Half a million micro firms turn over 200 billion dollars and extra juicy profits up for grabs!
Once upon a time travel was about going there doing stuff and coming back. The key was… Where was there? The pulling power of the destination dragged the passengers in.
Now 50 years later the business has become bigger, ordered and homogenised margins are as thin as ever.
Ever a leader, TUI, with its 30 million or so pax, has morphed into something really interesting. No longer a tour operator, TUI has reconstructed itself as an experience-provider.
Why? Because they can, not only make much more money out of experiences, they can also own them. If you want a TUI experience (like a TUI cruise or a TUI hotel) there’s only one place you can go – that’s TUI.
In this way they can pick the best out of an astonishingly fragmented market - globally about 450,000 suppliers turning over some $200 billion - and give their clients great curated experiences backed up by TUI credibility.
So, their 30 million or so clients get to their destination with their holiday paid for, a wish to enjoy themselves on a new experience and money in their pockets.
This is a massive profit, branding and customer satisfaction opportunity. Look at the power that TUI has -
Their customers already trust them, TUI knows who they are and are already in communication with them, they probably already know what they want. They’re not out in the webspace looking for business - they know who their customers are, they are travelling with them after all.
The only competition is local excursion/experience suppliers (who TUI probably already work with) or internet suppliers like Airbnb and Tripadvisor who offer a random, un curated, un guaranteed range.
What a risk clients would take if they booked outside the box at this stage.
And it’s a massive financial opportunity too. Margins on experiences are much higher than the bread and butter of travel and accommodation alone. Plus with TUI it’s a branded value-added offer, no-one else can offer the same or as good.
On top of all that, TUI can use the experiences rather than the destinations to widen their brand appeal and pulling power.
So TUI starts 2020 as another kind of company entirely. Like in the 1970’s they have become more vertically-integrated and focused on fulfilling customer needs rather than competing in the rush to the lowest price.
The Experience Economy is a new world for tourism – one in which there are opportunities for all.
The Sustainable Tourism Report 2020 deals in depth with this subject and outlines the opportunities available for everybody. A limited number of review copies may be subscribed now at a 50% discount
CORSIA envisages 2035 as the date that airlines are compelled to take responsibility for their emissions - it is too late.
In 1947 after the war global economic activity needed to be kick-started hence the Chicago Convention was agreed by the UN which gave airlines everything they needed to prosper. They were to pay no tax on fuel or spare parts and everything was done to help them to expand
Success! They expanded beyond anyone’s dreams. Now, 73 years later they are still expanding and have fostered an industry which supports 10.1 million jobs directly - making planes, in airports, and operating airlines. The International Air Transport Association claims that airlines create $2.7trillion in global economic activity.
And the future is enormous - massive expansion is still forecast for the years to come as international travel increases apace.
However, in the seeds of their success there is also, now, danger. Obviously, air travel pollutes. Some 80% of tourism-related emissions come from air travel and, as international travel grows, this gets worse year by year.
Even though the airlines still claim the benefits of the Chicago Convention of 1947, they have used this authority to endorse their claim to fly free of carbon emission restraints. And they have powerful friends to make their case.
So, when the European Union sought to include intercontinental flights via Europe in their EUETS cap and trade system in 2012 (which has so far contributed to reducing the carbon footprint of the European aviation sector by more than 17 million tonnes per year), world airlines fought their case in court. Having lost the case, the airlines brought in their friends including the plane-makers like Boeing and the US government. They fought a full-on no-holds-barred battle. The result? After the set-to with the EU - it was agreed that an effective plan re global airline emissions was to be created by the ICAO (the organisation set up by the Chicago Convention). The plan was to be in operation by 2016.
The result is a plan called CORSIA, announced in 2016 which, to say the least, does not treat the situation as a climate emergency - here are its demerits:
The generally accepted tenet is “The polluter pays”
Airlines are polluting our atmosphere now. They need to pay immediately, not 15 years from now when the bill for the human race will be unpayable.
Whatever their benefit to the global economy as a result of expensive powerful lobbying they have kept their perks far too long and they should not add to them an emissions free ride.
Some airlines are coming up to the mark now - including Easyjet who are offsetting all their emissions now. OK offsetting is not perfect, but at least it is NOW not in 2035.
Maybe more airlines will be shamed into following their lead.
Air travel emissions are becoming a bigger and bigger issue - the subject is discussed in detail in the latest Sustainable Tourism 2020 ...It will take a truly objective view.
The Sustainable Tourism Report 2020 deals in depth with this subject. A limited number of review copies may be subscribed now at a 50% discount HERE
There will be a masterclass to discuss this and other sustainable tourism matters – location Bath, date 7 February. To register for a place just email email@example.com