The Golden years
Tourism in general has done well in the last 10-15 years. I live in Norway, which means that I feel lucky since I live in a scenic country that has an almost magnetic attraction to foreign tourists. Norway is one of the most insta-friendly countries in the world. We have dozens of impressive projects and good ideas that have been realized by hard-working tourism entrepreneurs.
The fact that tourists have come in droves in recent years can of course be attributed to the fact that a lot of good work has been put in both by those who make the products and those who tell the stories. But most of all it is probably because tourism is and has been so incredibly popular worldwide. Not only here.
There has been an incredible number of people who have traveled the world in search of meeting their need for a break from everyday life and all that we in tourism can help them with. With the advancement of the economy, tourists have come in waves of new segments as new markets have opened.
Norway has also surfed these waves.
In some places, there has been so much demand that just by decorating your cabin and charging money for the beds, you automatically would’ve had a successful business. Demand has surpassed supply. Therefore you have been able to get away with most things. In Iceland, people have even knocked on private house doors because all the commercial beds have been fully booked. A couple of guys who started renting out air mattresses in their apartment, saw an opportunity and eventually developed into becoming one of the world’s largest companies.
The market has been endless and unstoppable.
But right now it’s not like that anymore. So can we expect the golden age of tourism to continue after this break?
We still have no one who can predict the future, the closest is perhaps Google and the octopus who predicted the World Cup. The most important thing for the industry in the short term is to get rid of covid-19, but many big questions regarding the future of the tourism industry are still up in the air. How will markets and business models change in the long run? Will the trends we saw before C-19 continue?
About 73% of you who will read this article run a tourism business. 20% work in destinations, the public sector and perhaps in the policy instruments. The topic of the article is on the narrow side, so the article will be read by plus minus a thousand people the first few days and then a few here and there on our website afterwards.
Therefore, I will try to provide the best possible value for those of you who want to address the situation. It will take you 5-6 minutes to read the article.
As opposed to predicting the future, it is possible to create your own future. Right now is a great time for that, and if you have ambitions and a desire to emerge stronger after the crisis, you are probably well on your way already. If you have not started yet, it is not too late. We have gathered some tips on how to succeed. Whether you need help, inspiration or both.
Below are the most important lessons from the article (for those of you that don’t want to read the whole thing).
Solve real problems. It is almost astonishing how often a service or business model is not in balance with a real need in the market. If you do not solve a problem or fill a need, it does not create any real value either. How can you match the service with the needs of your customers?
Come up with lots of ideas. This is about volume, and a systematic approach to solving problems is about finding different potential paths towards the goal. Finding a good idea is rarely the hard part, but getting people to spread it is. If you have several you can try, make mistakes and choose the best ones on the way to the solution.
Innovate the business model and distribution, not just the product. Innovation does not stop at the product level. Maybe you can find new ways to distribute your service or new ways to market them? How can you create value for your customers and yourself with what you have? Innovation is not about inventions. When you want to do something in a better way, work systematically to achieve it.
Test the ideas on potential and existing customers. It is all too common not to talk to customers because you are afraid of negative feedback. Talking to and observing customers is not just important. It is the most important thing of all.
After the goldrush
What’s the situation with Norwegian tourism? You can choose to read depressing reports about financial consequences, but I think it is even more interesting to see what’s happening with corporate culture, emotions and actions. The economic crisis will historically and relatively be short-lived. Much of what happens is beyond corporate control anyway, so it’s more useful to keep developing.
In the long run, how you deal with this and other crises, adversity and change is what’s gonna matter most.
We have spoken to many providers and customers, monitored news and followed various forums to understand how tourism itself responds. It has been very interesting and we have started to see the contours of a few micro trends.
We can divide the reactions into three “main types”. Group 1 is ready to start up again as soon as possible and uses its resources to return to normal. They can not wait and will go all in with even the slightest possibility of normality, even if the risk is huge. Many in this group have sold travel for 2021, and many are now affected by new restrictions. They are also strongly focused on influencing the authorities. They want it to return to normal. Now.
Group 2 has simply taken a “break” and does not know if they are gonna start up again, and certainly not when. They are suffering from some kind of despair that does not really benefit anyone. But still, fully understandable and normal.
