At the PATA Annual Conference in Hong Kong this April, Matsuhashi-san of JTB spoke of information as the “lifeblood” of the travel industry. To back this up, JTB is investing $80 million in new computer equipment and the development of extensive databases both within Japan and in its major destination markets. This foresighted investment reflects an enlightened corporate recognition of the following trends.

• Databases and distribution are increasingly the keys to successful travel marketing. This is shown by the amount of private sector investment in this area. 
• More applications of new technology in the travel marketing field are becoming available (CD-ROM; view data; linkages with multiple databases). 
• Prices of technology are coming down, capacity is going up, and compatibility is progressively easier to achieve. 
• Travel industry is increasingly global in terms of markets and competition. 

These large systems are increasingly seeking to expand their coverage on non-airline travel services such as hotels, car rentals, etc.

As the use of technology grows, so does the appreciation of personal service.
The younger generation is computer literate and will take greater advantage of travel industry computer applications in making travel decisions.

More reservations will be made from home or from the office especially in regard to domestic travel. A larger slice of the budget of travel organizations will be allocated to direct marketing through computerized database applications.

Marketing effectiveness will be measured by visitor arrivals or room nights won, not ad impressions counted.

Each of these trends has an application for tourism marketing and argues for the development of destination database capability.

Objectives of Destination Database Development

The individual tourist product supplier has some fairly straightforward expectations in respect to database activity. He wants it to assist him:

• To know more about what his existing and potential customers want. 
• To reach these customers and tell them what he has. 
• To satisfy his customers so that they come back and spread the good word. 
• To operate profitably. 

• Foster an environment in which tourism can grow. 
• Contribute more to that growth through well directed marketing, training, information services, and, where appropriate, regulation. 
• Distribute tourism growth to better utilize available capacity and preserve environmental resources, and meet economic development objectives. As economists, ERA feels this last factor is particularly important. More and more destinations realize it is not the number of tourists that count (although we too often measure success this way) but getting the tourists that provide the most positive economic impact.  
• Maximize net economic and social benefit from tourism development. 

• Make individual choices from a broad menu of travel and activity options. 
• Receive timely and accurate destination and travel information. 
• Simplify access into the travel information labyrinth. 
• Resolve concerns and confirm expectations. 
• Save (or make) money. 

A database marketing support program that responds to the trends and contributes to the achievement of the objectives will consist of three main elements:

1. The product database. 
2. The customer database. 
3. The booking and reservation system to tie them all together. 

Many destinations have or are developing a computerized product database. This is an important asset. The product inventory system provides: 1) descriptive and timely information on many facilities, attractions, accommodations, services, special events, and programs; 2) phone numbers and contacts for use by consumers, agents and other travel intermediaries, thus facilitating the marketing and utilization of the industry products and services; 3) a fulfillment program retrieves information from the database and generates names and address from consumer inquiries. Of particular significance, perhaps, is this ability to capture customer data. This provides the foundation for expansion into a wide range of customer database marketing.
 
Possibly the most important consideration is that the product database has the flexibility and other attributes needed for computerized reservations. The CRS cannot deliver its benefits without a complete, well structured, and flexible product database. This is a time for a destination to be proactive in the control and presentation of its inventory. If not, the prospect is there for others to spot the opportunity and establish their own links with the tourist operators.

Customer Database

An increase in targeted marketing requires an increase in customer data. In the future, those who have not taken advantage of what computer technology can offer to reach individual consumers, will be at a competitive disadvantage.

Who Are The Customers?
 
A. The Visitors Themselves

• Those on existing databases and those added when they contact a tourism organization.
• Past visitors on whom data can be obtained.
• Non-visitors whose travel habits and characteristics indicate they could be future visitors.

• Travel agents and tour operators. The ATC’s Tourtrax database is an excellent example of this for North America.
• Association meeting planners, clubs, corporations, and specialized tour operators.
• Transportation suppliers including airlines, train operators, cruise lines and automobile associations.
• Hotel chains, car rental companies and other travel industry services.

Database Structure

The structure of a customer database serves two principal functions: 1) to understand existing visitors and 2) to gather information to encourage repeat visitors and reach new visitors.
In understanding existing visitors, certain traditional visitor information is provided for in the customer record.  This includes customer demographics, travel patterns and activity profile, expenditure data, triggering cues and information sources, past trip evaluation and satisfaction, and transaction history. This record is kept current and accurate through frequent updating and customer contact. This traditional information is valuable but only the first step in using customer databases. What is also needed is information to reach new visitors through database technology. Here, database technology can be used to address each of four priorities of market circumstance:

