Tourism and mobility, an organic link
From the inspiring vaults of Notre Dame, to the travertine consoles of the Colosseum, to the endless sandy beaches of Ostend, to the sound gates of Berghain, passing through the vertical village of La Défense… Whether for leisure, business, culture, oriented nature or architecture, solidarity or ecological, tourism around the world has many facets and actors.
From the generosity of these facets a reality emerges: to contemplate the tourist will move.
It will glide on the foaming spray of the seas, rise in the rarefied oxygen of the air, plunge into the earthy depths of the subways, tossed from side to side in a crowded bus, tirelessly covering the kilometers l opposing his curiosity, he will take a multitude of unknown paths to satisfy his thirst for culture and dazzling to arrive safely.
Tourism and mobility appear organically linked by a multitude of factors.
Tourism and mobility, a historical link
Mass tourism certainly owes a lot to the industrial revolution, to the general rise in living standards and to the generalization of paid holidays, but it would never have reached its current scale without technological and economic advances in the transport sector [1 ]. This is particularly visible through the air, with the generalization of jet engines [2], then the adoption of computer reservation systems [3] (American Airlines adopted the Global Distribution System (GDS) Saber in 1962), and finally, the arrival of low-cost (South West in the United States, since 1973 [4]), which has really turned the link between distance and cost upside down, moving from linear to discontinuous: we travel further for less when traveling closer was synonymous with economy.
Tourism and mobility, a strategic link
Taking advantage of the advancement of transport, tourism has emerged as one of the key sectors of the current economy. Today, tourism represents 10% of global GDP, generating 340 million jobs serving 1.3 billion tourists around the world (+ 7% in 2017) [5]. Anticipating this exponential development, States and world economic organizations (IMF) quickly adapted to promote the “tourism development” of territories from a mobility point of view.
The construction of the Fenestrel tower at La Grande Motte in 1969. Source: Le Nouvel Obs, 2017
Thus, in parallel with the massification of practices observed from the 1960s, the territories have evolved, by highlighting their offers (nature, culture) and by rethinking their development and town planning policies in connection with mobility to attract and welcome the thousands of tourists arriving. A very French example wasthe development of the coast of Languedoc-Roussillon [6] (la Grande Motte), with the Racine mission in 1963, aiming at the establishment of a tourist pole of 6 groups in order to confuse tourists from the Côte d’Azur and Spain to Languedoc. 3 billion Francs were allocated to the mission for the creation of 500,000 tourist beds on 180 km of coastline, by investing in major infrastructure projects, including roads, ports and car parks [7].
Tourism and mobility, two sectors exposed to intermediation
Beyond this historical vision, the interdependence between mobility and tourism is even more striking with regard to the importance of the customer relationship.
Establishing, animating and enriching this relationship is an essential and vital component of the creation of wealth and the viability of the economic model of the actors in these sectors. Controlling this customer relationship is the reason that pushes many external players to intervene in the historical trades of transport and tourism players, revealing a second link that they share: the risk of intermediation .
This intermediation is not new. Travel agencies initiated this mechanism by combining local offers with those of carriers as early as 1845, thus capturing part of the relationship that each actor had with their end customers. The most famous example remains Thomas Cook, who by bringing together offers of boats, hotels, restaurants and trains, organized trips for the English from Peterborough to Egypt, Italy, Germany and even the United States as early as 1866. [8].
1866: first tour of the agency in the United States
1959: a London agency
2018: the group generates £ 7.8 billion in turnover, has 19 million clients per year and 22,000 employees in 16 countries
This reality did not initially worry transport and tourism operators for a good reason, illustrating a third link that transport and tourism players share, and all the more so at the time: their structure. costs. The packaged offer was generally limited to accommodation, catering and maritime or rail transport. The common point of these 4 activities is the importance of their fixed costs: whether the customer is present or not, the constituent elements of the offer remain to be financed: walls, materials, equipment, salaries, minimum supplies, etc. It is only from a certain volume of customers that the activity will become profitable. Attracting as many customers as possible is therefore vital and the occupancy rate is constantly scrutinized for improvement. The players in these two sectors therefore had every interest in collaborating with an intermediary who plays his role by promising to be able to increase the occupancy rate by offering an additional distribution channel.
“When these platforms arrived, they went to see them, guaranteeing them a 10% increase in attendance at their establishment in exchange for a 6% commission. The hotels all applauded ”[9].