Group 3 wants to get an overview and find out what everything that happens means to them and to their future.This group would like to understand how they can influence their own situation. How can they build a solid company that can handle these situations in the future? How can they become more secure? Is there an opportunity to get out of this with innovation and restructuring/remodeling? What is the best way to spend my limited funds right now?
I may have spoken a little too much with my heart and too little with my head when I right before Easter concluded that everyone was more or less voluntarily digitized, and made a number of important and necessary moves that would equip Norwegian tourism for the future. I might have been dazzled by a number of fresh, sexy ventures, webinars and a kind of common agreement that it’s happening now.
But is it digitization? Not so much.
Let’s be clear. We were not digitized through a few months of home offices. We were also not digitized by taking meetings on Zoom, Skype, Whereby, Teams or FaceTime. And were not digitized by taking a couple of digital courses and attending digital conferences.
The company is first digitized when it is able to take advantage of the good opportunities that digital solutions provide.
It did give us a good start. But group 3 has probably taken it much longer.
It is no surprise that many of those who are most eager to turn on the switch and continue as normal are the more traditional players. They like to think that everything has worked well, and why should you really change something that works and that you make money on? Some of the bigger players have also been the ones who have pushed hardest to pretend that nothing has really changed.
They have everything to gain from things continuing as before.
In the wake of short-term gains, some infinitely dishonest players have come to light, and for many inside and outside the industry, they have also become the symbol of much of what is wrong with today’s tourism. It may be karma striking back, but they are not alone. In the big picture, they are just a small piece in a big puzzle where too many pieces don’t fit.
Overcrowded local communities, nature and climate, green washing, exploitation of labor, power and income that goes everywhere but locally, where the visitors actually are. The warning lights started flashing long before Covid-19. The “old” tourism has made the workforce very vulnerable to change, seasonal and dependent on old business models and ecosystems where intermediaries are allowed to rule. Tourism is unbalanced and now we have to find new solutions that are better for the environment and local communities.
To put it this way. If we go back to normal after Covid-19, I will be embarrassed on behalf of the entire industry.
We can not solve tomorrow’s problems with the same solutions that created them in the first place.
The market is changing under Covid-19. The market changed long before Covid-19 and it will change long after Covid-19. This is bad news for those who choose not to adapt.
So group 3 is better off. They are the curious that are ready to create their own future. Those who want more legs to stand on. Those who build a dynamic and flexible organization to cope with the challenges that may come their way.
Tourism needs innovation, we need new and better solutions.
This does not mean that everyone should invent websites or new technology. This means that we must find what can be done better and that provides value, we must then work systematically with this until we find a solution. Innovation is about solving problems.
One way to work systematically with innovation is Design Thinking. This methodology is common in the technology world, but not so common among traditional tourism players. I believe it also fits well with a world of tourism that is very much about creating experiences for people.
Creating memories and change for people.
What exactly is design thinking? In short, design thinking is a collective term for methods and processes where one tries to solve a problem by taking the perspective of the person who is going to use the service or product. In contrast to starting with the solution or product, this is a people-oriented way of working with innovation and development that places those who will use the products or services at the center of development.
You do not know what to make, but you know what problem you want to solve.
Furthermore, we must involve the “uses” in the process. For example, through interviews, observations, measurements or that they are actually involved in the development itself.
To achieve this, it is very important that we understand the customers who will actually use the services, what they think, how they feel, how they behave and where they come from – their context. It is also important that we involve them throughout the process and are very careful that our own preconceived notions do not get in the way of real insight.
In fact, listening more to users than one’s own perceptions are much more difficult than one might think, and probably where most people make mistakes. Talk to people. It’s about asking enough questions. Through these questions you will be able to define the problem. Focus on what the customer REALLY needs, not on your company’s goals.
A famous quote from Harvard professor Ted Levitt describes a good way of thinking:
“People do not want to buy a quarter-inch drill. They want a quarter-inch hole.”
The drill solves the customer’s need to make a hole in the wall. The usual thing is to focus on the technical/physical solution, while the result is really what you should focus on. How to solve the problem. For many, disconnecting completely means doing something physical, preferably in nature. Others will solve the same problem in completely different ways. They can be at home, with friends, they can meditate, watch movies, watch TV, box, go to a gym or go out and have a couple of beers for that matter.
There is not just one answer to the same problem. So it is important to keep focusing on the customer and use the issue (problem?) you have defined to set the compass course going forward. If it slips a bit and you feel that you’ve gotten lost, then you can always go back to the problem.