• Priority 1: Existing Market Segments - This comprises existing visitors. Concentrating on these segments is the first priority because these are the types of customers who have already expressed the highest interest in our destination by their purchase behavior. Other members of these segments are more likely to visit than members of other segments.
• Priority 2: Proximate Potential Market Segments - These include visitors to nearby destinations with similar characteristics. These customers have indicated the purchase similar products to what we offer. It is not necessary to persuade them to visit an unknown destination, but only to travel to our destination. 
• Priority 3: Expanded Potential Market Segments - This comprises travelers who seek similar products to what we offer but do not now visit the region. They do not need to be persuaded to seek new satisfactions but to satisfy them in our region and destination.
• Priority 4: Potential Market Segments for Additional/Enhanced Products - These market segments are potential visitors if additional or enhanced products are offered. These might be a new type of resort, convention/conference facilities, opening of new recreation resources, or infrastructure improvements. These segments need to be convinced to try out new products we are not known for.

As a practical example, ERA recently analyzed the market for a new resort in the Pacific. We were asked to examine how to reach new customers in what is generally agreed to be a weak market. As part of this study, we conducted an extensive survey of visitors and property owners to determine if these were common database characteristics. The analysis showed a surprising amount of commonality that led to entirely new marketing channels for reaching like customers.

Another example is related by Bob Cotter, Senior Vice President of marketing for ITT Sheraton: “We have invested, as a company, $70 million in a new reservation system that gives us market information and improves our ability to understand our customer base. We can also do database marketing. In February, for example, our 10 properties in Hawaii identified some softness for April, May and June. The traditional approach to that probably would have been to increase our advertising in Sunday travel sections. Instead, we mailed a targeted offer to 650,000 people who travel to Hawaii and we gained $3 million in revenues for those hotels in April, May and June.

The mailing cost about $200,000. The interesting thing is, we looked at the buyers again and are convinced now that we could do it again, but instead of mailing 650,000 pieces, we could mail between 200,000 and 300,000 with 90% results. The new property reservation system and the central reservation system are in synch so we can do more with database marketing.”

The Development of the Customer Database

There is no easy way for a tourism body to create a comprehensive database of its visitors. Visitors use a wide range of travel services through which customer information can be obtained.

There are, nevertheless, a number of steps that can be taken to extend the customer database. The first and most vital step is to develop and maintain a product database and take advantage of the customer inquiry/reservation information it develops. Other steps include:

• Systematically gather information from those visiting tourism visitor centers, parks and other publicly owned attractions and facilities. 
• Reach information-sharing agreements with other tourism related land and facility management groups (e.g., airports) to share visitor data. 
• Collect data from those who telephone or send in coupons from Tourism advertising. 
• Extend and regularly update data on the select list of travel agents and tour operators.  Maintain a well structured coverage of associations, special interest clubs and corporations, especially with respect to convention and incentive travel. 
• Share information on visitors with the air and cruise lines, the hotel chains and car rental companies and take advantage of opportunities to share information on visitors. 
• Develop customer data in the course of research surveys. This is not the traditional demographic and travel patterns information, but information that will help you reach future customers through database technology. 
• Be alert for opportunities to purchase outside databases that correspond to known customer characteristics—e.g., brand loyalty, product ownership, media habits, activity participation, and memberships. 

Uses of Destination Database Marketing

1. Marketing Planning
Information is the basis of planning. With it you can target marketing to maximum effect. Without it, you guess or aim and hope. The product and customer databases are core elements of an information management program.  They tell you what you have and who may want to buy it. They provide marketing direction and the ability to monitor effectiveness.
 
2. Telemarketing
A comprehensive and accessible product database empowers staff to not just provide information but also to direct customer interest and to sell. They can highlight the strong points of a hotel or resort and convey their own local knowledge and enthusiasm. Giving callers something that makes them feel they are getting inside knowledge is a powerful selling tool.
 
3. Repeat Customer Development
Destinations should favorably consider the establishment of a loose but structured association with its repeat visitors. As frequent flyer clubs, hotel clubs, and the like have shown, such an association can offer a number of marketing opportunities. Clubs generate a sense of loyalty in many of their members. At the same time, they act as a defense against others who may be trying to persuade your visitors to go elsewhere.

The benefits of membership can be as simple as a membership certificate and a club newsletter giving advance information on new attractions, prices and events. With the cooperation of the private sector, they can go all the way to price discounts, preferred reservations, etc. One example of such a destination area club is “Club France.” This is considered by the French Government Tourist Office to be a great marketing asset. It is now at the stage where, with the help of the private sector, the benefits are substantial and the members are prepared to pay $65 per year for the privilege of belonging. A sample joint promotion between Club France and the United Airlines frequent flyer program is attached to this paper. 
 
4. Relational Database Marketing Applications
The prime purpose of such applications is to link the customer information in your database with databases that allow you to reach more customers. What is involved is the comparison of your database with others that share the same characteristics as your visitors. 
Relational database work is one of the most productive ways to expand the breadth of your own customer database. You may find new groups of people (and individuals) you had not even tried to reach in the past but that are now revealed as good prospects.

