Access the main content

Interviews

Interview with Joël Gangnery, Managing Director Hotel Catering Franchise & Tourism Division of Reed Expositions :" Internet has decompartmentalized the tourism professions "

Organizer of Top Résa in Deauville, the annual meeting place for all the travel actors, Joël Gangnery looks carefully at the evolutions of the tourist industry. He observes the strong influence of the Internet on the activities of every actor in tourism, opening new horizons, even though it shuffles the ancient business models.

{{HTR Magazine: How to you analysed the growing use of Internet in the tourism field?J. G.:}} It must live with a recurring problem: the weakness of margins. Most companies, including tour-operators, are not sufficiently capitalized and have difficulty dealing with a severe blow. The hotel industry manages to correct this problem, on the one hand by opening the capital of the companies wider and by selling some assets, and on the other by developing commercial partnerships. The tourism industry’s actors will find ideas and development opportunities at Top Résa, demonstrating the formidable interaction between the different activities.Joël Gangnery:}} The role of Internet in the travel world is fairly old. For almost ten years the purchases on the net have impacted the tourism economy and forced operators to adjust. It is true that recent technological developments, the automatic update of Internet sites and Home pages on individual computers, and new functions allowed by new languages have provoked a modification of users’ behaviours. The users are now more "expert". This new stage, more or less identified under the term Web 2.0, leads to new developments.{{HTR: Is the proliferation of blogs, linked to the travel world, part of these developments?J. G.: }} The phenomenon of blogs is parallel. It is popular among the French who like to share their experiences, to form communities of ideas. It’s a new way to sustain the associative spirit that has been very lively in France for a century. The only difference is that this information is more largely available. It circulates more easily and is less influenced by the regular commercial circuits used by the tourism industry. Tourists or tourists to be now have the means to educate themselves through other travellers without going through the classical commercial networks{{HTR: On a broader perspective, how have you seen the world of travel evolve these past years?J. G.: }} There is one thing I find very symptomatic and that is a phenomenon of decompartmentalization. Previously we lived in a fairly organised market, with a vertical structure starting at the tourist destination with its actors, tourism providers, suppliers of tour-operators that created packages, which were distributed through the High Street travel agencies. Today, this vertical market structure has literally exploded. It still partly exists, but every component of the structure now works outside its former territory. The High Street travel agents deal directly with hoteliers and carriers. They are starting to make their own customized tourist products independently or by using the functionalities of dynamic package. Tour-operators are more active in direct sales and "de-structure" their own packages to address the needs of their individual clients, using the flexibility brought by the new tools of electronic bookings. Internet has decompartmentalized the making and the distribution of tourist product. In distribution the result is called "multi channel". The tour-operating industry has not yet found a precise and universally accepted term, but it could be called “industrial customization”.{{HTR: How does that translate at Top Resa, an ideal platform to observe all these changes?J. G.:}} We are seeing some strong indications of these phenomena. Today, the fastest growth among the exhibitors’ categories is among the operators of tourist destinations, such as hoteliers and incoming agencies. The hotel section of Top Résa is constantly growing and will present over fifty hotels and hotel chains, with all the major leaders exhibiting directly. Incoming operators, hosted on the stands of tourist destinations, are increasingly numerous. These links, which were once integrated into the production chain by tour-operators, now want to come out into the daylight. There is a real rise in strength of the incoming actors, hoteliers and carriers selling direct, alongside propositions of tour-operators that nonetheless continue to progress.{{HTR: What about the carriers?J. G.: }} Airlines are also making a big comeback within the show. There will be almost fifty of them, alone or within marketing alliances, presenting their products to travel agents which continue to be important consultants for their clients even if commercial relations have significantly evolved, resulting in the near-disappearance of sales commissions.{{HTR: Are these big changes in favour of the development of tourism?J. G.:}} For some time, I thought this decompartmentalization would only bring confusion to the market and that the consumer would not find what he is looking for, nor benefit from it. I thought that the multiplication of offers, of all kinds and all tariffs, would lead to a big headache when it came to choosing the right supplier. Finally, I must admit that clients seem to find their way around, certainly because they learned how to use the Internet fast. It is not so sure that they always make the best choice and that they will not occasionally stumble over the inevitable risks in the sea of offers…. but they enjoy building their own trips, and sometimes for a lower price than the classical circuit. It is like an amateur cook who would like to create his own recipe using various ingredients selected on a large market. The final result is not always a big success, but there are also “divine surprises”, original associations of flavours. The cook takes pride in tasting his own creation. Moreover, yesterday the travel agent could only sell packages, today he can also build a customized circuit.