Sébastien Bazin, 2014
It is different with current disintermediation mechanisms, as the case of Booking in the hotel industry clearly illustrates. The applause of the hoteliers Sébastien Bazin speaks of was justified: Booking’s promise in the 2000s was more or less the same as those of travel agencies 150 years earlier, to bring in additional clients, participating in the increase in attendance and amortization of fixed costs, through the penetration of an under-exploited customer segment: those who book on the internet, like international customers at the time.
The interface of the Bookings.nl site in 1997, 2 years after its creation, acquired in 2005 by Priceline for 133 million dollars. In 2019, the market capitalization of the group, now Booking Holdings Inc., exceeded 80 billion
With this promise, the wolf entered the fold.
Since then, on the customer side with the digitization of the economy, behavior has changed. The share of this hotel clientele coming from the Internet, initially seen as a simple “plus”, has become the majority:
- In the hotel industry, 60% of sales come from the internet [10]
- Mobile represents 31% of web visits and drains 17% of online reservations [11]
- Tourism has become the 3 rd item of e-commerce expenditure behind clothing and cultural products [12]
On the supply side, hoteliers may have learned English since 1850, but not necessarily the Internet. In 2018, “the optimization of the reception site” is still the priority of the “major projects for 2018” of the actors of accommodation, transport and leisure according to the Observatory of decision-makers of e-tourism [ 13] ahead of “mobile” and “the redesign of the Web order tunnel”.
Result of the 2018 Next Impact survey conducted on 166 tourism stakeholders including TO, accommodation providers and agencies relayed by Echo Touristique
Playing on its strengths (mastery of digital) in this ultra-buoyant context, the wolf was not satisfied with the sheepfold: he monopolized the entire meadow until he built his den around it. .
“We don’t force any hotelier to work with us” Darren Huston, ex-CEO of Priceline (ex-Booking Holdings), 2016.
However, an independent hotelier is free or not to open his reservation channel to Booking.com. However, when 60% of reservations are made by internet, it is mandatory to exist on this channel. This existence passes in priority by the referencing with the search engines, whose algorithms link criteria and selected keywords. Difficult thing in an environment where competition is strong on each destination. The alternative is if not to buy positions to go up in the suggestions made to the customers, but here again the hotelier has difficulty in competing with its competitors and especially the distribution platforms themselves.
How on this basis can an independent hotelier therefore compete in terms of visibility? Independent hoteliers, like the majority in Europe [14], are therefore becoming dependent on Booking in the digital age. It is from this skill gap, which creates dependency, that Booking has taken advantage to deepen its domination by increasing its commissions on taking reservations. This went from 6% to reach 25% and fall to “an average of 15%” [15] currently according to Gilian Tans, CEO of Booking Holdings thanks to the intervention of the State (law Macron [16]).
This attempt at domination, which manifests itself in the increase in commissions, is less present for hotel chains which, by the size of their offer, are essential partners of digital platforms. From this size, they derive bargaining power making their relationship with digital players more balanced: one brings the offer, the other an additional footfall, and in all cases each needs the other. As Sébastien Bazin very well pointed out 5 years ago:
“None of the major global hoteliers can compete in digital distribution. But they don’t want to kill the hoteliers either. The question is to define the cost of the service rendered. [17] » Sébastien Bazin, at Le Monde in 2014.
To stop seeing this “cost of service provided” reduce their margins, tourism players have responded. In the digital field, Accorhotels tried to respond by launching its marketplace in 2015 to throw in the towel two years later. The reasons given: a conversion rate that is too low and the obligation to “invest more to improve online referencing” [18] [19] which illustrates our previous point. Booking, by the size of its budget devoted to SEO, has created a barrier to entry into its market. Accorhotels did not stop there and launched many other projects: diversification into new services, creation of new brands, investments, acquisitions, recruitment… Recruitment from elsewhere like the links between transport and tourism, Accorhotels having recruited 3 directors who worked for SNCF since November 2017 (Franck Gervais as Director for Europe, former CEO of the Voyages-sncf.com subsidiary, Gilles de Richemond who is the former technical director, Maud Bailly, the current chief digital officer of Accorhotels, also worked for the SNCF group).
The battle against intermediation is not lost, but the facts speak for themselves. Today, Booking is the most profitable multinational in the Netherlands, with a profit margin of 33% ahead of Heineken, Shell or Philips. The company claims 28 million housing units and generates a turnover of 12.6 billion dollars with 673.1 million room nights booked in 2017 [20] [21] [22].
