Sweden cheaper than ever

Being a tourist in Sweden is cheaper than in ages. A hundred swedish kronor is equivalent to USD 12,16, EUR 9,03 or GBP 8,45 today. It´s a 40% drop in value of the swedish currency since april 2008. This means business for incoming tour operators and overseas agents. However, Riksbanken (the Central Bank) says it´s a temporary situation and expects the krona will be back at normal rates within a year or two. The reason is that, despite the international recession, Sweden has a quite strong position compared to other countries with an overplus in the current account balance.

I wouldn´t say it´s now or never. But it´s definitely a chance to see Sweden at bargain prices this summer.
/ Curt Landin

Here we go again

As I´ve mentioned in previous postings, Sweden is investing hundreds of millions of kronor in tourism development all over the country nowadays. It´s everything from building the worlds biggest wooden moose to indoor rapids, restored viking villages and witch hotels. Projects aimed to increase tourism in rural areas of Sweden. Sounds fine in days of recession, doesn´t it? Well, it would be great news if we didn´t repeat the same old mistakes.

Imagine you lead or own a company manufacturing whatever, be it cars, refrigerators or mobile phones. Or you offer services to your target group of choice. Let´s say you run an accounting firm, barbershop or a chain of restaurants. Traditional top-down management models and business practice works perfectly OK here. You have a vision, form your business plan, set your sales targets and implement the operational strategies.  It´s your money invested, you´re in charge of the entire business process and, if you succed, you get the profit.

Tourism is different. Why? Because nobody owns the whole product. For tourism services, you have to cooperate in production, marketing and distribution to reach the market. This makes tourism development somewhat tricky. Those who are responsible for the resources used, like roads, nature, transportation etc, don´t get much of the cake when the guests finally arrives. Therefore, tourism development planning requires an entirely different approach, bottoms-up. This means strategy work starts abroad, by the distributors and their clients defining the products and target groups, to be continued by people at operational level in Sweden forming the necessary cooperations and product development needed.

It´s a question of deciding who is doing what? In which order? On whose mandate? And with whose money?

Tourism development strategies follows as a result of this, in contrast to other industries where in most cases an executive group work out the business plan and then implement it in the organization. Tourism products is about cooperation and delivery in a series of moments-of-thruth, why it´s crucial that those who will be delivering the services are involved in the decisions and strategy work.

Nevertheless, a quick glance at a number of the current projects, if not all of them, shows that the development plans are written primarily to fit the rules for EU-funding, by tourism executives top-down, rather than what´s needed for successful development of tourism destinations.

It reminds me of Whitesnakes wonderful rock ballad, Here I Go Again. Enjoy!

Curt Landin

Investment boom in tourism

Recession times are investment times, an old friend said to me a while ago. It seems to be true, at least within tourism. Huge amounts are invested in tourism these days and there´s more to come.

As an industry, tourism is different from other markets. Tourism requires more cooperation between

Now in Sweden?

suppliers to put together packages to a total travel experience. There is also an existing worldwide network of distributors that´s not just satisfied with their present programs, they´re also regularly looking for new destinations and unusual tourism attractions. And last, but not least, tourism is depending on a number of society owned resources, like nature reserves, public transportation and common services for the daily life.

In tough times, public funding traditionally has been some sort of a sheet anchor and so it turns out nowadays too. Everyone benefits from an increase in tourism.Sweden is now investing hundreds of millions kronor in tourism projects thanks to co-financing from the European Union.  Some of the projects going on includes…

• A triple destination development at The High Coast around Sundsvall city
• A new winter destination in Härjedalen county
• Local tourism development projects in a most of Swedens communities

…just to mention something. And there is more to come. One of the more fascinating investings I´ve seen are  probably the plans for a new chinese (!) town outside Gävle. In Sweden. With a Mongolian village in Håbo, not far from Uppsala. It´ll take at least a Billion SEK (~US$ 120 Million) to turn the plans into reality.

