TOURISMlink

1. TOURISMlink Business and Governance Model

2. Context, concepts and solution proposal

3. The situation today: fragmented industry context

4. Current interoperability based on point to point For the TOURISM industry point-to-point ‘connectors’ has no economical viability as a very large number of connectors would have to be built and maintained.

5. Proposal for future model

6. Proposed model: federation of open hubs on a common messaging language “United in diversity” • Benefits: • Existing technology • Content ownership • Networking effect

7. TOURISMlink solution architecture

8. TOURISMLINK Scope Framework for interoperabitilyaccessible and open to all

9. The organisation

11. TOURISMLINK Scope

14. Mission of TOURISMlink

15. By the industry, for the industry Specifically designed for SMEs… Its main aim is to help SMEs to improve their competitiveness a better position in the global tourism market by facilitating and accelerating the digital connection and thus responding better and faster to the evolving market needs. …and OPEN TO ALL a key to success is to identify and broaden all forms of collaboration or cooperation and to involve major ICT providers

16. Benefits for the sector

17. Travel agents and tour operators • Easy access to large market through only one channel • Access to niche market, destination by destination, including SME´s. • Access to all complementary offer, not only accommodation • Creation of new and differentiated products for specialized customers Accommodation and complementary offer • Easy access to large market through only one channel • Access to niche and specialized companies in source markets • Free tools to manage the allotment, prices and reservations • Channel manager to distribute the inventory through some distribution channels in Europe

18. Legal Form

19. By the industry, for the industry

20. The Members

21. TL MEMBERS

22. Benchmarking

23. Online survey among HOTREC’s members on the tools used and the price paid (January/March 2013 – 8 associations)

24. Distribution Models Branding/ Management group (Leading Hotels, Worldwide Independent Travel Network…) IDS/OTA (eDreams, Expedia, Booking, Lastminute…) • Differential mark for independent hotel/travel agencies (quality mark or management group) • Adhesion to brand image and satisfy quality standard • More pressure to negotiation • Commission and annual flat fee • Own reserves central • Strong positioning in the online market • Intermediaries between hotel and customer • Net rates and commission-per-reserve • Access to own external web GDS (Amadeus, Worldspam, Galileo…) • Sales tourism services (flight, hotel, train, rent-a-car…) • Sales through travel agencies (online/traditional) • Connection between the suppliers´ reservation systems (airlines, hotels, rail companies, rent-a-car) and the distribution • Commission to services provider Infomediaries (Kayak, Tripadvisor, Trivago…) • Intermediaries between info provider and info consumer • Complex search to adjust specify needs client • Revenue per advertising and sales Innomediaries (Groupon, Letsbonus…) CRS (Keytel, Transhotel, Hotelbeds…) • Clients community • Potentiate interaction between customer and enterprises • Offer daily discounts by price to your members • Ensure client maximum volume until limit • Offer reserves system to hotels • Manage hotel inventory • Commission-per-reserve or flat fee for adhesion

25. Distribution Models Amadeus (GDS): Commission from hoteliers + compensation Travel agents MicrosFidelio (PMS): license cost + monthly fee to hoteliers Rate Tiger (Channel manager): license cost + monthly fee to hoteliers Expedia, Booking (OTA): commission or mark-up from hoteliers per booking Trivago (Infomediaries): commission or mark-up from OTA´s per booking Hotelbeds (CRS): commission or mark-up from hoteliers per booking Google: advertising National Tourism Board: public money

26. Market potential

27. Potential EU market (Eurostat 2010, ECTAA 2009) Accommodations * (hotels, apartment hotels, motels, roadside inns, beach hotels, residential clubs, rooming and boarding houses, tourist residences): +/- 150.000Distributors (travel agents and tour operators ) : +/- 70.000Complementary Services (restaurants, cafes, museums, natural parks ): +/- 300.000 Infomediares (OTA, CRS, IDS..): +/- 100

28. Possible Business Models

29. self-sustained in two years time.

30. self-sustained in two years time. Business model options • Option 1: distribution companies contribute • Option 2: services providers contribute • Option 3: both operators contribute • Option 4: public DMO contribute • Option 5: private sponsors contribute

31. Business model options Option 1 Option 4 Option 2 Option 3 services providers pay both operators pay distribution companies pay DMO public pay • Pay by offered services or advertising • Don´t pay for platform access, fee or commissions per reserves • Incentive for productivity • Strong competition of free models • Pay by fee or commission per reserves/ transactions • Simple to manage • Another intermediary without added value • Pay by fee or commission per reserves/ transactions, and pay for technology tools • Strong competition of free models • No commercial risk • Not sustainable model and need a constant flow of money Commission (Expedia, Booking); Fix fee (Rate Tiger, Microsfidelio); Group on Travel Open Apps, BookNorway, TOURISMlink (2012-2014) Trivago, Google Amadeus, Google

32. Option 2: services providers Option 2: Accommodation and ancillary enterprises pay • 3 levelsaccess • Level1: free accesstothespecificinformation (participatingcompanies, indicators of businessactivity and online training) • Level 2: individual subscriptiontoupgradetheaccessforadditionalservices • Level 3: groupsubscriptionforgroups/ organizations/ associations/ DMOs with specialaccess and discountonservices • Otheractivities: Open Apps Store

33. Level 1 Level 1: free access • List of participating tourism companies • Indicators of potential business opportunities (nº transactions, turnover, participating companies, type of business, markets involved) • Online training course on innovative subjects (ecommerce, online marketing, SEO, SEM, etc)

34. Level 2: individual access Twooptions: ModelbasedonAnnualfee Mixedmodel with FixedIncomes and TransactionCommissions • Assumptions (based on real data in destination pilots): • N. of potential participating companies (200) = 50 large companies, 100 SMEs, 50 complementary offer) • Average number of accommodation rooms = 150 (large companies), 50 (SMEs) • Average occupancy rate (45-60%) = considered 50% • Average season period (8 months) = considered 6 months • ADR (50-72€) = considered 60€ for big companies, 50€ for SMEs • RevPar = 30€ for big companies, 25€ for SMEs • Online sales rate (20-40%) = 30% for big companies, 20% for SMEs

35. Level 2- model a) Annual fee First and second year of operation given the same assumptions • Paythefee • getaccesscredentialstotheplatform • Use thetoolsprovided (PMS, CRS, Channel manager, BI) • Online training • Makingbusinesswithotherparticipatingcompanies

36. Level 2- model b) Annual fee + commission First year of operation

37. Level 2- model b) Annual fee + commission Second year of operation given 5% increase the online sales- access new markets and niches

38. Annual Cost platform • Operationalcost • Cost of structure of non-profitorganization • Management • Travels • Overheads • Costrelatedtothedescentralised local associations 120.000 €

39. Conclusions First model (Annual fee)– it´s not sufficient to cover the first year implementation cost Increase thenumberof companies Second model (Annual fee + commision 1-2%)– it recovers the cost and it is free for complementary offer Good incentive

40. OPEN DISCUSSION