However, Accorhotels still has one asset to re-appropriate the customer relationship: customer reception and the knowledge that results from it. By working on profiling, loyalty and personalized service, Accorhotels has a chance to bring the customer back into his reservation fold and thus stop the nibbling of his margin by intermediaries. However, Booking, by controlling the reservation, also takes control over the customer’s personal data: the commodity at the heart of the profiling, personalization and loyalty strategy that Accorhotels seeks to carry out.
The battle for customer data is therefore declared between those two players. However, this greed is a phenomenon that is not at all foreign to the world of transport, as this quote from a RATP manager illustrates, about their customer data and their openness to a recognized digital player, Citymapper. :
“ If we let them use it for free, we risk going through what hotels have gone through with Booking.com and losing our relationship with our customers. »Franck Avice, director of service and customer relations at RATP, 2016 [23]
London-based company founded in 2011, Citymapper, publishes a multimodal route optimization application recognized for its ergonomics. During 2016, the company is looking to make its way towards access to RATP’s real-time data.
However, in terms of intermediation, RATP is no stranger to risk: it had already had to counter CheckMyMetro, which wanted to access its data in 2011. Success for RATP, which forced CheckMyMetro to reposition its activity [24].
This time the opponent is tougher.
Unlike CheckMyMetro, Citymapper has the law on its side. Where the State has shown itself to be a protector on the tourism side with the Macron law in 2015, protecting hoteliers by calling into question Booking’s price parity principle, it was more encouraging on the mobility side with Axelle Lemaire’s digital law in 2016, which asks public transport players to share their data in real time [25]. Claiming this right in 2016, Citymapper ended up bending the RATP in 2017.
Then, Citymapper is not of the same size: founded by a former Google executive, the start-up raised 40M € in 2016. Today valued at 350M € [26], it has several prestigious investors within it.
Citymapper is therefore not just any intermediary. First, because Citymapper is not satisfied with this interfering position, illustrating the fact that the risk of intermediation in mobility and tourism can take several forms. Capitalizing on its in-depth knowledge of London mobility flows, the intermediary has come to encroach on the activity of the traditional carrier to become a direct competitor. Citymapper began by investing in the London day and night bus market, two consecutive failures, before recently reorienting itself in on-demand taxis [27]; Ford has also occupied a niche with its London shuttle service since July 2018 [28]. These private players, coming to fill in the shortcomings of public operators, through the sporadic opening of lines in the most profitable segments, make the border between public and private mobility even more fragile.
If Citymapper benefits from such a high valuation, while the free application generates no income, it is not only for the creation of a transport activity but above all for the valuation of the data collected.
“ What we have, which is really interesting and valuable, is information about mobility in a city . » Azmat Yusuf, Citymapper CEO London TechCrunch Disrupt, 2017 [29]
Knowing the mobility flows of a city, valuable information ? Citymapper and its investors are far from being the only ones to think so, as evidenced by the development of a multitude of applications (Moovit, Moovel, etc.), as well as the interest of another player that we know well: Booking , finishing to illustrate how the challenges of tourism and mobility are linked.
“ Booking wants to play a role in the regulation of mass tourism (…) We have all the data to help big cities to better distribute and manage flows . »Gillian Tans, CEO of Booking Holdings
The historical and strategic links between transport and tourism are numerous and this common heritage has naturally brought the actors of the two sectors to come closer . The emblematic attempt at a union between Air-France-KLM and Accorhotels has shown this [30], a project to which Accorhotels finally returned despite the confirmed potential for synergies (the use of Air-France customer data in particular, loyalty program for Accorhotels). Air-France-KLM has also ended its referencing partnership with the hotelier (proposed flight + room package) in favor of Booking, whose volume of offer is much greater than that of Accorhotels (2 million against 5,000) [31].
In view of these attempts at partnerships and mergers, the tectonic plates of the two sectors seem destined to converge, but how far will these movements go and how will they materialize?
Certain current elements make it possible to outline a possible answer without closing the field of possibilities of the equation. First of all, there is a constant: the customer variable and the latter’s ability to pay for an enhanced service (simpler, faster, more adequate). Then, the players have long understood the interest of working together, in particular through partnerships, which meet the customer’s need for simplicity and speed. Could we witness the birth of a “seamless” journey + experience type offer, with a “Mobility + Tourism as a Service” model? To see a total synergy between transport and tourism, one main condition, which brings unknowns in terms of governance, strategy and technicality is necessary: customer data must be shared more equally. Gold,We can see that a common denominator to these questions of partnership, simplicity, speed and data sharing is currently being invited to the discussion table of actors from both worlds: the blockchain.
