Keynote for travel tech 2016 on the impact of digital disruption on Tour Operators and some key actions they need to take if they are going to survive more than another 3 -5 years

1. #TTE2016
#TTE2016
“Transform or be disrupted”
Can the traditional Tour Operators survive?
Marco Ryan

2. #TTE2016
Social me: feel free to tweet & connect
@marcoryan
www.marcoryan.com
uk.linkedin.com/in/marcoryan
www.marcoryanphotography.com

3. #TTE2016
Early disruption focused on specific stages of the
Travel experience
Dream
Plan
BookExperience
Share

4. #TTE2016
What trends will cause further disruption?
Generation–n
IOT
Atomization of Apps Digital Transformation
SMAC Business models
Mobility
Design thinking

5. #TTE2016
Key trends; Generation-n
Generation-n
The “needs based” generation
Relevancy Simplicity Lifestyle Immediacy

6. #TTE2016
What “needs” are tour operators fulfilling?
Convenience?
Price?
Value?
Trust?
Scale?
Flexibility?
Are they still a match for the
changing needs of their
customers?

7. #TTE2016
Key trends: Internet of Things (IOT)
SO WHAT?
 Data now becomes an Asset, Analytics a
hygiene factor
 New business models based around solutions
& Partnering
 Drive increasing Customer expectations
around friction fee Experience
EXAMPLES
 Virgin Atlantic, Milton Keynes Council, RR,
BGas, Fitness First, Disney, John Deere

8. #TTE2016
Key Trends: Atomization Of Apps
SO WHAT?
 Increases revenue opportunities for new
Solutions/services
 Provides more micro-measurement opportunity
 Customers increasingly less tolerant of App
boundaries and poor integration.
 Increased complexity of Customer Ownership
 Challenges IT and Mobile Roadmaps
EXAMPLES
 Spotify, WeChat

9. #TTE2016
Key Trends: Design Thinking
SO WHAT?
 Emotional responses build loyalty. Design
thinking ensures products and services drive
high loyalty.
 Often Require cultural shift and sometimes
leads to organizational change
 Products are often simpler, more focused but
always more relevant
EXAMPLES
 Nest, Square, Disney, GE, IBM, Apple
Return to
your
original
use group
and testing
for
feedback
Test
Build a
representa
tion of
your ideas
to how
others
Prototype
Brainstorm
and come
up with
creative
solutions
Ideate
Construct
a point of
view that
is based
on use
needs and
insights
Define
Learn
about the
audience
for whom
you are
designing
Empathize

10. #TTE2016
Key Trends: Mobility & Smart Devices
SO WHAT?
 Device less important, emphasis now on
seamless experience across devices
 Increase reliance on Real-time analytics and
User Experience Design to make interaction
contextual
 Low tolerance for experiences that are too
generic or that create friction
EXAMPLES
 Natwest, Snapchat, Slack, Virgin America,
Uber

11. #TTE2016
Key Trends: Digital Transformation
SO WHAT?
 Needs CEO leadership to succeed
 Culture change is critical as Digital needs to be
pervasive across organization
 Fundamentally different from Digitization
 For many organizations failure to transform will
 Sometimes difficult to “change the wings of the
aircraft in flight”
EXAMPLES
 Axel Springer, Delta, Air New Zealand, Thomas
Cook

12. #TTE2016
Key Trends: The Rise Of SMAC
SO WHAT?
EXAMPLES
 Increasingly a “hygiene Factor” for digital
organizations
 Individually important, but when combined can
be both disruptive and differentiating.
 Implications for Data Protection and Cyber
Security
 Finally enables 1:1 marketing to be cost
effective
 Netflix
Social Mobile
Analytics Cloud

13. #TTE2016
Key Trends: Artificial Intelligence
SO WHAT?
 Can process unstructured data (e.g. Social
media)
 Success measured by ROI, Impact, new models
not on traditional IT measures
 Levels of investment requires partnering and
new ecosystems focused on solutions not on
traditional corporate boundaries
EXAMPLES
 IBM, Amazon, Microsoft.

