Development & Management of Tourism Products

This course will help you explore how developing and managing a tourism product works. You will learn what tourism product development is and what steps need to be taken and aspects need to be considered when setting up your own tourism product. You will get familiar with the tourism experience and success factors to make your tourism product special and memorable. Besides that, be prepared to learn how to calculate appropriate prices and how to market your tourism business in the digital world. In this self-paced course, tourism professionals in management positions will learn to develop a sustainability management plan and sustainability policy. 

Who is this course for? 

The course is intended for tourism professionals in management positions, tourism entrepreneurs and anyone interested in the topic.

What will you learn? 

• Outline major steps for product creation to create innovative, customer-oriented tourism products 
• Explain the difference and importance between single service components and tourism packages 
• Ensure appropriate price calculation and price setting for their tourism product 
• Describe key components of e-marketing
• Apply Social Media Planning to market their product

Keywords: Sustainability, tourism, management, entrepreneurship, production, tourism products

E-Markering and Social Media

In this section, you will learn to describe key components of e-marketing and apply Social Media Planning to market your product. It takes around 15 minutes to complete this section.

Lesson 1: What is e-marketing?

Once you have your product, your potential customers need to get to know about it. In today’s digital age, e-marketing and social media can help you attract attention to your product.

Types of e-marketing

E-marketing stands for electronic marketing and is also known as online marketing or internet marketing.  These are broad terms and embraces different types:

Front of card

Social Media Marketing

With Social media marketing you can acquire attention, awareness and sales for your tourism product or service through the use of social media platforms such as Facebook, Instagram or Twitter

Influencer Marketing

In influencer marketing, you work with influential people to promote a product or service to their online followers. An influencer is someone who has a relatively large or specific (niche) group of online followers. For example, an eco-hotel brand partners with influencers to reach their target audience of eco- travellers. 

Email Marketing

Email marketing is an easily implimented way of marketing by using email to send direct marketing messages to people in an effort to gain new customers and in particular to retain your existing customers.  

Content Marketing

You have to consistently create, distribute, and promote relevant online materials in a way that’s strategically designed to attract, engage and convert your target market into customers. So everything you create for your website is related to content marketing.

SEO Marketing

With Search Engine Optimisation (SEO), you can optimise websites and digital content to improve search engine rankings, which in turn, maximises the number of visitors to your webpage. In other words, say you wanted your travel agency website to appear at the top of Google’s search results whenever someone searches for “travel agency safaris”.  Well, the process you would use to make that happen is called SEO.

Unlike most traditional advertising, many forms of e-marketing – such as social media marketing, content marketing, or SEO – can be done for free. 

Which e-marketing is best for you?

Which of the e-marketing methods described above is the most suitable for your (future) tourism product? Write down your ideas for implementation and possible strategies.

Lesson 2: How to use social media

Your target group on social media are your potential customers. Decide what social media you want to focus on — maybe Facebook, Instagram or Twitter — and create high quality content on a regular basis. It is vital that you don’t use your own personal social media accounts, but your business accounts. Facebook and Instagram offer free business accounts that include added business tools, such as Analytics.

Quality content

Your customers will be bored by reading a long text full of information and details. Just posting random text, pictures and videos is not enough either. You want to create desire, dreams and the urge to use your product. How to achieve that best?  Tell the story of your product or destination:

Define the themes

Define the themes that reflect the unique selling points of your product or destination the best. What is unique about your product or destination? What makes it special and different from others?

Capture the dream & experiences

Capture the dream & experiences of your destination through emotionally appealing pictures and videos. This doesn’t all have to be your own content — you can re-share relevant content from reputable sources that you find elsewhere.

Transmit experiences

Transmit experiences — What can be experienced? Give authentic insight into what your customer can experience.

Lesson 3: Develop a social media plan

A social media plan is a structured plan to create, develop, manage and publish your content.

Create

• Analyse what makes your business or destination unique and define three to five core themes that reflect the uniqueness of your destination or business.
• Decide on the best two to three social media channels that reflect your target market, e.g. Facebook or Instagram and Twitter.

Develop

• Brainstorm ideas for content, keeping in mind seasonal highlights and holidays.
• Define the type of content you want to post. Do you want to focus on pictures and text or more on videos? Where will you source the content? Have your target audience in mind.

Manage

• Establish a social media calendar. Use a template with all the days of the week. Use this as a working document to schedule your content that you will post during the week and month across all social media channels. Keeping in mind seasonal highlights and holidays.
• Track and analyse how well your posts are performing on social media using the built-in analytics tracking tools in each social media platform.
• How many people have been reached?
• How many likes did you get?
• How many followers do you have?