“With blockchain technology, our ambition is to revolutionize exchanges in the travel industry” Sonia Barrière, Deputy Managing Director Strategy and Innovation of Air France-KLM [32]
Indeed, on the mobility side, and with the aviation sector in particular (players who, as we have seen, are among the most agile historically in the transport sector), there are many demonstrations of interest in this technology at Air-France, Lufthansa, Cathay Pacific, IATA [33]…
On the tourism side, seeing rather at the crossroads between the two sectors, an emblematic initiative attracts attention: the birth of Winding Tree. The company is developing a decentralized market platform based on blockchain technology dedicated to booking hotels, tour operator activities and flights [34]; it has already forged partnerships with several world leaders common to both sectors: Air-France and Lufthansa in transport and TIU Group in tourism [35] …
The upheaval brought about by digital, as Patrick Sayer, director of Eurazéo recalled, is an “innovation stimulator”, the “wake-up call” that it was time for the players concerned to hear , and with which they must now come to terms.
This is the raison d’être of a consulting firm to help each economic player to succeed in an increasingly complex ecosystem. Especially since thousands of jobs depend on the survival and economic success of traditional employers in mobility and tourism.
From the study of common issues, common responses can emerge.
To better address these sectors organically, historically, strategically and structurally linked, PMP has merged its two practices in order to better help our clients meet the challenges that lie ahead.
Also find our articles on these two sectors as well as cross-reflections!
Lucas tierny
[1] Erkan Sezgin and Medet Yolal (2012). Golden Age of Mass Tourism: Its History and Development, Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies, Dr. Murat Kasimoglu (Ed.). URL: http://cdn.intechopen.com/pdfs/35520/InTechGolden_age_of_mass_tourism_its_history_and_development.pdf
[2] US Centenal of Flight Commission (2018) The Opening of the Commercial Jet Era, URL: https://www.centennialofflight.net/essay/Commercial_Aviation/Opening_of_Jet_era/Tran6.htm
[3] Hotel Electronic Distribution Network Association (2010 ) URL: http://corsi.unibo.it/emt/documents/hedna%20final%20april%2030%202010.pdf
[4] Columbia Business School (2008) Low-Cost Carriers: A Force for Globalization and Growth:
https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/2817/Low-Cost%20Carriers%20 -% 20A% 20Force% 20for% 20Globalization% 20and% 20Growth.pdf
[5] La Croix (2017) https://www.la-croix.com/Economie/Monde/Quelles-solutions-face-tourisme-masse-2017-08-07-1200868125
[6] France Culture (2018) : https://www.franceculture.fr/emissions/entendez-vous-leco/les-vacances-de-mrante-eco-34-mise-en-tourisme-du-territoire
[7] L’Indépendant (2013) : https://www.lindependant.fr/2013/06/19/il-y-a-50-ans-la-mission-racine-faisait-emerger-une-autre- cote, 1765834.php http://lagrandemotte-architecture.com/la-mission-racine-un-projet-pharaonique/
[8] Thomas Cook (2018) URL: https://www.thomascook.com/thomas-cook-history/
[9] Le Monde (2014) URL: https://abonnes.lemonde.fr/economie/article/2014/12/07/sebastien-bazin-accor-booking-et-expedia-ne-vissent-pas-tuer- les-hoteliers_4536173_3234.html
Source of illustrations:
Pinterest, 2019, https://www.pinterest.fr/pin/409898003565360994/
Blog I love trave, http://ilovetravel.ro/fr/thomas-cook-si-povestea-primei-agentii-de-voiaj-din-lume/l
ThomasCook, image library, https://www.thomascookgroup.com/imagelibrary
[10] L’Echo Touristique (2018) URL : https://www.lechotouristique.com/article/digital-les-priorites-2018-des-acteurs-du-tourisme
[11] L’Echo Touristique (2018 ) URL: https://www.lechotouristique.com/article/digital-les-priorites-2018-des-acteurs-du-tourisme
[12] Quotidien du Tourisme (2017) : http://www.quotidiendutourisme.com/tendances/voyages-en-ligne-les-reservations-en-france-ont-explose-en-10-ans/149218