The Computer Reservation System 

CRS is Here to Stay

The CRS is changing the way we do things, changing the structure of the travel industry and causing travel marketing to be irrevocably changed. It is the means of market access. Everyone in the travel business has to face up to it. Sitting on the sidelines and doing nothing is hardly an option anymore. Those who do that will be left behind. Any one seeking growth cannot afford to be disconnected from his markets by this technology. Action has to be taken to protect customers in an environment in which there are others with the technology base to take them away.
 
The Travel CRS World is Dominated by the Airlines 

Destinations and individual or chain facilities looking at the CRS options should remember that the airlines often regard other bookings and providing travel information as an ancillary service. Sabre and Covia’s Apollo each currently have about 20,000 hotels worldwide listed in their systems. The hotels listed, however, are mainly those of the major chains plus independent properties that are particularly well know. These systems also contains basic data on destinations such as the weather, perhaps a map and some of the principal attractions. The big tourist destinations receive most of the attention. These are the ones that will be most often requested and that will, therefore, be the most viable in terms of income to the CRS and cost to the organization being listed.
 
Situation is Unsettled

Although there will be more non-airline activity in these CRS’s, it seems unlikely that this will involve the thousands of small hotels, attractions, and special interest operations that are scattered throughout a country or region. The volume of requests that one of these would receive would be too small to make this worthwhile. Also, the mega CRS’s are too preoccupied with other priorities to handle such listings. They are busy on research and development and on vying with one another for dominance.

Linking with an Airline CRS

When talking of linkage, the emphasis is not on the question of the storage of the destination’s full product in the airline CRS but on enabling that CRS to draw on the product the destination has to offer, when the situation arises. A link with an airline CRS does not rule out the continuance of the destination CRS. On the contrary, the benefits a destination receives from its own CRS will still be there. The service provided by the airline CRS in reaching markets is an added element not a replacement.

There are a number of “universal interfaces” that have been or are being developed. They can act as the link between a destination specific CRS and a variety of airline CRS’s. Entering into this kind of linkage is less a case of, “if” than of “when”.

So what should be done? No individual destination has the budget to compete in the mega CRS battle. The airline CRS’s cannot deliver to most of the individual properties and attractions in a destination on a cost justifiable basis and are not currently very interested in doing so. Some action needs to be taken nevertheless. What is needed is a destination based CRS that for the time being operates independently.

Purposes of a Destination Database CRS

The overall goal is to increase the volume and value of tourism to and within the destination. A destination database with CRS capability can serve this goal in the following ways.

• It provides improved market access for the full range of tourism enterprises—the inns, the small fishing operator, the craft shop, etc. No other system will give them center stage and the marketing thrust that it implies.
• A destination CRS would be available through a toll free telephone and fax number to access the market that does not book through travel agents.
• A destination CRS places the destination in control. Demand can be directed so as to maximize the utilization of capacity or to serve other purposes. The CRS is the medium through which the destination can operate a strong telemarketing program.
• It is also the most fruitful source of expanding the destination’s customer database. This provides a great opportunity to find out more about the inquirers and their interests.
• Leading on from that is the ability the system offers for the development of accurate and up-to-date statistical data. It makes possible more detailed market performance analysis and evaluation of advertising effectiveness.
• The destination CRS will make it easier for both travel agents and individuals to make bookings. Speed is an increasingly important consideration in making a travel decision and confirmation.
• A destination CRS will assist the development of closer cooperation between the public and private sectors.
• The reservations system will greatly assist in making maximum use of the investment made in development of the product and customer databases.
• The customer database can be made available to provide a list of customers to the private sector for direct marketing. Imagine, the tourism organization demonstrates its worth by actually providing a list of customers— rather than attempting to justify a marketing budget based on measures of advertising recall.

There is a wide variety of database experience in the Asia-Pacific region. 

• The more developed systems are in Europe, Australia and Japan. 
• There is relatively little use or experience in database marketing by NTO’s and many travel suppliers in Asia-Pacific.
• Some PATA private sector members are experts.

• Particularly for long haul and medium haul travel where personal confirmation of concerns is particularly important.
• Information kiosks are possibly useful for point of sale presentation but even this experience is mixed.

• Past visits
• Inquiries
• Advertising response
• Purchased lists
• Sharing lists with others

Recommendations on Role of PATA

• Develop education programs on use and potential of database marketing. PATA should consider linking with a direct marketing organization to develop a seminar program for the region. 
• Gather and provide intelligence on structure of customer databases/hardware and software availability/experience. 
• Consider a procurement or clearing house (and quality check) function for currently available customer data lists. 
• Encourage cooperation in joint development of customer databases when that makes sense as a destination package.