Tourism Revolution (II): New Demand Dynamics

The values we talked about in the previous post, belonging to the new society, are being applied through tourist demand to a certain degree – a degree that, while it is still not the majority of overall demand, does represent a majority of the demand that inhabits the Internet.

And this percentage cannot go unnoticed, given that the capacity of the Internet to transform the tourist model is continually growing. But the disruptive capacity of the Web does not rise from its ability to “virtualize relationships” (involving information, communication, transaction, customer loyalty…) and cannot be measured as such: for example, through Web-based transactions. The disruptive capacity of the Internet arises from the fact that it has become a reflection of the identity of destinations, businesses and individuals. The fact that 85% of the population uses the Internet as a source of information means that the Web is establishing the new market dynamics, which in turn are “infecting” the remaining relationships  in the tourist system, well beyond informational relationships.

The relational structure of the Web involves dynamics that are totally distinctive from the offline world. And the mere possibility that such relationships could exist (and it is not necessary that they do), is enough that the tourist system and its relationships must base themselves on the new dynamics of the Web.

And we’re not saying anything new. The ClueTrain Manifesto predicted it back in 1999, saying the “Markets Are Conversations,” and demand began to connect up with new values and dynamics.

From the funnel to the plaform

In this post we would like to introduce some of the new dynamics we visualize with respect to demand, which are having a profound impact on the tourism system and market.

• From the Funnel to the Platform. The linear structure of the market, where an actor necessarily filters, creates and orients (on the basis of “means” and “ways”)  the relationship between supply and demand, is a thing of the past. The current market has no structural filter: it is a platform of networks where all actors interact.

• From Scarcity to Abundance. The absence of a “pre” filter that produces and seeks out scarcity permits the development of a market with an abundance of inputs. Knowing how to make the transition from a market based on scarcity to one of abundance will generate radical chance in all the actors. Understanding what the role of each actor is within this abundance will allow each to adapt perfectly to the new dynamics.

• From Solid to Liquid. The structure of a market as something static, stable, rigid, perfectly predictable, where standardization governed the logic of minimizing the market to something unique, has given way to a visualization of the market as an infinity of possible markets that are dynamic, flexible, changeable.

• From a Structural Center to a Value-based Center. The search for a central position, typical of the previous model, that allowed actors to access the same thing, with competitive advantages in time – belong to structural positioning rather than a contribution of real value – are disappearing. Value and its direct contribution in the moment is what generates a central position in the model. A centrality that, in addition, is momentary and stops when the value stops.

• From Value in the Supply to Value in the Demand. The thought and belief that supply, simply for being and referring to itself as such, brings value to the market is a thing of the past.  Not even the law can contribute a value that the market does not detect. It is not sustainable and we are seeing that  more and more. Demand is what concedes value, individually and dynamically in time. No one has a value that wins out permanently.

• From the Consumer to the ProKsumer. The market has abandoned single-function actors. In the current market’s platform of networks, any actor has the possibility of acting on some or all relational phases of the market. As such, the belief that the consumer only consumes, the producer only produces and the seller only brokers disappears from the market. Consumers who also produce (prosumer), producers who also sell (proKer) and consumers who also produce and broker (proKsumers) are the new reality of a market in which one has to know how to function.

These new dynamics are impacting boundaries, creating tensions, in many of the relationships among actors, which can be clearly visualized according to themes of special interest to the professional sector. Some of these are:

• Is the intermediary necessary? In the new market, where all the actors have the possibility of relating directly among themselves, it seems easy to call the intermediary into question. That is not what should be called that into question, but rather the model: the greater abundance, the greater the need to “impose order.” Consequently, the more precise questions are: What intermediary model contributes value to a market of abundance? At what time? With what markets, segments or clients? With what distribution costs and what rates? Through what channels?

• How to control the opinions/content of the clients? Control, control, control… It seems the only function with which actors feel secure and comfortable. But there is no control in the new market. At least no “pre” control. It is reputation that filters and ends up “controlling” and eliminating undesirable content. The question to consider is, How can I generate a reputation so that my message reaches the client as a “true” message?

• How can I hide this information and assessment?  You can’t. And trying to will only make things worse. The question is, How can I de-emphasize, and at the user level, eliminate comments that do not interest me?  Again the answer is based on an ability to manage reputation in a model of abundance without control.

• With whom do I negotiate so the clients elect me over the competition? The better question would be, What is the value of my contribution with respect to the competition? Is that value enough to put me in a better position than my competition?  How and who makes the determination? How to create incentives, through negotiation or through other factors?

• If clients do not return, are they disloyal? Best to ask oneself first what is intended by the loyalty. That they purchase from you again? If the types of vacations today no longer follow the pattern of decades past (repeat business, long periods of time…) and the motivations behind the trip are different, why do we continue wanting to find clients that return to our business as the main indicator of satisfaction? Would it not be more productive and real to ask, How do I convert the client into a marketing agent? And as a creator of my identity, what is the message that we want to transmit?

The great divide that is giving rise to these tensions can be found in the supply and its inexistent capacity to adapt to the new dynamics. By being more worried about how to go back to a familiar situation (especially through “the search for value by law” by way of legislation of all kinds that cover over the fear of the unknown), they do no more than blindfold themselves before the evidence. The “disconnected elite” are paralyzing the transformation – both in the administration and in business. Some out of fear, others out of self-interest, and the majority simply out of not knowing how to adapt to the new situation.