Challenges (2018) : https://www.challenges.fr/economie/consommation/e-commerce-comment-les-francais-depensent-80-milliards-d-euros-sur-internet_565581
[13] L’Echo Touristique (2018) : https://www.lechotouristique.com/article/digital-les-priorites-2018-des-acteurs-du-tourisme
Illustration: Next Travel (2013) : https://www.travelnext.nl/de-succesvolle-weg-die-booking-com-heeft-uitgevonden/
[14] Wanup Loyalty Center (2017): 73% of hotel rooms in Europe are sold by independents. URL: https://www.wanup.com/loyaltycentre/fr/quel-avenir-et-quelle-strategie-pour-lhotellerie-independante-en-france/
[15] Les Echos (2018) https://m.lesechos.fr/week-end/gillian-tans-la-femme-la-plus-puissant-du-tourisme-mondial-0301466258072.php
[16] Les Echos (2017) : https://www.lesechos.fr/17/03/2017/lesechos.fr/0211888709190_booking-com—–il-nya-plus-de-conditions-sur-les-prix– the-hoteliers-do-as-they-want & # 8211 ; .htm
[17] Le Monde (2014) : https://abonnes.lemonde.fr/economie/article/2014/12/07/sebastien-bazin-accor-booking-et-expedia-ne-vissent-pas-tuer-les -hoteliers_4536173_3234.html
[18] Les Echos (2017) : https://www.lesechos.fr/08/11/2017/lesechos.fr/030845753711_accorhotels-renonce-a-commercialiser-d-autres-hotels-sur-internet.htm
[19] Le Figaro (2017): http://www.lefigaro.fr/flash-eco/2017/11/09/97002-20171109FILWWW00298-accorhotels-renonce-a-sa-plateforme-de-reservation.php
Illustration: Bloomberg – l’Echos: https://www.lecho.be/entreprises/horeca/sebastien-bazin-pdg-d-accorhotels-nous-aurions-du-racheter-booking/10066436.html
[20] L’Echos Touristique (2018) : https://www.lechotouristique.com/article/booking-nous-voulons-couverte-toutes-les-briques-du-voyage
[21] Les Echos (2018) : https://m.lesechos.fr/week-end/gillian-tans-la-femme-la-plus-puissant-du-tourisme-mondial-0301466258072.php
[22] BFM (2017) : https://www.bfmtv.com/operations/actu-partenaires/conso/hotellerie-la-reservation-en-ligne-a-le-vent-en-poupe/
[23] Illustration: Les Echos (2017) : https://www.lesechos-events.fr/event/marketing-digital/culture-client-2017/#fndtn-intervenants
[24] French Web (2016) : https://www.frenchweb.fr/open-data-citymapper-veut-faire-plier-la-ratp/237986
[25] Les Echos (2015) : http://m.lesechos.fr/redirect_article.php?id=021834237979 In addition, the encouragement of public transport companies to share their data (via the adoption of a ” code of conduct ”) was already present in Emmanuelle Macron’s law on growth in August 2015
[26] 20minutes (2014) : https://www.20minutes.fr/paris/1455527-20141007-check-my-metro-application-dit-o-controleurs
[27] Financial Times (2018) : https://www.ft.com/content/7a798068-1664-11e8-9e9c-25c814761640
[28] Reuters (2018): https://www.reuters.com/article/us-ford-chariot/after-london-launch-ford-to-start-chariot-minibus-service-in-sixth-us- city-idUSKBN1FL4HK
[29] Business Insider, 2018 : http://uk.businessinsider.com/citymapper-generate-revenue-2017-azmat-yusuf-2016-12
[30] La Tribune, 2018 : https://www.latribune.fr/entreprises-finance/services/transport-logistique/devant-l-inertie-de-l-etat-accorhotels-renonce-a-enter-au- capital-d-air-france-klm-786258.html
[31] La Tribune, 2018 : https://www.latribune.fr/entreprises-finance/services/transport-logistique/air-france-accorhotels-en-revait-booking-com-la-fait-791591.html
[32] Illustration: Air France KLM, 2018 https://www.airfranceklm.com/fr/actualites/air-france-klm-ajuste-son- organization
[33] Travel On Moove, 2018 https://www.tom.travel/2018/06/28/sita-invite-acteurs-de-laerien-a-explorer-potentiel-de-blockchain/
Forbes, 2018 https://www.forbes.fr/business/pourquoi-air-france-klm-sinteresse-a-la-blockhain/
Cathay Pacific, 2018 https://news.cathaypacific.com/cathay-pacific-group-leverages-blockchain-technology-powered-by-accenture-to-launch-asia-miles-marketing-campaign-180139
[34] Travel On Moove, 2018 https://www.tom.travel/2018/06/28/sita-invite-acteurs-de-laerien-a-explorer-potentiel-de-blockchain/
[35] Forbes, 2018 https://www.forbes.com/sites/bernardmarr/2018/12/07/the-amazing-ways-tui-uses-blockchain-to-revolutionize-the-travel-industry/#257328541e7f