Publish

• Publish your content on the days as indicated in the social media calendar. This will ensure that you stick to a consistent posting schedule and never miss important dates.

Develop your own social media plan

With the background knowledge and your reflections already made during the course, you can now get started with your own social media plan. Use the points above as a guide.

Tourism Product Development

Lesson 1: Fatima’s Photo Safari Adventures

Transcript

Welcome to Fatima’s Photo Safari Adventures in Kenya. I’m Fatima. This is my business. 

Let me share how I developed my sustainable tourism product. Let me take you on my journey.

I have created a unique point of difference. I researched the market and concluded your travel with us starts at home. Before you come to Kenya, you’ll have online classes, and learn about wildlife photography, as well as our culture. Once you arrive, your adventure continues. 

Come with me. Let me show you around. Wildlife conservation and sustainability are the heart of what we do. Enjoy our eco-friendly safari tents. They’re made from local sustainable materials, and give a truly authentic safari experience. 

Food is central to our culture and our services. Your food is grown by local farmers. It’s in season and always organic. All your meals are homemade by the village community. And yes, we can cater to your food requirements. 

The biggest highlight is our wildlife. Our camp is inside a protected wildlife reserve. Your online classes have prepared you for our diverse species. We check camera equipment and share techniques. You can rent our pro gear or bring your own. We all dream of meeting a wild animal in its environment. Our safari will make it happen. The magical moment between you and the wild animals you capture in a blink of an eye. Every day is unique, which makes my business special. So let me share some tips on how I manage my Fatima’s Photo Safari Adventures. I’ll be your guide for the following e-learning course for you to develop your own tourism business. 

Lesson 2: What is tourism product development?

First there is the idea…

My idea for the photo safari came from my work as a safari guide in a wildlife conservation centre. At that time I had no idea that this could become a tourism product and to be honest, I didn’t know what a tourism product was either.

Tourism Product is “a combination of tangible and intangible elements, such as natural, cultural and man-made resources, attractions, facilities, services and activities around a specific center of interest — which represents the core of the destination marketing mix and creates an overall visitor experience including emotional aspects for the potential customers. A tourism product is priced and sold through distribution channels and it has a life-cycle.

World Tourism Organization (UNWTO)

It is not only about the physical component, but also about the experience you create for your guests. I don’t want my guests to just take photos and that’s it. They should take everything with them — the country, culture, people, plants and animals…simply everything.

Just a service is not enough

Whether you are providing guided tours, rental services , accommodation or attractions, you are offering services to your customers. For today’s tourists, just a service is not enough. Perhaps this is something you have also noticed in your work.

Excellent tourism products not only benefit your customers, making them happy and satisfied — but they will also benefit your business.

“Word of Mouth”

Your customers will spread the word about their great experience with your product or services. This is called ‘word of mouth’ marketing. And now with social media channels at the guests’ fingertips — it is easier than ever for them to share their positive stories about your product with thousands of potential customers. 

Get good reviews

Excellent products make happy and satisfied customers. They love to write good reviews which means they can go online and write positive things about your product. And other customers trust in good reviews and book your service.

Be different

By creating an innovative and attractive tourism product or service, it sets you apart from your competitors — it gives you a competitive advantage and it helps you to stand out by making a difference with your product.

Lesson 3: How to get started with tourism product development

Product development preparation

Before starting out with the specific creation of your tourism product, there are some essential steps to consider. 

Step 1: Identify your unique selling proposition (USP)

• What are the special characteristics and competencies?
• What potential does your region offer regarding nature, wildlife or culture?
• What makes your product unique?

At Fatima’s Photo Safari Adventures we don’t just run a photo safari, we also offer online pre-trip courses where we teach our guests about the culture of our country and introduce them to the secrets of wildlife photography.

Step 2: Analyse your competitors

• What do your competitors offer and how is their product designed? 
• How much does it cost and how do they promote their product?
• What can you do better or differently?

There are some competitors in our area who also offer safaris. But not photo safaris with the all-round service that we offer. Some of them offer lower prices, but at a lower quality.

Step 3: Analyse your target market and understand your customers’ needs

• Who is my target group? 
• Where does my target group come from? 
• What does my target audience like? What are their preferences and interests? 

Our target group are definitely adventurous people who are passionate about photography and who want to have the unique experience of getting close to wild animals. They don’t need a five-star hotel, but want to experience nature up close.

Step 4: Look for inspiration

• Which products and services are important for customers?
• What do market analyses say about your product? 
• What information is available on the tourism business from market intelligence institutions? 

During product development, my team and I also read reports and market analysis by tourism institutes and talked to other entrepreneurs about potential customers and target groups. We also subscribed to some newsletters for additional information. So we had a good overview and could get inspired.

