14 Oct

Panos Paleologos, “Strategies and Tools available to increase the number of visitors from emerging markets”

 Mr Panos Paleologos, Founder & CEO of HotelBrain, Guest Speaker @ the Mediterranean Luxury Travel Summit 2013, 7-8 October @ Divani Apollon Palace. So, what is his point of view expressed in the Summit, regarding  the strategies and tools available to increase the number of visitors from emerging markets?

IMG_16251-600x399Mr Panos Paleologos speaking @ Mediterranean Luxury Travel Summit 2013

 

Tourism is changing as Europe weakens as a result of the economic crisis.

Globally, the tourism industry – worth an estimated $1.15 trillion last year – is expected to grow by between 3 and 4 percent in 2013, driven by up to 6 percent higher visitor numbers in emerging markets, according to latest estimates from the UN World Tourism Organisation (UNWTO). World tourism in 2012 reached to one billion travelers. Most of the traditional tourism markets slowed down and took a dip for the first time in 2008 and 2009 due to the global recession. Tourism sees growth in Europe, the world’s No. 1 tourist destination, slowing to 2 percent or holding steady at 3 percent as the region’s debt and financial crisis rumbles on. Germany’s federal tourist association BTW forecasts growth of just 1 to 2 percent this year due to the uncertain economic environment.

Greece has long been a popular destination for people from Germany and Britain. It’s now also an attractive holiday spot for an increasing number of tourists from China, Japan, Korea and Eastern European countries. Well over a million Russians and another million of Turkish travelers are expected to visit this year. The latest projections for the year as a whole put the number of foreign visitors to Greece at 17.5 million, with revenues totaling 11-11.5 billion euros.

 

So, What are the emerging markets in tourism? 

Tourism growth in the future will come and be led by the BRIC (Brazil, Russia, India and China) countries. While advanced countries provide the tourism base, future growth will lie in emerging markets like the BRIC countries (Brazil, Russia, India and China).

Emerging markets like China and Russia will continue to be the main driver of growth for international tourism. With international travellers projected to almost double by 2020, to approximately 1.6 billion, the most significant increases are expected to take place in markets like China, India and South-East Asia. Eastern Europe completes this picture, followed by the Latin American and finally African markets. These markets are often referred to as “emerging markets”.

The travel potential of travel and tourism’s top emerging markets:

  • Brazil
  • China
  • India
  • Russia

Other Important Emerging  Markets 

  • Turkey
  • South Africa
  • The United Arab Emirates
  • Eastern Europe
  • Belarus
  • Bulgaria
  • Czech Republic
  • Hungary
  • Moldova
  • Poland
  • Romania
  • Slovakia
  • Ukraine

 

The combined number of visitors from Russia and Turkey – emerging markets for Greek tourism – is likely to reach 2 million this year, with all-time highs for both countries. The initial forecast for the number of Russian tourists this year stood at 1 million but this is now being revised to 1.2 million. Their number was up 37.6 percent in the January-May period, more than in any other competitor country destinations, such as Spain, Turkey or Cyprus. In the April-July period it was 252,900, exceeding even arrivals from Germany, which totaled 222,070. This is also encouraging in terms of the projected revenues, as each Russian spends about 1,000 euros on average while on foreign trips – slightly more than the average German tourist – when the average visitor to Greece lays out about 560 euros.  A further increase of up to 30 percent in the number of Russian visitors may be realized next year. The respective projection for Turkish visitors is up to 800,000, who may not stay as long as the Russians but spend considerable amounts on food and drink. The combined number of Russian and Turkish visitors three years ago was about half of what it is today. The growing trend has been greatly helped by an easing of requirements for visas.

Turkish visitors in particular this year chose to celebrate the end of Ramadan at destinations in northern Greece and on islands close to the Turkish mainland. A pilot program of easier visa requirements for Turkish tourists – who mostly come for two or three days – applies this year for the Dodecanese islands of Rhodes, Kos, Kastellorizo and Symi.

 

So what do we have to do to increase the number of visitors from emerging markets

SERVING THE CUSTOMERS:

  • Understanding needs and motivations. Travelers from emerging countries will have different patterns and will be more about sightseeing and itineraries that see places rather than staying by the pool or the beach for a couple of weeks.
  • Serving the customers and their requirements: Emerging markets often have different needs from others. For example Chinese visitors like warm rather than cold water whilst Asian prefer rice for breakfast and often Chinese food is must. Many travelers from Emerging markets do not speak English so speakers of their language may be a requirement

DEVELOPING DEMAND

  • Creating and raising awareness through public relations, branding and positive images being communicated across different channels
  • Abode the line and bellow the Promotions is also essential mainly at the beginning to introduce Greece to these markets and encourage purchases  
  • Political agendas and political support is essential as often governments have a strong influence on where travelers choose to go especially from some developing countries 
  • Social Media for building demand is critical and understanding which media is relevant or forbidden for each location is of paramount importance. For example Facebook and most of the google suite is blocked in China whilst RenRen and Weibo are the dominant social media. In Brazil Orkut is much bigger than Facebook
  • Facilitating conferences, meetings and incentives will not only drive business tourism but will also attract visitors to experience the country with the view to return for leisure

 

INDUSTRY STRUCTURE

  • Accessibility and air lift are critical : Need direct flights from emerging countries airports to Greek destinations.
  • Land and Sea transportation is also critical for the planning and execution of trips especially for emerging markets that are more likely to do island hoping and many destination itineraries
  • Information for planning is also critical to be reliable in multiple languages, updated, relevant and helpful to facilitate the planning and purchasing of tourism products
  • Understanding Distribution channels and key players : Most of emerging markets still operate traditional distribution channels and few tour operators may control the entire market. Understanding the key players and working with them can make the penetration more effective
  • easing of requirements for visas: is of paramount importance for travel facilitation and for enabling emerging market visitors to arrive without complications. Making clear Visa rules, using efficient visa centres and managing the process rapidly has direct effects.
  • Manage protests and airport strikes is critical for the image of Greece and for people to no longer afraid that their vacation will be disrupted

GENERAL GOOD TOURISM INDUSTRY PRACTICE

  • Sustainability (social, economic and environment) is more important than ever, addressing issues such as energy dependency, climate change adaptation and mitigation,  green economy, congestion management and risk management
  • Satisfying the changing consumer: more experienced and demanding customers, demographic change (ageing, migration and diversification of family structure), changing values and lifestyles, from service economy to experience economy, etc.
  • Enhance competitiveness by shaping an adequate business environment: innovation, diversification of products, markets and segments, product development, ICT and technology in general, marketing and promotion, research, evaluation, human resources development, quality, etc.

Greece needs to respond dynamically to emerging source markets while maintaining a critical market share in traditional markets (Germany, Britain). We need a balanced portfolio of clientele to take advantage of seasonality, price sensitivity, collective revenue management and maximizing the positive impacts of tourism.