Plans, you say… we´ll see… Well, I wouldn´t have believed it if they hadn´t already built Dragon Gate (see a TV-clip here ). Now they want to expand it to be Dragon Land. I think it will be a success. Remember where you read it first.  That is, if they manage to handle the Swedish administration and bureaucracy, which sometimes is a nightmare…

The swedish tourism industry grew to a total turnover of SEK 215 Billion (~US$ 27 Bn) last year, an increase by 10%, while foreign tourists expenditure in Sweden raised by almost 20% to 75 Billion SEK (~US$ 10 Bn). No wonder we´re investing. And it´s not only in Sweden people are investing these days. Despite the talks about tourists taking shorter holidays closer to home, there are long distance destinations that are cheap for living once you arrive there.

Like Thailand. The economy is expected to grow 4-5% in 2009, while property investment rates are as low as 3,75%. Resorts and residence clubs are being built all over the country at an amazing speed. One of the reasons is that the Thai property market is well insulated from the global financial crisis as it is not fuelled by debt financing as it is in most western countries.

It has been reported that even the American property billionaire Donald Trump will join the investment and development of a new luxury retail plaza with Gaysorn Group. The new plaza, located  at Ratschaprasong Intersection, Bangkoks prime retail site, is intended to compete with two direct rivals nearby, Central World and Siam Paragon. 

A number of Swedish sports celebrities, like Alpine ski world champion Ingemar Stenmark, tabletennis world champion Jan-Ove Waldner and former NHL pro Börje Salming has also invested in Thailand living, according to Swedish media.

There is hope for a future.

/Curt Landin

My apologies for haven´t been blogging for a while. I´ve been busy with producing our new website during the winter holidays. Check it out and let me know what you think: www.naturalconsulting.se

Swedentourism blog in international media

Every now and then I´m surprised how the blog stats suddenly goes up dramatically. I´d like to think it´s because I´ve written about something interesting, but it´s also nice with a helping hand. Thanks to the Blogburst network I´m happy to announce that the posting on “Know your clients – social tourism marketing” recently was published by Reuters, the world´s leading source of intelligent information for businesses and professionals according to themselves. Yeah, that´s where I want to be … It was also inspiring to see the posting on “How about dating a dolphin” in Chicago Sun Times a couple of weeks ago.  Not bad for a snowcovered blogger from Sweden, eh? Thanks a lot, BlogBurst.

/ Curt Landin

7 Growth industries characteristics, part 2: pricing

Travel trade commission structure

Are you one of the lucky guys that are running a tourism business with more demand than what you´re able to supply? I thought not… they´re a rare species. Have faith, there´s help to get if you activate a network of distributors. One of the most effective tools to get others to provide you with lot´s of customers is your pricing strategy.

A packaged tourism product generally contain three core elements: Transportation, accommodation and activities. It´s as simple as that. Or is it? A closer look reveals that these elements might contain a number of components, such as arrival services, transfers & in-country transport, accommodation, food, guiding, activities, experiences, lectures, entrance fees, rental equipment, tipping, baggage handling, service charges, taxes, commissions and administration costs.

It may seem appealing to be able to sell your product exclusively to clients that book direct with you, thus saving on commission, but it can be quite stressful with todays client trend to book later and later. It also leaves you with all the marketing and sales stuff. If you´re cooperating with the travel trade they do it for you, handle all the pre-tour enquiries, administration and provide you with the resulting business, planned and prepared.

When you´re developing a pricing structure for your products it´s s important to understand that there could, and in most cases should, be one or more other entities involved. If you allow them to make a reasonable profit on your tours, they´ll open their customer databases and give you access to an audience you would never have reached by yourself.

Overseas tour operators and clients booking direct often want service providers to provide a range of services rather than having to book and pay 3 or 4 directly service providers in the region they are visiting. If there´s no incoming tour operator or destination management company available, one of the service providers has to be the product owner. This means taking  responsibility for finding, booking and paying for all the services the tour operator or client needs and, consequently, taking this into account when making the quotations and pricing.