The next step is to work on ideas. I recommend that you do not do this alone. The whole point is to work in teams. The best ideas happen while interacting with other people. You may come up with good ideas on your own, but you get more ideas, and they get even better, when there is a team. Quantity over quality. Get as much as possible out on the table, think outside the box and leave the mind open.
Philosopher Arne Næss Sr once said that today there are good opportunities for specialists, while society needs generalists more than ever. People who can think along multiple axes. Our society is often designed so that we from school get used to working focused and specializing in disciplines and topics. We like to acquire a certain way of working and we often put different people’s skills in stalls, often called silos. I’m good at this, and you’re good at that.
Design Thinking often challenges habitual thinking by working together across disciplines. One combines the designer’s way of working and thinking with interdisciplinary teams combining their way of seeing the world with available technology. This opens up new perspectives that are more difficult to achieve in the traditional “silo structure” where I do mine and you do yours.
In the world of technology, it’s about making prototypes, but we are not necessarily going to make something concrete, so let’s just call it a first version of your product. There is no point in interviewing a thousand Dutch people on the phone about what they want to do in Norway or what you intend to offer. There are too many guidelines in this. Conscious and unconscious.
A few years ago I took a course on building apps and mobile experiences. There was definitely a focus on uncovering people’s behavior. If you are going to make a booking solution, you can for example ask what the customer did last time he or she booked a trip. Note: Not what you do, but what you did last. People do not remember very well, but by focusing on the last time you will get much better answers. Then you can try to get your new solution to fit into that pattern of behavior.
But create a solution as quickly as you can. You have to see what people are actually doing and then you have to have something to show them, something customers can try.
Show don’t tell. Show what you have, it doesn’t have to be good, and then ask the right questions and move on to the next version. Design thinking is about working in stages with testing ideas and gradually adjusting these proposals to solutions.
Since experimentation and testing are so important, failing is also considered a tool for learning. There is nothing you learn more from than a mistake. When you want to solve big problems, you must also accept that we will fail on the way to the solution. Launching a temporary solution to learn from is central to Design Thinking.
We learn through exploring, asking, trying, making mistakes and eventually understanding. We need to get out of our own bubble and out to our customers. Design Thinking is a kind of link between empathy, intuition, creativity and analysis.This article was written during a long night at a cabin and probably has both typos and other minor errors. These things can be corrected down the line. The goal is not to write a perfect article. I just want to get it out and get a reaction. Maybe we can influence someone to try a new way of working?
The processes in Design Thinking are not streamlined, nor are they concerned with perfection. When we work in this way, our creativity is stimulated and new ideas will come along the way. Maybe you need to jump back a notch or two.That’s the whole point.
It costs little to make changes early on in the process, but it costs much more at a later stage. Not only do you increase your accuracy, you also minimize the chance of making costly mistakes later in the process. So embrace experimentation at an early stage. Create products as quickly as possible and test it on real customers.
It will give you insight and tell you if you can move on, or if you need to fix things. Some say that the first version of the service should be so simple that you are a little embarrassed when you take it to market. I do not disagree with that. My experience is that it will work itself out, and no one really remembers what you first came up with anyway. Friction creates heat and can be the spark you need.
So to summarize Design thinking:
- Deep understanding of users needs
- Improvement and refinement through measurement, testing and gradual change
- New perspectives with interdisciplinary teams
Heart of gold
How does this relate to tourism? Few industries in the world are more focused on people than tourism. It’s about empathy and understanding the customer. Now, of course some may argue that tourism does not solve real problems, and that tourism is something trivial. But most of what is sold in the world is trivial. No one needs your products, but that does not mean that your product or service doesn’t solve a problem.
You help people fulfill a dream or become the person they want to be. A little bit at a time. I’m pretty sure that a family with young children on a school break believe a tour operator will help them solve a problem. They have a need to entertain their children for a few weeks, and get new impulses whilst feeling safe.
To achieve this, they have to face several problems. These can be financial, time-related or logistical. There is a reason many in this segment turn to charter trips. They solve problems in an effective way. Every tourist has one or more problems that need to be solved. So it’s important to understand these issues. They are very much real.
