Tuesday, March 10, 2015

Defending Loyalty To Mallorca

April Rinne is a name that probably won't mean anything to you. She is the chief strategy officer for something called Collaborative Lab, "the leading source of expertise for companies and governments that want to embrace the collaborative economy". Among other things, she is a "young global leader" at the World Economic Forum and has been an adviser to the Bill and Melinda Gates Foundation. She has, says her biog, "illustrated her thought leadership" in various publications. Thought leadership? What on earth is that?

Depending on your perspective, Rinne is either one of those infuriating Americans who come along on a regular basis and appear to invent entire alternative universes of business and marketing replete with jargonese and gurudom or a crystal-clear visionary of a brave new future world. Whatever your perspective, these are universes or worlds remote from the man or woman booking holidays to Mallorca. They appear divorced from everyday realities but sometimes they can be important, and what April Rinne deals in is important.

The notion of the collaborative or sharing economy is simple enough. You have something to share - let's say it's an apartment that you own - and someone wants to take up your offer. This is an economy that has always been with us, but technology has vastly expanded its potential, so much so that - at its most extreme -what you might have to share can be shared with anyone from anywhere. Middlemen cease to exist. All that is needed is a facilitator, a third party which enables the sharer to be in touch with his or her potential market. This is the world of P2P, peer to peer or people to people. This is the world of Airbnb property sharing, Uber car sharing and many others.

Rinne has made an observation which sums up the rise of P2P. It has taken Airbnb, the world's leading internet portal for tourist property rental, just six years to reach a level of users (customers) that Hilton needed over 90 years to attain. It is a stark observation of the battle between hotels and private accommodation that is going on across the globe and so not just in Mallorca, and it is a battle which, despite moves to legislate, appears to be one that the hotels cannot win. Rinne believes that the onslaught from the likes of Airbnb has only just begun.

Confronted with this competition - typically decried by the hoteliers as "unfair" - how can hotels fight back? A clue as to how they can lies with understanding the appeal of P2P and the apparent shifts in consumer thinking and behaviour, in particular those of the so-called Millennial generation. Tourism, according to accepted P2P wisdom, is about personalisation, about "experiences", about contact with local people in destinations. It is the depersonalised nature of hotels which turns the traveller on to a P2P "experience" and which also deters those Millennials who supposedly are also interested principally in experiences.

Of course, much of this sounds and often is marketing gobbledegook, but there is nevertheless a good deal of truth about depersonalisation and especially that which comes with the package holiday. This said, hotels have woken up to the need for greater personalisation and also to the need for "experiences". Many can't help telling potential clients about the experiences that await them or shoehorning them in to brand sloganising. And it is this branding which holds the key for hotels and, more importantly, tour operators.

Experiences and personalisation have become the hotelier and tour operator zeitgeist as has the need for branding and so brand loyalty, but in emphasising the brand, tour operators and indeed some hotel chains shift the focus away from the destination. What is being sold, therefore, is the brand, and where it is located is secondary. A consequence is that loyalty to the destination, be it Mallorca, its individual resorts is potentially loosened. And experiences and personalisation for the P2P traveller can also undermine specific destinations. These travellers place a premium on the social-media aspect of sharing information and recommendations. If they are for somewhere other than Mallorca, then so be it.

The importance of these trends can be over-exaggerated. The traditional package holiday, for instance, and despite repeated reports of its death, is not about to disappear any time soon. But they are trends which cannot be ignored and so make it imperative that Mallorca acts to confirm and reinforce tourist loyalty to it.

There was a statement the other day that the "summer sells itself". Well yes, it does, but to believe, against the background of these trends, that "selling" is not required is wrongheaded. It is needed as never before, and so Mallorca needs its own assault, one it is currently failing to deliver, that of loyalty building through social media. And, moreover, it is an assault that needs to embrace, not deny, the P2P revolution.

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