THE CHANGING MARKET PLACE OF TOURISM

From Seeing Sights To Sensing Experiences

Peter Billing
Centre for Regional og Tourism Research
Bornholm
THE AGENDA ...

SETTING THE STAGE

 The Business of The Experience Economy
 Being A Tourist/Visitor in The Experience Economy
 Being A Tourism/Attraction Maker in The Experience Economy
 Developing Attractions in the Experience Economy
 INDUSTRIAL SOCIETY POST-INDUSTRIAL SOCIETY
MASS PRODUCTION MASS CUSTOMIZATION
 
FOCUS Efficiency through stability Variation and customization
and control through flexibility and rapid
response
PURPOSE Develop, produce, market and
 Develop, produce, market and offer
offer goods and services at goods and services with enough
prices almost everyone can variation and customization so that
afford almost everyone finds what they want 

FEATURES • Stable demand • Fragmented demand

• Large, homogenous markets
• Low cost, stable quality
• Standardized goods and services
• Long production development
cycles
• Long product life cycles
• Heterogenous niches
• Low cost, high quality
• Customized goods and services
• Short production development
cycles
• Short produc life cycles 

B Joseph Pine ”Mass Customization. The New Frontier in Business Competition”

(1999)

”Before it was all about seeing a customer in every individual.

Today it is all about seeing an individual in every customer.
Jan Carlzon, former MD SAS
 Volkswagen Autostadt, Wolfsburg (2000)
(Arkitekt: Gunther Henn, Henn Architechturen Ingenieure)
• Production laboratry
• Customer centre with car delivery
• Exhibition pavillions based on the nine brands of VW
• Car musem
• Gardens and water
• Amusement park for children
• Ritz-Carlton hotell

2,5 million visitors per year!

 
“It is a way of showing the soul
and heart of the company. We
want Autostadt to serve as the
company’s plarform for service
and communication”
Otto Ferdinand Sachs
MD, Autostadt
Economic offering
Price of Coffee
”Experiences result when a
compay uses tangible goods as
props and intangible services as Experiences
the stage for engaging each
customer in an inherently
personal way, and thereby create
a memory, the hallmark of every
Services
experience”
Pine & Gilmore ”The Experience
Economy” (1999)
$ 5 - 15
Goods

Commodities

Economy
Agrarian Industrial Service Experience
Corporate Theatre
”Volkswagen seems to have seriously decided to be
playful, and rationally decided to be emotional”.
Phil Patton, in Metropolis (November 2000)

• Increased competition for time, attention and money

• Unique products/brands – synergy effects/brand extension
• Experiences and dreams
• From branches to universes
• Culturally dependent economy
 The development of a new experience- and culture based
economic and business dynamic generating profound changes in
the meanings and functions of the urban and rural landscapes.

ECONOMY PLACE

Technology Business/Attraction

Production Creativity Experiences Neighborhood

Consumption City district

Innovation Attractions
Service City

Culture Destination
Region
Production
Produtainment
Sony Center, Potsdamer Platz, Berlin

Experience the goods before you by them

Retail
Shoppertainment
Brands become stores
NikeTown, Chicago
– stores become brands

Restaurants – Eatertainment • Staging

Knowledge – Edutainment • Branding
• Imagineering
Eatertainment District,
Chicago with Rainforest Cafe
• CREATIVITY
 THE CREATIVE SPATIAL DYNAMICS
Richard Florida
• Computer Engineers
The Rise of the Creative Class. And How It's Transforming Work,
Leisure, Community and Everyday Life. (2002) • Academics and Researchers
• Buiness Entrepreneurs
”The key can no longer be found in the usual strategies.
Recruiting more companies won’t do it; neither will trying to • Economists and Financial
become the next Silicon Valley. While it certainly remains • Lawyers
important to have a solid business climate, having an
effective people climate is even more essential. … a general • Professionals, but also ...
strategy aimed att attracting and retaining people – • Architects
especially, but not limited to, creative people. This entails
• Designers
remaining open to diversity and actively working to cultivate
it, and investing in the lifestyle amenities that people really • Journalists
want and use often, as opposed to using financial incentives • Actors
to attract companies, build professional sports stadiums, or
develop retail complexes.” • Artists
• Perfomers
• Authors and poets
• Cultural workers
The Economic and Social Geography The Economic and Social Geography
of the Industrial Society of the Post-Industrial Experience
Society
People Business

Place Business Place People

”Places that succeed in attracting and retaining

creative class people prosper; those that fail
don’t”
Richard Florida
 TOURISM DEVELOPMENT
IN THE EXPERIENCE ECONOMY
THE TOURIST:
Changing demand and markets
Tourism is not not any longer basically about families going on the
tour operator packaged mass tourism destination holiday (and often
being repeat visitors)!
 Increased segmentation (age, gender, ethnicity)
 Changing preferences (Individualized/special interest)
 Variety of acitivties and destinations
WORK AND LEISURE IN A LIFE CYCLE PERSPECTIVE

The Industrial Era

Marriage Work: 23 %
Children Leisure: 24 %
1900 1916 1965

Vacation
Working hours
Pension age
The Post-Industrial Era
Work: 8 %

2000 2020-25 2060 2078 Leisure: 48 %

Travel Higher education Early retirement

Competence
development
Leave of Absence
Swedish Institute For Future Studies 1998
 The Four Realms of the Tourist Experience
Pine & Gilmore ”The Experience Economy” (1999)
Absorbtion
”Into the Mind”
Entertainment Educational

Film Tourism Culinary Tourism

Passive The Active

Sweet
Spot
participation participation

Medical Tourism Retail Tourism

Estethic Escapist

Immersion
”Into the Experience”
THE TOURISM MAKERS:
New Technology, Channels and Products

Tourism is not any longer basically low tech and low-skill

businesses delivering standardized services and products!
 The potentials of ICT, GIS
 Development of new distribution channels (Internet, WAP)
 Innovative product development – new concepts /hybrider
 Destination development – DMOs go RTO / dynamic packaging
 Growing content of knowledge in tourism
Tourism and Attraction Development in the Bothnain Arc
Collaboration and Networks
• Mid-Sweden Universty & CRT (Bornholm)
• Local and Regional Authorities
• Tourism Businesses in Luleå, Piteå, Haparanda, Torneå, Kemi

Competence, Product and Destination Development

• Innovative and attractive products and activities
• Targeting new customer segments
Depart from Natural and Cultural Conditions
Icebreaker Cruise
’Dinner on the Ice’
Ice Hotel
STRATEGIES FOR TOURISM AND ATTRACTION
DEVELOPMENT IN THE EXPERIENCE ECONOMY

CHALLENGES
 Understand the changing demographics and customer segments
 Recognize the paradox of the Post-Industrial condition
Global Economy
Economy of Trust
Local Relations
 Exploit the creative potentials of the Experience Economy
 Depart from the existing local & regional recources
• Natural recources
• Culture & history
• Human recources
 Stimulate creative concept- and product development
 Establish cross-sectorial networks and co-operation
 Focus on knowledge, creativity and innovation
 Establish active partnerships with universities and research

Recognition of that Tourism and Attractions are

active parts of the Econimic Development in the
Experience and Knowledge Economy!
 Stenbrudsgaarden, Nexø, 1760

CENTER FOR REGIONAL- OG TURISMEFORSKNING

WWW.CRT.DK

Peter Billing
billing@crt.dk