (Brazil, Russia, India, China, and South Africa) countries should be assigned a high priority (see VisitBritain Brazil tourism market strategy milestones below for guidelines on what to do for that group). After these five, some of the N-11might be considered (e.g., South Korea, Turkey, Mexico, Indonesia, etc.)
Improve and emphasize online marketing
The second question about “tourism industry innovations” asks if online marketing should be a focus of innovation and the answer is definitely “yes.” Having viewed the present destination website for the Algarve, it is definitely in need of improvement and more language versions need to be added including Russian, Chinese, Korean and Arabic.
The Algarve is already using popular social media channels including Facebook, Twitter and YouTube, but it should be more innovative in how it uses these channels and will need to add other sites when it diversifies origin markets. For example, several of the world’s leading tourism destinations have used crowdsourcing (based on their own residents or visitors) very effectively including Australia, Canada and New Zealand. If targeting markets such as China, the Algarve will require a presence on the most popular “domestic” social media such as Weibo.