Facing Disintermediation HK tourist facing the IT storm A discussion at HKU SPACE By Erwin Huang VP education, HKITF

Quick backgd: Erwin Huang HKIT Federation, VP of Education Committee IT, Media, Retail background Assisting the HK Tourist industry to react to IT changes for 8 years –Partially sponsored by HK.gov

Agenda Internet and the Tourist Industry –Born of the Knowledge Consumer –Disintermediation IT, Friend or Foe? –Sample Solution

A Paradigm Shift in the Tourist Industry

A Paradigm Shift Born of the Knowledge Consumer Internet as Disruptive Technology Disintermediation –Changes in the Value Chain = Potential Cut out of the Middleman What can we do? A new way of thinking…

Born of the Knowledge Consumer Free, Direct, Easy, Up-to-date Information flow through Internet Customer becomes more knowledgeable New Generation of Consumer with High spending power: Demand Value, Customization, Speed, Flexibility

Knowledge Customer Sample: Direct contact between the 3star Hotel in Budapest with the Traveler from Shatin in 1 minute

Disintermediation If all that a Tourist Agent is offering is: –Ticketing (due to access of proprietary information, e.g. flight availability.. Hotel vacancies..) –Lower price by cutting into agent discount A good chance that disintermediation will occur soon..

Are we DOOMED? So what shall we do? Are we DOOMED? IT Revolutions as a Disruptive Technology has the Potential to really hurt the sales of the Travel Agencies Esp. SME type agencies –Competing on Price –Convenience –Access to Proprietary Information Different environment Demands a Different way of Thinking Adopting Customer Oriented Systems and Business Flow

Panel Speaker Sun N Sea Holidays

Sun N Sea Holidays Using Web as Marketing tool Focus on a Niche Market Add Value/Service to the Customer experience List Management Recurring/Loyal Customer VIP Program? A CRM Program?

What is a CRM? CRM: Customer Relationship Management Think everything from the angle of the Customer Who are they? Where do they come from? What are their Interest? What is the spending level? How many family member? When is their birthday? Where do they want to go on Xmas? Easter? How much is she willing to spend? Predict what her needs? And offer products accordingly.. NOT necessarily a Computer System Definitely a System of Operation

Basic CRM Model for Tourist Industry Acquiring Customer Knowing your Customer Building Products, and Service Increasing Revenue

CRM: Creating the list and Protecting the list Your current custom, do you keep a list of their contact? Buying it? Typing it in from directories? Upgrading customer on the list? Protecting your list?! Mass mailing List Confirmed Real Customer Coming back Customer Loyal Customer

Understanding Customer-Centric Systems: HSBC Customer “Life-Cycle” When you are 12, your mother open your first Bank Account.. Your first HSBC account 15 your first ATM card… When you are 18, HSBC offers you your University Loan, or your first Credit card (even when you have no credit yet) When you are 23, HSBC will be your natural choice for your first Salary payment… then first Autopay 24, your first Tax 30 your first Insurance sales 34 your first house mortgage 35 plan for your first kid.. 35 your investment accounts 45 your retirement accounts etc…

Lesson from HSBC Know your Customer What do they want at what time? How much did they spend with you last year How to increase that? How does he think? What does he value? What Service does he want?

Shopping for CRM: Common Questions How do I start How much should I spent? How do I measure ROI? How to maintain the system? Can I export or import info? Is my data safe?

New Marketing tools Web 2.0 (Social Networking) –Extending into the Social Networking World –Even more segmented market –A better chance to understand your customer –The Long Tail opportunity Mobile Internet Solutions

Shopping for Web 2.0 Solution: Common Questions How do I start How do I catch on the Facebook wave and reach these users? How much should I spent? Do I need dedicated staff? How do I measure ROI? How to maintain the system?

Discussion Q + A Facebook: erwinhuang1 Slide available: Slideshare.net/erwinhuang