14. #TTE2016
Where is the Disruption? Social Travel Agents
The ability to mix
crowdsourcing, expert insight
and professional services into
a collaborative solution
challenges Tour operators who
are hampered by expensive
retail footprint, that restricts
their agility, their profitability
and their relevance
Important because…

15. #TTE2016
Where is the Disruption? The Sharing Economy
New products and services are
being rapidly extended on
existing disruptive platforms
where the principle is about
sharing rather than owning at a
pace that the Tour Operator
cannot match
Important because…

16. #TTE2016
Where is the Disruption: Social Content & Trust
Reviews, Localized content
and services based on
Social trust that are
modularized and can be
integrated into different and
changing ecosystems,
undesigning the Tour
Operator’s value chain
Important because…

17. #TTE2016
What Are The Typical Characteristics Of A Digital
Enabled Company?
Talent and leadership
Supporting internal processes
Organisation
Internal collaboration across functions and high performing culture
Risk appetite regarding digital initiatives
Speed of decision making and agility of digital organization
Access of capabilities through external partnerships
Promotion of "test and learn" environment
Culture and
mindsets
Bold, long-term orientation
Ability to address customer need
Linkage to overall corporate strategy
Strategy
Digital content creation/innovation strategy
Digital customer experience application
Decision making/data analytics
Technology infrastructure and growth management
Automation of customer activities and back office
Overall capacity and channel usage
Capabilities
Which Tour Operator
can claim to match
up to this?
Copyright 2016 McKinsey & Co

18. #TTE2016
Tour Operators are evolving … but slowly
Tour Operator 1.0
• All About manual and analogue
processes
• Product led
• Focused on Operations
• Little or no digital initiatives
Tour Operator 2.0
• Silo’d organization
• Legacy IT being addressed
• Operationally efficient
• Fragmented Digital initiatives
• Basic CRM
• Main Focus on AR revenue
• Beginning to adapt
• Some new products and services
Tour Operator 3.0
• SMAC compliant technology
• New Organization model driving
cross-functional projects
• Operationally efficient, but with
increasing focus on Lifetime
Customer Value
• Clear digital Roadmap and
coordinated digital plans
• Single View of the customer
• Data and Analytics driving insight
and performance
• Agile to changing Customer needs
• Design thinking driving new
products
Tour Operator 4.0
• Fully connected for all stakeholders
• “Smart” Culture of real-time
operations & insight led actions
across all functions
• Friction free experience between
channels ,devices and locations
• New Organization model
• Operationally efficient, Commercially
mature
• Digital core competency across
organization
• Single View of the customer
• Customer needs at heart of a new
ecosystem of digital partnerships
• Deep understanding of Customer
Lifetime value
“Legacy/basic”
“Agile /Digital”
“Smart Tour Operator”
“Adapting /Digitizing”

19. #TTE2016
What strengths and weaknesses do Tour
Operators typically exhibit?
• Legacy Systems
• Poor data management
• Analog culture & largely Product focus
• Non-digital leadership in Board and C-
Suite
• Listed companies
• “Rumsfeldian” denial about disruption
• Belief that their historical strengths are
enough to deter disruption
Historical strengths and yet also historical weaknesses

20. #TTE2016
Analog
Traditional
channel Silo‘d
Digitising
Multi-channel
monologue
Digital
Omni-channel
dialogue
Tour Operators & The Digital Tipping Point

21. #TTE2016
What Should Transformation Mean To Tour
Operators
TALENT: Bring in digital talent at all levels, especially for succession
planning at the top. Shareholders and investors must hold the
board more accountable to digital progress
DATA: Treat data like a Balance Sheet Asset. Invest,. Use, audit and
understand its value
TECHNOLOGY: Partnership, open & scalable systems are key
CULTURE: Challenge the Silos and “Product /Yield” mindset
DIGITAL: It is not a function or a team, it is your future. Make it pervasive.
DESIGN THINKING: Lead with Customer Experience and Needs. Products should be
simpler and more relevant to Customer
COLLABORATE: Get your head out of the sand and look for new disruptive
partnerships

22. #TTE2016
Conclusion – Can Tour Operators Survive?
... but we are at a tipping point. Tour Operators must
• Increase digital boldness in the boardroom
• Create a “Data/Analytics first” culture
• Instill Design thinking as a core behavior
• Really – DEEPLY – understand customer needs
• Dramatically change their technical & product agility
(especially around customer data)
• Pursue innovative and disruptive partnerships
YES
and
NO
… or be disrupted

23. #TTE2016
Thank you
@marcoryan
www.marcoryan.com
uk.linkedin.com/in/marcoryan
www.marcoryanphotography.com