Over the past 8 years, I have become familiar with the tourism industry, first as a board member for Bonza Bike Tours, then as a partner in TourConnect. The more I am exposed to the tourism industry, the more I am amazed at how prevalent paper, manual processes exist in the industry. I thought it would be a good exercise to look at why this is still occurring in this industry when so much innovative technology exist to eliminate these problems. Specifically, I will look at the contracting and rate loading process that every supplier and contractor must engage in so that they can distribute products through the wholesale distribution channel.
Why is a manual process for contracting and rate loading a problem?
Fundamentally, all that needs to happen is suppliers must provide their rates and product information to every tour operator that they want to sell their products. Currently, the process of signing contracts and receiving rates from suppliers and loading those rates into tour management systems is a 3 to 6 month endeavour for a tour operator.
Most contractors receive the above information (supplier rates and product information) in many different formats – from spreadsheets to PDF’s to Word documents to faxes (yep, some still receive faxes!). Currently, very few tour operators even have an online system for receiving rates. To further exacerbate the problem, those online systems operate entirely independent from one another. This means that suppliers must undertake a separate process for every contractor that they want to sell their products. This disjointed approach to rate collection means a tremendous amount of administrative overhead for suppliers. For contractors, the overhead for simply manually entering rates into a booking management system is a huge burden – and that doesn’t even take into consideration errors, chasing up rates, and clarifying policies amongst many other costly issues. This inefficiency creates an enormous amount of additional costs for the entire industry.
In addition, customer service issues can come into play simply because a piece of data wasn’t updated. If a contractor was overloaded with manually entering product updates and didn’t update the pickup time for a tour, guests could show up late and miss their tour. All because of a simple data error that could have been avoided if the process was more efficient.
Why hasn’t the tourism industry moved away from this manual process?
To understand some of the issues at play, I’ll share my experience from a previously very manual industry, the temporary staffing industry. In the staffing industry, staffing companies provide temporary employees to other companies. The most challenging back-office function for these companies was getting the timesheets for every one of the temporary staff into their payroll and billing systems. This is where my company, TI3, came in. We automated the process of loading timesheets while allowing temporary employees to enter their hours on the web and on the phone.
While the staffing industry and tourism industry seem quite different, they have quite a bit in common. They were both significantly weighed down by the inefficiency of an essential, core operational process. Beyond that, both industries were filled with leaders that felt their challenge was unique and that an industry-wide solution wouldn’t work for them. There was also a prevailing sense of fear of the unknown…What if no one adopts these new standards? How do we know the automated process will solve all of the problems? All of these factors create a perfect storm of resistance to change.
When the tourism industry finally embraces data standards and automation, what will that look like?
What we experienced in the staffing industry was that as soon as a few innovators realized that a little standardization was a good thing, and embraced automation, they led a massive shift in the industry. Of course, there were challenges along the way, as you’d expect when implementing any new process; however, within about 3 years, we became the industry standard for this process. The companies that adopted the new automated processes achieved a huge competitive advantage while saving large sums of money on manual administrative processing. Their competitors took note, and the industry took off.
You’d be astonished at just how similar the comments from the staffing industry are to the tourism industry of today. In fact, I wish I had recorded the conversations from the staffing industry because they are almost word for word what I hear today! We see the same resistance to change in tourism as we did in staffing. What’s really amazing is that 15 years after the staffing industry began automating their processes, change is finally coming to the tourism industry.
All in all the tourism industry is primed for significant changes. It takes a strong will and commitment to make changes happen in any organization or any industry. Innovative tour operators will face these challenges head on and begin to automate the contracting and rate loading process. They will lead the way in defining industry standards for exchanging product and rate data. Their supplier base will have its share of slow moving companies; however, there will be plenty of innovative suppliers who embrace automation. In the next 2 to 3 years, the industry will have a new standard for the exchange of rates.
The most exciting part of the shift is that as automation occurs, the industry will find new ways to deploy this technology, unlocking the creativity of one of the world’s top industries. Automation is coming, and it’s a very good thing.