Let’s say you want to summit a famous peak. You will either have to learn to climb, or know someone very knowledgeable. If you don’t have these options, but want to get to the top in a safe way, then there are guides that can solve your problem. A hotel can meet your need for accommodation, a restaurant can meet your need for food and also a need to meet people. But if you want to eat sushi, a pizza restaurant will not meet your needs. We must know the target group, and create new solutions that work with old feelings.
There are 7 billion people in the world who all have different wants, needs, problems and preferences. In many ways, everyone has something in common, they have a basket with dreams and desires in different amounts, but they overlap in many areas. Tourists might dream of things like adventure, to belong, community, to have control, love, that everything should be as it is, physical activity, to look good, creativity, breaks, a simpler life, freedom, luxury, friendship, nostalgia, confirmation, security, respect, power, status, challenge and mastery.
These are some examples of needs you can meet. You can probably easily add 15 others to the list, but maybe not fifty? That basket often contains more or less the same things. Different mixes of the same.
Tourism as an industry is a series of services, infrastructure and experiences put into a system. Some things are tangible such as infrastructure, equipment, beds and food, while service, experiences and emotions are more intangible. Unlike many other industries where the organization is in focus, the tourism industry is very centered around the customer. Your job and existence depends on giving the customer the best possible experience.
When creating the best possible experiences for customers, I believe that you can easily see Design Thinking in connection with the theories of creating good products and experiences, eg experience economy. This is a nice backdrop, but Design Thinking is about solving the customer’s problem, while several of these theories are more about how to make the product (the solution). Some people are probably better suited to take care of physical products rather than working in tourism.
Design Thinking can be used in everything from the smallest meeting rooms and kayak courses, to designing services, attractions and entire destinations. It can be used to create business models and for marketing and how to succeed digitally.
Let’s take websites as an example. A fairly common misconception is that the prettiest websites are the best. When you start measuring effects, you quickly learn that it is not about appearance, but about functionality. If your website looks better than Amazon.com, it is pretty enough for your customers. The question is how easily they get answers to what they are wondering. How well the website solves their problem, or how effectively you solve the customer’s need for information. But nice and inspiring pictures are always a good idea.
Design thinking focuses on the interaction between tourists and providers throughout the experience. By using this methodology and tools, it becomes possible to uncover the inner motivation of the customers. You can create a map of the customer’s experience and identify the most important contact points. We can use these contact points to analyze the quality of the experience, and the best opportunities we have to improve it with the goal of increasing the value of the customer experience.
This has become very relevant this last year. Foreign guests have been absent and we have had to focus on the local market. Suddenly customers have completely different needs. There is a lot to take in. We must either make completely new products or adapt the ones we have. We need to market and sell in new ways. Maybe we need to find new ways to make money.
An example of innovation with a business model that has come in full speed during Covid-19, is subscription. Agents want to build loyalty that persists even after all this is over. And the subscription model fits perfectly. You pay a fixed price for a year or per month and then you have an agent available who knows you and helps you when you need it.
I think one of the next big digital shifts in tourism is at the product level. In the past, both distribution and marketing have undergone major changes, but the products have largely remained unchanged, and human. Now people seek distance and security. It can open up new solutions and more automation. If this were to happen then it would change everything, from marketing, distribution, cash flow and power. Perhaps this is the opportunity to transfer power over to the small local providers.
I hope so, but of course there are still very many who do not want change. It’ll be interesting to watch how this evolves going forward.
Life is golden
In tourism, innovation has largely been reserved for intermediaries. OTA, booking solutions, advertising, i.e. within marketing and distribution channels. At the same time, the degree of innovation among authorities and local providers has been low. It has opened the doors for intermediaries, who have created gold by solving problems for other people’s customers.
At the destination level, we have a top-down type of organization that is actually designed for stability and control. The tools used are often the same as those that have been used for decades. Both business, industry and the authorities have shown little willingness to change or reevaluate the way tourism is organized. Politically, there has been very little knowledge and willingness to change.
Due to the intermediaries, today more or less everything is done digitally, but despite that tourism is still considered a low-tech service industry. At least among ordinary people. Tourism is dominated by small and medium-sized businesses. In the vast majority of countries, these make up between 70-90%. With these small players, the degree of innovation is also low and they are often unable to take advantage of the opportunities that technology provides. The intermediaries move away and get bigger and bigger.
