Finally a viable alternative business and distribution model for tourism SMEs
The key to the future of tourism development and its role in addressing the social, economic, and environmental problems of our time, lies in providing small- and medium-sized tourism businesses with
The key to the future of tourism development and its role in addressing the social, economic, and environmental problems of our time, lies in providing small- and medium-sized tourism businesses with direct, low-cost, and non-commission based market access. It must, however, only be given in exchange for their compliance with a set of flexible best practices – that costs them nothing at all to implement.
The business model developed by the Responsible Tourism & Special Interest Travel Alliance (RTA) does just that and can be implemented quite rapidly, providing exponential benefits and solutions to a host of pressing problems well beyond those of tourism alone.
The situation at present
The traditional commission-based, supply chain distribution system denies the tourism macro and SMEs (small- and medium-sized business) fair market access. The absence of a level playing field seriously inhibits their development to the detriment of the global tourism industry as a whole.
Consider the facts, across both the developed and developing world, tourism SMEs:
• Employ the vast majority of the world’s tourism workforce and feeds their dependants.
• Make up some 90% of tourism industry products and services worldwide.
• If operated responsibly, would be one of the most powerful weapons we have available to us in addressing the world’s social, economic, and environmental problems.
• Could resolve their market access skills quite easily, if the cost and IT skills barriers that hold them back were removed.
The need for an alternative distribution system for tourism SMEs
The lack of affordable market access for tourism SMEs is without a doubt the single biggest problem facing the tourism industry today, and the situation worsens daily as the supply chain is being consolidated – ceding greater control to the middlemen.
The failure of governments to ensure that their SMEs have that market access deprives both developed and developing world economies of vast revenues that could and should provide opportunity, education, and development for their people. The leakage of enormous amounts of money lost in outsourcing the marketing and promotion of their national tourism product can now be stopped.
The advances in Internet-based technology, Internet penetration, and the increase in the level of social media use have reached a point where it is now viable to introduce a lower-cost alternative to the traditional tourism distribution model – one designed to ensure that almost all of the revenue from SME-based tourism accrues to the host country, and perhaps more importantly, that it is injected into the economy at the community level and under a system that ensures it is spent responsibly.
The advantages of having two different distribution systems
Those (mainstream tourists) willing to pay for the services of a travel agent, enjoy the benefits in terms of time and effort saved and will continue to do so, knowing they are getting value for their money. Their number may well increase as the system becomes more transparent.
Those (special interest travelers) who want more control and a wider choice, and who wish to “do it themselves” will save money by doing the legwork themselves. The tourism SMEs that service this group and who have their compliance with “best practices” checked by them, will together drive the development of responsible tourism for the benefit of all.
The SMEs themselves can serve both groups without fear of conflict. The one group is paying a surcharge for the agent’s service and is happy to do so. The other group receives a discount for booking direct, but as an RTA Club Member must make a donation to a responsible tourism support group when booking. They are also obliged to submit a report back to the RTA, verifying the SME’s best practice compliance. It is simply a matter of customer preference in action on a level playing field.
Those in the mainstream supply chain who can justify their fees or commission, based on the quality of the product or service they provide, will flourish. Those who cannot will fail. All tourism industry businesses will be able to use their standard of service, safety, security, and best practices to differentiate themselves from their competitors, while their customers will find it easier to make their choices based on value for money and not price alone.
The mainstream tourism industry product and service providers will be better protected from those who would squeeze them for lower rates in difficult times, a practice that has forced them to cut salaries; lay off staff; suspend training; and reduce maintenance, safety, and security to unacceptable levels.
Implementing the RTA business model
As so often happens in life, the problems in one area can provide a solution in another and vice versa. On one hand, we have literally hundreds of tourism SMEs without the IT skills and/or the funds to get themselves online in a best practices compliant format. Under the RTA business model, however, they have barter goods (rooms, tours, courses, etc.) with which to compensate those who can assist them to do so.
On the other hand, we have again, literally thousands of university graduates (and others) with good IT skills but, due to the economic situation, are without immediate prospects of gainful employment in the near future. Many of them would take the opportunity to travel, using their skills to help others by assisting tourism SMEs (at home and abroad) get online in a responsible tourism compliant format, if they could at least cover their costs while doing so. Under the RTA business model, that is possible.
Governments can use this to their advantage
Governments ponder solutions to the unemployment problems at home while struggling to meet their foreign aid commitments. Why not channel some of those job creation and foreign aid dollars through the graduates (and the qualified unemployed), subsidizing them to train for and work as “compensated volunteers,” assisting tourism SMEs to go green and get online. They could and should start at home first, helping the recovery of their own tourism industry and then head to the developing world as ambassadors for their countries. The RTA Volunteer Corps has been established to help them to do just that.
If governments were to provide direct subsidies to the graduate volunteers that covers at least the cost of their training, they would receive multiple benefits for the one investment:
• Increase the pace of recovery of their tourism industry’s SMEs.
• Bring down their unemployment numbers for both graduates and of new employees in tourism.
• Get far more value for money, and a much better result, from their foreign aid contributions.
All governments, the tourism industry, NGOs, foundations, and charities, as well as the formal education sector should evaluate the costs versus the benefits of supporting this alternative business and distribution model for SME-based tourism.