One of the most common mistakes tourism entrepreneurs make is to sell their services cheaper to direct sales customers than if they´d booked through an agency or tour operator. Big mistake. You´re out of your distributors´ programmes in the wink of an eye. Instead, your rack price should be the same no matter where the end client makes his reservation.

Commission should always be viewed as a marketing cost and budget for as such. The image above presents briefly the travel trade commission structure and the effect it has on the end price for services booked prior to client travel to the destination. There are of course a number of other requirements to meet if you´d like to be taken seriously by the travel trade. More on that next time.

/ Curt Landin

7 Growth industries characteristics, part 1

You´ve probably heard of them, those successful companies that comes out of nowhere and reach the stars in the wink of an eye. Or the slow but steady ones that step by step grows from a small start-up to a profitable corporation more or less unaffected by seasonal fluctuations or recession times. How do they do it?

There are some characteristics they have in common. I thought I´d point out some of the most important ones in a short series of 7 advices, since these seems to be followed in many businesses, but for some reason not within tourism.

1. You need a focused product portfolio to clearly defined clients.
It´s looks like an axiom, but it´s quite common that tourism businesses are offering more or less “everything to everybody”. People coming to a destination are served a smorgasbord of activities. Especially when public institutions like municipalities or tourism information centres are responsible for the marketing (of attractions they don´t own), marketing tends to be general where brochures, ads and websites are presenting whatever there is to do and see at that place.

If you are a supplier of tourism experiences within such a system, you´re out of control. If you´re lucky, enough guests happens to find your services interesting. But you never know. To grow, you have to be in charge of your marketing and develop your product portfolio to a clearly defined target group. Thus, you learn how to provide improved services over the years for their specific needs and what kind of marketing information that works.

Check out Nomadic Journeys, for example. They´ve build a whole tourism industry over the past 15 years. In a third world country far from the beaten tracks, Mongolia. From being a small tourist guide provider they are now an international well known incoming tour operator and destination management company with a distribution network in 26 countries. How did it happen?

They developed a series of tours, tailor made for certain target groups:

Fishing tours are sold by fishing tour operators and marketed in sport fishing magazines. Trekking tours are sold and marketed through trekking companies worldwide. Adventure tours are distributed by… well, you get it.

They are now building a new multi-million-dollar hotel to meet the demand they´ve created themselves. In a country where there´s no public funding and getting a bank loan is a nightmare.

The key here is the packaging and distribution for clearly defined clients. So is pricing. Which we´ll talk about next time.

/ Curt Landin

Know your clients – social tourism marketing

It´s amazing how much money tourism organizations are wasting on inoperative marketing. Ads and brochures that´s actually read by just a fraction of the estimated target group. Swedish municipalities, for example, are printing 4-colored brochures to an amount of SEK 800 millions a year (~US$ 100 Mn). Most of these fancy brochures are dropped in the waste bin after a quick glance at some nice photos.

Not to talk about advertising. H-U-G-E amounts are spent on traditional ads. Sure, you´ll probably reach some interested clients. But at least 3 out of four readers are not.

The same goes for measuring the results of tourism marketing efforts. Old methods like counting guest nights and passenger figures are still widely in use. I would say that businessmen coming to your town for a meeting with their local supplier or distant-living relatives returning home for a wedding party,  is not a result of tourism marketing just because they spend a night or two the local hotel. They would have come anyway.  “We can´t change measuring methods. If we do, we can´t compare it to previous years or other destinations”, is a common explanation. Stone age, I say. Give it up.

Before they travel to a destination, tourists search for information, evaluating the options. Will it be your place or somewhere else? People likes to know where they´re heading. Some of them will choose you, most of them will not. 

Like any company, tourism organizations measures their “products” performance. A customer satisfaction survey or similar questionnaires.  But what about those who considered your place, but choosed not to come? If you´re marketing by ads and brochures, or collecting surveys at the hotel or tourism centre, you´ll never know who these people are or why they didn´t show up. 