My tools of inspiration

Use surveys

You can use written and/or online surveys. Run a survey to try to get an idea of the needs your customers have. Seek personal conversations with your guests. Follow up on any criticism and draw conclusions.

Do observations

Observe your customers during different phases of their customer journey. It gives you insights into what they think, what they do, how they interact with others and what they dream and wish for.  

Visit online resources

Visit internet forums and review sites: search for entries/ratings regarding your offer (e.g. TripAdvisor, Google reviews).

Ask customers

Ask your customers for help in making your services more appealing to them, for example, help to fill out some ‘memory cards’ each time they experience something they did not expect, or which they find very positive or negative.

Involve your stakeholders

Product development cannot be realised only by you — it has to be done by all the stakeholders in your destination.

Tour operators and travel agencies

They promote and sell your product, and might even coordinate your product if it is part of a package.

Food and beverage suppliers

They ensure that you can provide meals and drinks for your guests.

Public sector (government)

They develop basic infrastructure, e.g. streets, tracks and paths in national parks.

Transport providers

They ensure the mobility of your customers from place to place.

Local authorities

They give you permission to run the business and set the legal framework.

Destination Marketing Organisations

The regional or national destination marketing organisation works as a catalyst for product development and might market your product at a bigger scale. 

Local tourism suppliers

Rental equipment, tour guides— they provide essential equipment and ensure that any activity can be realised. 

Employees

They will deliver the services to your guests. Without staff, you can barely run your business. 

Customer Experience

Lesson 1: What are success factors to create a great customer experience?

When you develop a tourism product, you want to create a tourism product with special features. It is essential to develop a tourism product that transmits a positive, emotional customer experience.

Check your knowledge

What are key takeaways for creating a great customer experience?

• Quality is key to customers.
• The preferences and needs of your tourists vary. You need to adapt your product according to their preferences.
• Your customers’ needs are not necessary.
• Develop a brilliant idea that sticks out from your competitors.
• Good quality can be developed later on, at the beginning there is no need for good quality.
• Define your goals and what you want to achieve with your new product. 

Emotional product experience

Today’s customers are increasingly wanting highly personalised experiences in destinations. The more they can be involved in the design and delivery of these experiences, the greater the value of the experience in terms of the visitor’s satisfaction and willingness to pay a premium price. 

Example

There are few tricks you can use to turn a good customer experience into a great customer experience. Take advantage of your great setting and state your surroundings, your forest, fields or lake. Include them in your tour and be prepared to talk about it.

Don’t just show your customers the way, but define a thematic thread that you can pick up throughout the entire tour.

Tell exciting and emotional stories about local customs or traditions or local anecdotes that touches the customers.

Make nature an experience for all senses. Let them smell, taste and feel the nature around them.

Offer them the opportunity to experiment and participate. Make them a part of their journey.

Lesson 2: How can a product be created?

Tourism service chain

Tourism products do not stand in isolation, as most tourists on holidays use several products that are interlinked with each other. This bundle of individual products is called a tourism service chain. 

Let’s look at all the role-players in a service chain:

PRIOR TO THE EXCURSION

It all starts with the organisational part prior to the actual excursion, including the booking, the registration, the payment, etc. 

The excursion or tourism product can be booked on site, but of course also in the guest’s country of origin.

DURING THE EXCURSION

Then during the excursion, itself, many service providers are involved:

• The transportation company that runs the tour bus for the day
• The local restaurant that provides food at lunchtime 
• The tour guide who guides the group and explains interesting facts and figures
• Any activity you run throughout the excursion with an additional service

Let’s dive in: Creating a product

Demonstrate your expertise

What are bundle offers you could provide for your (imagined) tourism product? Research the necessary information and create a concept.

Packaging

Lesson 1: Why is a tourism package beneficial to your customer?

Many tourists don’t come to a destination just for the day. They’d rather stay a few days, use accommodation and transportation services or take part in numerous activities. 

In this case, when so many tourism products are consumed, packaging comes into play. Each service component you see below can be offered by an individual provider for an individual price, or they can be combined into a package:

Package characteristics

Transcript

I think it is not only an advantage for the tour operator to offer his product in packages, but also for the customer. This is why the package tour is already made travel product sold for a total price, so managing and organising the whole thing is easier for the tour operator.

Customers, on the other hand, have less organisational effort when planning their trip. It’s more convenient for them. With booking of 1 tourism product, they can use several service components that are included in the package.

Communication is easier for both sides because there’s a central contact person in the form of fee tour operator. He has all the strings in his hand. The customer knows exactly who to contact if he has questions about the trip or individual service components. Tourism packages really make my life as a tour operator easier and also my customers are very satisfied with them.

