Friday, November 27, 2015

Tough homework for tour operators as marketing goes online

WITH tourists increasingly preferring to shop for tour packages online, Tanzanian tour operators find themselves faced with an uphill but inevitable task of adapting to online marketing techniques. The most important global trend in marketing is the changing of consumers’ shopping behaviour towards heavy use of online marketing tools and online sources of information and reservation systems, notes Devota Mdachi, Acting Director General of Tanzania Tourist Board. This trend necessitates tourism related businesses in the supply side to be competent computer literate in particular the use of internet, development of catchy website contents and regular updating of the contents. Tanzania has over 200 tour operators registered under the Tanzania Association of Tour Operators (TATO) based in Arusha. They compete in the market to cater for some 1.2 million tourists arriving annually, according to latest official statistics. Tour operators seriously realise the importance of online marketing. “There is no question that online marketing is currently the leading way of getting tourists from abroad,” notes Mishely Ivan, Operations Manager for Dar es Salaam based White Lion Tours Ltd, one of the fastest growing tour companies in the country. Keen to move with time, the TTB has just launched an ambitious strategy to market Destination Tanzania. In collaboration with private sector through Tourism Confederation of Tanzania (TCT) the board has developed a new five year International Marketing Strategy that focuses on a few selected markets and highlights use of the information superhighway. Says Mdachi on the strategy: “It highlights the use of digital and online marketing techniques which have been given high importance.” But how fast are tour operators in Tanzania evolving in order to use the latest and most effective techniques in the online marketing era? Not fast enough, at least according to the TTB official. Notes Mdachi: “For sure, the majority of tour operators are less competent in adapting to this global consumers trend.” But there is a catch to this. Like in many distribution channels for service and product delivery, the middleman is well-established in the tourism business, to a large extent screening off local tour operators from directly accessing to tourists abroad. International tourism marketing business is monopolised by a vast network of multinational tour agents, big companies with extensive global networks. According to Ivan, the agents promote themselves extensively in Europe and America, the leading sources of tourists jetting into Tanzania. “Foreign tourism agents for instance in the Netherlands have access to extensive TV coverage where they advertise for up to seven times a day”, he says. Ivan points out that a good website is essential, but notes that it is not enough. “After designing a good website, the website must be advertised on TV. 

You don’t just design a website and wait for tourists to log on to it. However good it is, if it is not aggressively promoted no tourists will even know about it, let alone visit it.” He notes that expertise in websites is needed. Yet to get a very good design cost up to two thousand dollars, “It should be the best website,” he notes, although he instantly says two thousand dollars is expensive for small tour operators. Ivan continues: “The foreign tour agents don’t advertise us in any way, they simply promote themselves as the gateways to the preferred destinations. After getting the customers and closing the deals they forward them to tour operators in Tanzania and elsewhere.” Ivan notes that it is a great challenge for tour operators in Tanzania, because they don’t have direct access to the tourists. Despite it being difficult to have direct contacts, the truth is that all successful companies in Tanzania have tour agents abroad. To advertise online one must go to Europe, and hook up with TV and radio stations. “Then you need to pay a lot of money to have a lot of adverts, and you can only do so that by purchasing a large airtime package.” This situation, he notes, necessitates tour operators to have a very large capital. The situation is made complex by the fact that most Europeans prefer to shop online from domestic agents, because first they feel very secure and second for the very reason that they feel comfortable when contacting someone they feel are closer to them. Says Ivan: “That is where the biggest marketing challenge lies, most of the tourists don’t shop online straight from us. It is very rare to find a tourist who logs into a website and charts direct with a tour operator in Tanzania.” From his experience, he says over 70 per cent of the deals are closed through agents. However, this online marketing challenge affects mostly smaller companies, which cannot raise the large capital needed for traveling and advertising. This has crated a sort of divide among the tour operators in country. Says Ivan: “You find that automatically, Tanzanian tour operators are divided into two: the big companies that rake in huge profits and the smaller companies that struggle to survive.” And there is a trickier twist to the middleman’s affair with online tourism marketing. Bigger and well established tour operators in Tanzania who are connected to international agents get discounted accommodation rates form some hotels. As a result of this arrangement, which in tourism circles is dubbed ‘contract pricing’, they are able to quote lower prices in their packages and enjoy competitive advantages. “We cannot compete with them because our packages that we send to agents will be dearer,” says Ivan, noting that in some case the price differential is s large as USD 60. He notes that accommodation is the crucial component in tour package pricing, because other charges like transport are relatively uniform across the board. Pack and camping fees, which are paid to Tanzania National Park, are fixed. It is debatable if contract pricing here amounts to unfair competition. The big tour operators get discount by the virtue of the large number of tourists they take to the hotels. The large number of hotel reservation is a fruit of connections to tour agents and advertising, which themselves were shouldered by a larger capital base.
SOURCE: Daily News

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