The Internet Revolution, The Internet Revolution, a Threat or Opportunity for the Hong Kong Tourist a Threat or Opportunity for the Hong Kong Tourist
Industry?Industry?
Erwin Huang,Councilor HKITF,
Project Leader, Sector Specific Program, Travel Industry, HKSAR, OGCIO,
Deputy Chairman, TSL Jewelry Ltd.Chairman, Digital Life Institute
AgendaAgenda
• Background of Project• Market Changes, Opportunities and
Pitfalls• Lessons Learnt
Project BackgroundProject Background
– HK Government, OGCIO Dept Sponsored Project, SSP project for Tourist Industry
– Study IT Adoption of one of the Pillar Industry in HK– From Office Automation to Paradigm shifts
• What is the Tourist Industry?– Depends on who you ask..
Defining the Tourist IndustryDefining the Tourist Industry
• Inbound Travel Agent• Outbound Travel Agent• Ticketing• Hotels• Airlines• Retailers • Tourist Service Providers, Restaurants, theme parks..
1400 Companies, mostly SME’s
The Last 10 yearsThe Last 10 years
• Achieved almost 100% ICT adoption• GDS based (Global Distribution System) Business
model– B2B electronic booking system
• Travel Ticketing– Airlines, Trains, buses, car rental, Hotel, Tour..
• Almost 100% Internet enabled
The InternetThe Internet
• Threat or Opportunity?– 10-15 years back, the value offered by Tourist
Agents are Information based• With the Advent of the Internet
– Free and Instant Information flow– The Rise of the Knowledge Consumer
• Direct Purchase between the Hotel in Budapest from your home in 3 minute– Exploration– Comparing– Booking Availability– Purchase, Discount– Done!
The Knowledge Customer Example:The Knowledge Customer Example:
Disintermediation Disintermediation
• If all that a Tourist Agent is offering is:– Only Ticketing (due to access of proprietary information,
e.g. flight availability.. Hotel vacancies..)– Commodity Product: Forced to Lower price by cutting
into agent discount• A good chance that disintermediation will occur
soon..
A Paradigm Shift A Paradigm Shift
• Change of Consumer behavior• Disruptive Technology: Internet• Value Proposition
– Shift from Information holder, to Service provider
CRMCRM
• Better Service through Better Products through better knowing your Customer
• Provide Personalized products/service to consumer at the right time and the right price.
• Build Loyal, Recurring Customer base• Tools:
– List Management, VIP programs, Point/Barter System, Direct marketing tools, Membership based Webshop..
CRM Example CRM Example
• http://www.sunnseaholidays.com/en/
Sun N Sea HolidaysSun N Sea Holidays
• Using Web as Marketing tool• Focus on a Niche Market: the Long tail for SME
travel agents• Add Value/Service to the Customer experience• Keep Loyal, Recurring Customer..
Challenges aheadChallenges ahead
• A Race to change business model• Redefine Products/Services/Values for the
Knowledge Consumer• Opportunities to use ICT to help change model
– Tourist CRM systems– Advanced B2B system for information exchanges– Advanced Web Applications– Effective Direct Marketing tools– Mobile technology to provide faster/better service..
Successful Government Successful Government Sponsoring ModelSponsoring Model
• HKITF role as a facilitator• Pulling Industries together
– IT Industry as supplier– Tourist Industry (mostly SME) with Collective
Demand• Help Explore new business models of
products• Not Direct Subsidy
APEC cooperationAPEC cooperation
• CRM, basis for better Inbound/outbound coop
• VIP club system encourages recurring sales• Better Document exchanges through
standards• Service level Alignments
Summary:Summary:
• Internet revolution– Born of the Knowledge Consumer
• Danger: Disintermediation• Paradigm Shift to the whole industry • New Business model basing on Value Added vs
Control of Information flow• CRM model• Opportunity: Longer term business based on Value
Added and Customization of Service
Q and AQ and A
Thank you!HKITF Enquiry : (852) 3101 8197Email : [email protected] : www.hkitf.org.hk