Lesson 2: Who can you build a package with?

Have you created your individual product and so far been offering it as an individual service? Now are you tempted to develop a tourism package because of all the benefits your customers will have by booking a tourism package instead of an individual service?

Ask yourself the following questions:

1. Who in your community or region can you cooperate with? 
2. Who can add value to your product? 
3. Who can help you to create a better customer experience? 

Identify partners

You can use the clues on the index cards to make bullet points and ideas about your future tourism package right away. If you don’t have a product at the moment, use Fatima’s Photo Safari Adventures as a template.

Define

Define your product or service. Create a short profile of your services so that potential partners can get to know you.

Analyse

Analyse what kind of offer your potential cooperation partners have. Get a clear understanding of what services other suppliers can provide.

Brainstorm

Brainstorm what you want to do together, you and your potential partner for a tourism package. Determine your ideas and select what can be realised. Take into account the requirements for quality and sustainability as well as the target group-specific expectations.

Identify

Once you have selected a partner to develop a package with, identify who has to perform which service components and link them with one another. Who is responsible for what? Ensure that all aspects are covered to guarantee a great customer experience.

Pricing

Lesson 1: Types of costs

When you set your price for your product, you need to consider different types of costs which all have different characteristics.

Variable costs

You need to consider the costs per customer who takes part in the excursion. These costs arise through food and drink, entrance fees or material costs. They are also called variable costs, as the total amount depends on the number of participants of the excursion.

Fixed costs

Another cost you need to consider are the costs per group. These costs arise for the realisation of the excursion — regardless of the number of participants, they are called fixed costs. For example, the cost of the bus, which will be the same, regardless if you have 5 or 7 participants (unless you need a bigger vehicle). 

Administrative costs

Don’t forget your administrative costs, for example the rent of your office, the cost for postage, for advertising, electricity, water, etc. These costs occur regardless of the realisation of the excursion. 

Distribution costs

If you do not distribute the product directly, the costs for a commission are added, e.g. the travel agency gains 15% – 20%. 

Lesson 2: How to set your price

Study

You want to make a profit, right?

Otherwise your business is not successful and you cannot make a living. To make a profit, we have to add a certain percentage of our costs. The recommended percentage is 20% and is called profit markup. The calculation is actually quite simple. Let’s take one of my photo safaris as an example.

The basic cost is for lodging, food and photon equipment, plus all service and administrative costs. Let’s say that’s $160 per person. Now we have to take 20% of this sum, so 160 * 0.20. That’s $32. We add that to our cost and we have a selling price of $193.00 for the photo safari.

That’s how you make a profit.

So you need to add an amount on to the price, the so-called profit mark-up. This is your profit margin. A profit mark-up of 20% is recommended.

Distribution costs and sales tax

If you distribute your products through a travel agency, then distribution costs must still be added. In most countries, a sales tax or similar applies. Please check out which taxes apply in your country or region.

1. Distribution costs:

In case you distribute/sell your product via a travel agency, add to the costs without profit markup 15%.

2. Sales tax:

The costs with markup have to be multiplied by the tax that applies in your country, for example multiplied by 0.15 (15% tax).

Lesson 3: When to adjust your price

There are times when you should adjust this price. Keeping the same price all year around, for all guest groups and regardless of the group size, is not recommended.

Let’s have a look at some scenarios and see when you should vary your price:

SEASONAL VARIATIONG

At various times of the year there might be some periods where there are only a few customers — it is low or shoulder season and it is so hard to sell any seat. In these times, aiming at selling at least something, you might offer your product for a lower price — promote a special deal.

ROUP TYPE

You will have different target groups, families, elderly people, groups of young folks. Families, for example, sometimes have a hard time paying for an excursion for four family members (2 adults and 2 kids). It is a higher financial burden than a single customer. So it is good to provide a special price for the type of guest you welcome in your trip. Set a family package for example, where kids pay half price.

GROUP SIZE

Your price per person for the excursion is not set for the case of full occupation. When you are fully booked, consider providing group discounts.

Factors to consider

1. Constantly analyse your demand

How many tourists are interested in your product? Who wants to buy your product? Which target group?  Reflect and review critically how many people buy your product. If nobody buys your product, is something wrong with your selling price?

2. Observe the market and your competition

Find out how much your competitors charge for the same or similar product. If cheaper, what additional services can you offer to justify your higher price?

3. Added value

The more special and unique your product is — i.e. the higher the added value, the more you can charge compared to your competitors.

What can you do? Add special value to your product, anything that stands out from your competitors.