Mobile & Web Hotel
Revenue Management @en

From Income Tourism To Tourism P2P?


21 December 2011 at 2:03, by

Viajar, Armin Cifuentes; Flickr.

The impact of the network society and digital culture on tourism should not be understood to mean simply that the Internet is one channel more, but rather that it is bringing about the transformation of business models, largely because of changes in the flow and dynamics of information access. Digitalization is not only replacing, but transforming the marketplace.

These dynamics of information access, that we previously illustrated as the “funnel of information model”, had a key variable in the previous model: the control over information allowed for the fabrication of an artificial scarcity that awarded monopolistic power to create business models based on securing income.

However, in the network society, as Juan Urrutia puts it so well, the tendency is one of dissipation of “perpetual” income towards a model of permanent innovation that is incentivized strictly by short-lived income. Perpetual incomes have no value in a model of abundance.

Income is the profit a supplier receives over and above the cost of the product offered. In the mass tourism model, the supplier is not the service provider, that is to say, it is the channel, the tour operator. When the supplier has control over a scarcity (of information) it is he who sets the transaction price, and here starts the main tension in the provider’s sustainable productivity. When the transaction price is not equal to the cost of the opportunity, a situation of continual weakness arises that makes the model unsustainable for the provider, with constant price-positioning pressure and an erosion of margins. In the mass tourism model, the instrument of control exercised by the tour operator to maintain “perpetual” income based on a monopoly of information is the quota contract. A contract that gives him a “right to beds,” without which the provider can adapt the transaction price to the competitive reality of every situation, even without the availability or the sale of those beds (the release is a genuine inefficiency). Therefore, the quota contracts make it so the transaction price of the provider to the channel is never the same as the cost of the opportunity. And nowadays that is one of the great weaknesses and barriers to transformation: by maintaining the quota contracts it is not possible to develop business models based on the new competitive dynamics of the network society and digital culture.

In a scenario in which the tour operator has no control and has no power over the information, maintaining quota contracts is an artificial income without contributing value and makes no sense. It simply prolongs the agony of the provider in the traditional model, without a capacity of his own to redesign his competitive model.

Therefore, one of the main sources of leverage for the transformation of the providers is the elimination of the costs of quota contracts, which act as barriers to change, to be able to establish a price equal to the cost of the opportunity.  And here the Internet is the backbone and key connector through the use of tools that can manage prices and availability on a shared basis in all distribution channels (channel manager) and that jump entry barriers: they allow more distribution entities to enter without increasing transaction or opportunity costs, and make it so the competition is whoever squanders income. By being fully connected, the utopia of a P2P distribution model, of liquid tourism, where even the providers themselves can distribute (crossing models) to third parties, the long tail and the pursuit of product design based on distinctive segments and tribes, will become a reality. The reality that we need to return to the path of competitiveness.


Idiso Digital

Idiso Digital

Marketing & Distribution Services

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  5. Jamel 10 October 2017 - 22:04

    I do agree with all the ideas you’ve presented in your post. They’re very convincing and will definitely work. Still, the posts are too short for beginners. Could you please extend them a bit from next time? Thanks for the post.

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