Todays E-marketing tools allows you to communicate with them, but I´m not talking about a simple newsletter. I mean dialogue. Questions. Answers. Problemsolving. They´ve already expressed an interest in your place, but for some reason they choosed some other destination this time. It´s your job to find out why and then change peoples attitude. Next time, or after a while, you´ve turned a lot of them into real customers by caring for their needs.

There are a number of ways to gather and save information about potential customers that are explicitly interested in your tours or destination, without having to spend a lot of money on those that are not.

One way is to build a society, club or community. Social marketing with a specified topic. In it´s simpliest form it might be a blog with registered users. Or running travel clubs for different tourism niches, like fishing, local culture, ancient architecture or whatever your destination has to offer certain target groups. Be the expert. Or invite one to provide you with expertise.

Competitions, lotteries, research studies, interviews, articles and movie clips are just a few samples of what´s attracting people enough to fill in their names and numbers because they want the information you´re providing. It´s all about content and interactive dialogue. You have to know your clients.
While your customer database is growing by itself, you can let other businesses that are of interest to your audience hang on to your marketing. Or you can join theirs.

But that´s another story.

Are you in a winning tourism team

Michael Moore, the famous American author, once asked his (American) readers: “So you think you´re clever? OK, who´s the president in Mexico? See… Most people in other countries knows who´s leading the country next to them”.  A quick glance at the Swedish incoming tourism market shows that, with a few exceptions, everybody´s basically promoting the same recipe: a dash of Stockholm, sweetened by an archipelago cruise, some crystal glass shopping in Småland and possibly spiced up by a night at the Ice Hotel winter time.

If you´re a standard tour operator or travel agent that´s fine with me. They are great first time in Sweden-experiences. But if you´d like to offer outstanding tours and this is what you suggest to your clients, I would say you´re on the wrong track.

Creating outstanding tours in Sweden is simply a question of cooperation but, honestly, how well do you really know those who are taking care of your clients in Sweden? And why would you cooperate more with them than just buying the ordinary tours?

Well, 1 + 1 = 3. Two approach angles are better than one. You complement each other, which improves your chances to close the deal with your customers and you get better sales results. When you get to know someone you also support each others in times of trouble and share the joy in happy days. You get inspiration, have fun at work and, more importantly, you´ll learn a lot, which improves your competence and sales ability. Your customers get a better service and quality, you get more customers, more money and hopefully a better life.

From my experience, there are a number of distinctions for non-functional teams:

• Watched communication
  If you speak up about something, you´re quickly criticized
• A lack in disagreement
  Actually, a degree of disagreement is good for business. In a team it must be allowed to express different opinions. Winning teams can handle it. Losers can not.
• Unwillingness to share information
  You keep some “secrets” to yourself. It might be good to you, but not to the team. And in the long run, you´ll most often end up being dumped. Tourism is teamwork.
• Low level of trust
  In tourism you can´t control everything. You have to rely on others. Double checking details is good, but if done repeatedly the wrong way you might rub a few feathers. Trust me…

So, what´s the characteristics of a winning team? I would say there are a number of trails leading to the road of success:

• A common vision and goal
  Do you and your Swedish supplier see the same picture of the future? Where are you heading within a couple of years?
• An identity as a group
  Are you talking about “we” and “them” or are you and your suppliers the same “we” ? Which one? Are you included in their “we” or is there a gap in between?
• Each member has a clear role within the group
  Do the people at your suppliers company understand what you´re expecting from them and do they realize the importance of their contribution to your tours?
• Clear and obvious “game rules” (routines, responsibilities, behavior)
  Tourism is a chain of services provided by a number of people at the same time it´s consumed by the guests in a series of moments of thruth. Successful tourism companies delivers. What they promised. Consequently, everyone involved must know exactly what to do, how and when. Do you?
• A high degree of motivation
  Tourism is about exploring and experiencing. You´re actually selling something that doesn´t exist (yet). It´s something that will be produced later, upon arrival of the guests. Thus, the staff involved has to be engaged and motivated to convey a sense of feelings and emotions for the destination or program you´re promoting.