{{HTR: Do you believe that the tourist destinations are more active?J. G.:}} This is another strong element regarding Top Résa in recent years. It translates into the massive presence of new destinations. For the next edition, we will be able to present the whole of Latin and Central America, the majority of Asian countries, including some countries that are making a comeback, such as Japan. The diversity of clients’ tastes and easier access to those destinations, once limited, bring them to meet the travel agents, in order to grow still marginal tourist flows into broader traffic.{{HTR: Do the geo-political upheavals have an impact on the travel flows?J. G.: }} If we put aside the question of income, we experience a phenomenon of communicating vessels. When part of the world is in trouble, other destinations take over very fast. Nowadays, the Middle East is shaken with repercussions on Egypt in particular, so Asia is back on track. After the tsunami, it was Latin America, the Caribbean and Africa that seized a larger share of the market. This is even truer when economic growth is steady in the outgoing countries. Unfortunately, it is not always the case so the compensation is not perfect.{{ HTR: The GDS, former heavy weights of travel distribution, suffered a time from the rise of the Internet, but apparently they are back in business and going strong…J. G.: }} These GDS have not only accompanied all the phenomena we just described, but they made easier access to information and to bookings possible. The transformation has been from a strongly vertical and centralized model of electronic distribution, via the GDS, to a very decentralized and segmented model more in keeping with the needs of bookings. It is a chance for tourism development because the whole tourism supply is practically available through one electronic channel or another, and with an easier flow of information. Internet technology was like an explosion that blasted the centralized model. But the GDS are back at the wheel, opening all the channels and disposing of a lot of restrictions.{{HTR: What will happen tomorrow to the travel agencies?J. G.: }} The evolutions are strong and will not stop. The Reed Group manages trade shows in information technology and telecommunications and we may observe the convergence of several worlds. Thus, information and travel bookings, once conveyed through cables, will use waves tomorrow to gain in autonomy and mobility. The travel sector will be one of the first users of the technological mobility to allow clients to make bookings or to present them associated products like video clips of sales and promotion.{{ HTR: Does this threaten the existence of travel distribution in its present form?J. G.:}} As always, it will adjust, and certainly pretty well. I don’t know of a trade that hasn’t succeeded in adjusting to new ways of consumption. The opticians of today have nothing in common with the ones we knew when we were young, they exist in a different format, sometimes in associated chains. There will be disappearances as in any mutation, but travel distribution has already evolved in both shops and on the Internet. The consumer has a double need for contact, physical and at distance, which travel agents are able to meet perfectly. The difficulty lies in adapting “while walking”, without bringing business to a halt. This is very demanding but necessary. The best example is the way travel agents have fairly well managed the drop of commission on airline tickets.{{HTR: Can we expect other necessary evolutions in a similar vein?J. G.:}} Everyone is expecting that the tour-operators will follow the trend and inflect their commissions in function of the level of commitment of travel agencies. For the latter, the response lies in diversifying their sources of revenue, in producing their own products sold 24/7, in a clever blend of direct contact and Internet distribution. That is why we stage two conferences at Top Résa, opened to everyone, on the multi-channel process and the search for new revenues by travel agents. In a context of stronger maturity of the customer it is obvious that the level of the commercial relationship must progress. Clients are much better prepared than before and more demanding.{{HTR: Is the tourist industry strong enough to face the changes?J. G.:}} It must live with a recurring problem: the weakness of margins. Most companies, including tour-operators, are not sufficiently capitalized and have difficulty dealing with a severe blow. The hotel industry manages to correct this problem, on the one hand by opening the capital of the companies wider and by selling some assets, and on the other by developing commercial partnerships. The tourism industry’s actors will find ideas and development opportunities at Top Résa, demonstrating the formidable interaction between the different activities.

Loading...

You have consulted 10 content. Go back home page or at the top of the page.

Access next article.

Sign up to add topics in favorite. Sign up to add categories in favorite. Sign up to add content in favorite. Register for free to vote for the application.

Already signed up? Already signed up? Already signed up? Already registered?