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8/12/2019 Business Model Pres to AB 6th Nov Final
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BUSINESS MODEL
TOURISMlinkFood for discussion
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SITUATION
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Travel distribution chain (2010)
AirlinesHotels
RestaurantsComplementary offer
Car rentalRail
Tour operators
Cruise linesDMC
GDS
OnlineB2B
platforms
B2Cplatforms
Traditional agentsOnline agents
Network agentsTMCs
CustomersLeisure
Business
Suppliers Distributors Customers
DMCwebsites
Direct
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Simplification of distribution value chain
Magicbox
Suppliers Distributors Customers
AirlinesHotels
RestaurantsComplementary
offerCar rental
RailTour operators
Cruise linesDMCs
Traditionalagents
Online agentsNetwork agents
TMCs
GDSOnline B2Bplatforms
B2Cplatforms
DMCwebsites
Direct
CustomersLeisure
Business
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OPPORTUNITY
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Value proposition Source Markets
Travel agents
Tour operators
Access to niche market, destination by destination, including SME
s. Access to all complementary offer, not only accommodation Creation of new and differentiated products for specialized customers Automatic process Reduction operating costs (less mistakes) Business intelligence module An authentication system for participating suppliers and distributors A settlement system
Easy access to large market through only one channel, including SME
s. Access to all complementary offer, not only accommodation Creation of new and differentiated products for specialized customers Automatic process Reduction operating costs (less mistakes) Business intelligence module An authentication system for participating suppliers and distributors
A settlement system
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Value proposition Destination Markets
Accommodation
Complementary offer
Added value services (basic PMS, CRS, channel manager, business intelligence) One technical integration with various distributors; channel manager. Access to niche market and to complementary offer; possible creation of dynamic packaging Brand and channel control
Business Intelligence, market knowledge An authentication system for participating suppliers and distributors A settlement system
Added value services (basic PMS, CRS, channel manager, business intelligence) Basic PMS and CRS tools for SME
s One technical integration with various distributors; channel manager. Creation new and high value product Access to new markets and niche Business Intelligence Customer and market knowledge An authentication system for participating suppliers and distributors
A settlement system
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Potential EU market (Eurostat 2010, ECTAA 2009)
Accomodations**: +/- 150.000
Distributors***: +/- 70.000
Complementary Services****: +/- 200.000
(*) Add 400.000 Farm and Village Tourism presents in EuroGites (28 countries)(**) hotels, apartment hotels, motels, roadside inns, beach hotels, residential clubs, rooming and boarding houses, tourist residences(***) Travel agents and tour operators(****) Restaurants, cafes, museums, natural parks
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BUSINESS MODELS
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Distribution models
IDS/OTA ( eDreams, Expedia, Booking, Lastminute) Strong positioning in the online market Intermediaries between hotel and customer Net rates and commission-per-reserve Access to own external web
GDS (Amadeus, Worldspam, Galileo) Sales tourism services (flight, hotel, train, rent-a-
car) Sales through travel agencies (online/traditional) Connection between the suppliers
reservationsystems (airlines, hotels, rail companies, rent-a-car)
and the distribution Commission to services provide r
CRS (Keytel, Transhotel, Hotelbeds) Offer reserves system to hotels Manage hotel inventory Commission-per-reserve or flat fee for adhesion
Branding/ Management group (LeadingHotels, Worldwide Independent Travel Network )
Differential mark for independent hotel/travelagencies (quality mark or management group)
Adhesion to brand image and satisfy quality standard More pressure to negotiation
Commission and annual flat fee Own reserves central
Infomediaries (Kayak, Tripadvisor, Trivago) Intermediaries between info provider and info
consumer Complex search to adjust specify needs client Revenue per advertising and sales
Innomediaries ( Groupon, Letsbonus) Clients community Potentiate interaction between customer and
enterprises Offer daily discounts by price to your members Ensure client maximum volume until limit
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Example business models (cont.)
MicrosFidelio (PMS) : license cost + monthly fee to hoteliers
Google: advertising
National Tourism Board: public money
Expedia, Booking (OTA): commission or mark-up from hoteliers per booking
Rate Tiger (Channel manager): license cost + monthly fee to hoteliers
Trivago (Infomediaries) : commission or mark-up from OTA
s per booking
Hotelbeds (CRS): commission or mark-up from hoteliers per booking
Amadeus (GDS) : Commission from hoteliers + compensation Travel agents
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Business model options
Option 1 Option 3Option 2 Option 4
Amadeus Google
Commission: Expedia Booking
Fix fee: Rate tiger Microsfidelio
Group on
Trivago Google
Travel Open Apps BookNorway TOURISMlink
(2012-2014)
distribution
companies pay
services providers
pay
both operators
pay
DMO public pay
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Option 1: Distributors pay
Operators distributors (travel agency, tour operators, IDS, GDS, OTA,TMC) pay by offered services. Examples:
* adhesion fee* access to platform
* transaction fee* delivered reserve fee* flat fee* commission-per-reserve delivered* new technology services* support services
Normally distributors don
t pay for platform access, nor fee and commissionper reserves. Only for technology, support services and advertising (Google)
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Advantages/disadvantages
- Time to market. It
snow or never. Otherswill do it.
- Incentive forproductivity
- Difficult to implement-Strong competition forfree business models
Advantages Disadvantages
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Option 2: Services providers pay
Services providers (accommodation, restaurant, destination web andcomplementary offer) pay by offered services. Examples:
* adhesion fee * access to platform
* transaction fee * reserve fee * flat fee* commission-per-transaction * new technology services* support services
* buy distribution tools (PMS, channel, CRM, Yield)
Fees and commissions are paid by services providers normally
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- Hoteliers are used to it.- Extremely reduced cost
(Standard, Open source, Saas,cloud) for innovative technology
- Small fee or small commission- Simple to manage (fee
s).- Time to market. It
s now ornever. Others will do it.
- Another intermediary with noadded value for technological
developed hotels.- Focused on SME with low
technological tools, witch aredifficult to reach.
- A lot of tec. standards in everycountry.
- Strong competition for maintechnological players thatdevelop tech. tools
Advantages Disadvantages
Advantages/disadvantages
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Option 3: Services providers and Distributors pay
Services providers and distributors pay by offered services. Examples:* adhesion fee* access to platform* transaction fee* delivered reserve fee
* flat fee* commission-per-transaction* new technology services* support services* buy distribution tools
Fee
s and commissions are paid by Services providers, anddistribution companies pay for technology / distribution tools
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- Hoteliers are used to pay - TA are not use to pay for
platform access- Difficult to implement.- Need to show
technological valueadded
Advantages Disadvantages
Advantages/disadvantages
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Option 4: DMO (public money)
Public institutions like Valencia Government pay for building up thesystem and maintaining it in the beginning. Examples:
Travel Open Apps BookNorway Tourismlink
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Option 5: Private sponsors
Private sponsors (DMO or enterprises) pay for particular services likespecific B2B marketing support
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- Pay for interestingservices or customservices
- Market / commercialrisk- Not sustainability
model
Advantages Disadvantages
Advantages/disadvantages
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OPEN DISCUSSION