AdTech Evolution | Visitor Economics 101

August 22nd, 2018

 
 
Take one down pass it around, 21 bottles of beer on the wall.
— LB

Thanks for tuning in.

This week. We put out a white paper.  A Case For Points-Driven Destination-Loyalty Networks. Here's a crazy idea. A network of destination-branded travel loyalty programs. What would that look like? Perhaps something like this:

 
 LUFT

LUFT

 

Why bother? Because the business of point loyalty is lucrative. Airlines and hotels do it because it works. If run with purpose, then destination-led programs could drive meaningful revenue for tourism offices, too.

How? By issuing points and then selling them at mark-up to hotels and local businesses - perhaps even the global hotel chains. We ran some preliminary numbers. They're looking pretty good. What would your DMO do with an extra million?

Something else to consider. The global travel industry is changing. Here is what it used to look like. The colorful circles represent destinations. The timing belt is the global value chain. Airlines and travel agents on the outside. Locally owned and run hoteliers, restaurants, shops, and tour operators on the inside.

The Network Model

 
 
 LUFT

LUFT

 

This is what the global travel industry is starting to look like. The overlapping circles represent the platforms on which we all now operate. Google, Facebook, Amazon - Expedia, Booking Holdings, Marriott, and Accor want to be platforms. Why? Because owning and operating real assets is expensive. Better to push local businesses into long-term franchise agreements, inject your propriety technology, employ locals, and voilĂ . Mailbox money.

The Platform Model

 
 LUFT

LUFT

 

Smart destinations should be in the business of defining and preserving place diversity. Smart tourism offices should be experimenting with new ways to stay relevant. Points-driven destination loyalty programs could work towards both objectives. Read the paper for more context. 

- Just one more graph.  

Local Economic Impact For Every $100 Spent

 
 LUFT rendering; Data: Main Center For Economic Policy. 

LUFT rendering; Data: Main Center For Economic Policy. 

 

The economic multiplier effect. Spending with local businesses is good for local economies. Why? Because revenue and profit like to travel up the value chain. Perhaps through the Cayman Islands before ending up in Omaha. Textbook stuff.

What if tourism offices could help channel that visitor spend toward local businesses, and then cash in on the margin to fund their agency needs? All while creating value for residents and locals. 

Doable? Yes. Hard? Perhaps not. Worth a shot? Why not. 

Stop by and learn about Destination-as-a-Platform. It's our latest strategic research initiative focused on empowering communities through travel. Why strategic? Because we want to see things get done. This is not fake research (more on that later). This is technology agnostic in your face research.

More to come. Thank you.

The AdTech Evolution



"Roads? Where we're going we don't need roads." - Doc