When planning tourism, we often follow a linear model. We look at the calendar and plan based on seasons and holidays. We look at our strengths and weaknesses and think about what we want to be in the future based on them. For many destinations this has resulted in terrible master plans that not only kill innovation, but also destroy dynamics and the ability to adapt. The models of the future are more flexible.
Most of the plans we see today are often top-down and with large-scale launches and nice words that moonwalks destinations backwards into the future. Often with the help of external “experts” and often with little involvement from the local community, but often with some external investors in the background. Therefore, unfortunately, local considerations and the environment are not taken into account enough. These investment-based approaches to tourism planning and management is a fundamental flaw in today’s tourism.
The world is also changing much faster than these plans do.
Local tourism managers fall in love with developers’ larger-than-life visions. And destinations have been considered an inexhaustible resource without anyone really taking responsibility for its long-term “health”.
The goal must be to create good and healthy destinations, and the answer lies with the users and the local population.
Design Thinking puts stakeholders at the center of the process. It claims that the best solutions are found in the interaction between local actors and the travelers, and not with external experts who have all the knowledge. It is about listening and observing and giving the people an arena. There are plenty of examples of destinations that do not reach their potential because people are unable to cooperate.
Think of all the magic that can happen if you go beyond the traditional boundaries of tourism and involve local communities and tourists in a collective process where you try, fail, measure and adapt. Completely new ways of organizing tourism can emerge. Ways that are tailored to your particular destination, creating a vibrant community that visitors love. So maybe we need to use new tools.
The process can strengthen unity, empathy, understanding and creativity. At the same time, everyone involved gets a completely different ownership of vision and actions. Design thinking can be a strategy and a solution. We can use it in the way we collaborate, how we train local companies and how we work together.
It is about identifying the problems.
There are many good tourism products in the world, but how many exceptionally good products do we have? Products that are so good that people start spreading the word all by themselves, with a reproduction rate that surpasses a completely hypothetical virus.
I can talk about Norway. After all I live, here. As in many other countries we have a lot of fantastic things in Norway, but almost everything is created by nature itself. Pictures from some of these spread virally because they look good.
We have lots of this. In fact, most customers also want something that is just fine, which is why the largest market is there. These are not the ones I’m aiming for. I aim more at the products and packages we make around this lottery ticket we have been given. I definitely do not wonder how many good, nice or decent tourism products we have. We have many of them, and that goes for almost everyone.
What I find interesting is to investigate how many extraordinary and remarkable tourism products we actually have. Those who stand out. It is a given that if you want to be remarkable, then you have to come up with something completely different and that naturally excludes well over 99% of the products.
It is impossible for half of them to stand out from the crowd. The number is suddenly very low.
What’s best is up to the customers, it’s not up to you. Google was no better than either Bing or Yahoo when it came to search. It did not go faster and those hits were the same. What made Google better was that people who searched did not feel as stupid afterwards. While Yahoo gave you 183 links to the website, Google had two. Super simple, and it gave people confidence. That’s why Google was the best for most of us.
I know many bookstores that are better than Amazon. Although the selection is smaller, often also the service. Because there is an atmosphere there, you can sit down with a coffee and feel the book in your hand. You do not get that on Amazon. At the same time, I prefer to use grocery delivery services, because it is better suited for the life I have, but others prefer going to the grocery store to shop and meet acquaintances.
It fills a different need.
Some like Porsche, while others prefer Volvo. Young people prefer not to have a car. Their need for transportation is covered in other ways.
It’s about preferences, perceptions and feelings. You can stand out in many ways. It can be through extraordinary service, it can be with a unique user experience, it can be with a sustainable position and set of values, it can be with your business model and it can be the location.
The very best thing you can do to get out of this crisis stronger than before, is to be really good for someone. No one is the best for everyone, but everyone can be the best for someone. Stand for something and take a position. Then you can make something that someone loves. You have a better starting point for creating something big when you have 100 people who really love your product than when you have thousands who think it’s pretty good. It is those who love the product that will spread the word.
Although we are already pretty good compared to many others, I think we need to put the bar even higher. If you want to create innovative products and services that people actually need, then Design Thinking is a fantastic way to work.
I believe that many more can get better and create even more value for their customers. To create value, you must solve real problems. You must meet real needs. We may have to learn to ask other questions and look for other things so that we become the world’s best at helping the customers we want to have.
If you do, then the rest will work itself out.