The swedish tourism entrepreneurs I´ve met are a bunch of nice chaps, so why don´t you give a few of them a call just to get to know each other. It´ll boost your business and you´ll get a new friend or two.

/ Curt Landin

Tourism top stories

How about having all the best travel related top stories continously updated and easily accessible wherever you are? Now you can. The site Alltop.com is a “digital magazine rack” of the Internet, containing high-quality information with unusual breaking news, stories, and rumors from sites you´re already visiting as  well as reviewed and evaluated niche-sites covering almost any special topic.

Alltop.com has grown tremendeously in just a few months to a valuable resource for anyone wanting to research a certain subject or industry. The site really rocks, challenging traditional web resources with a cool and fun attitude from the founders who describes themselves as “two guys and a gal in a garage“ by simply stating that “We like to shake things up and urge people out of their comfort zones”…

One of the best features is that you can customize its appearance to cover exactly those topics you are interested in.

I´m proud to announce that Sweden Tourism – A blog for tour operator now is featured on travel.alltop.com. as the first Swedish tourism site. Recently the Sweden Tourism blog was also approved by newsprovider Blogburst.com, feeding news to some of the world’s most popular media sites, such as Reuters, USA Today, Fox News and others.

I´d like to welcome the new readers that has dropped in from all over the world the last weeks.

/Curt Landin

10 Natural tips about selling

Todays tough business climate makes it even more important to be able to sell. Most industrys have seen an increase in competition, where the globalization has affected companies of all sizes and tourism is no exception. Thousands of articles has been written about how to “behave” for being successful in selling. Not this one.

From my experience, the human nature isn´t easily captured in simple role models. We´re more complex than that. Which is good news. Natural selling does not mean “born with”. It´s not that you can or can not do it. As I see it, it´s more of  a natural and serious attitude to selling, more based on emotions and personality rather than analytical facts. Your ability to be a natural seller can be trained if you´ve got the will to do it. However, it does require you to challenge your own style, be interested in other people as well as your personal development.

1. Be your self
Don´t play roles. There are numerous courses in ”successful sales behaviour”. I guess many of us have a common picture of a “vacuum cleaner salesman”, convincing his clients to buy something they don´t really need. Honestly, how many times have you bought something from such a person? Contrary, you don´t even notice a professional seller. You´ve probably felt that you´ve made your own decision to buy whatever they sold to you, because they knew what they were talking about, were nice & friendly and they solved your problem.

2. Realize that nobody loves everyone
When it comes to selling, it´s more important how you´re perceived by the client than having an in-depth knowledge about your product. Confusing? If your client likes you, you can solve anything together. Then it becomes equally important to know what you are talking about. But if they don´t like you, it doesn´t matter how much product know-how you´ve got. If the chemistry just isn´t there, don´t be an actor pretending to be someone you´re not. Let it go and scout out a new prospect. It will spare you a lot of time. And money.

3. Work methodical
Selling is often pure matemathics: “to get X orders I´ll have to give 4X proposals. To give 4X proposals, I´ll have to meet 10X potential clients. To meet 10X potential clients I´ll have to make about 40X phonecalls”. Every day.

4. Ask. Ask. Ask.
Statements doesn´t sell. Questions do. You´ll have to find out your clients problem (=their need) before you present a solution to it. Ask them. Then ask follow-up questions. Summarize to show you have understood everything correctly, as a confirmation to your client.

5. Use the words “because” and “means”
It´s useless to babble about all the features your product might “have” or “is”. Nobody is interested. As a client, I want to know what these features means to me. Often in terms of time or money. Sample: “We use chartered planes on some routes. This means you get more time to experience the local culture and visit three countries instead of one, because driving would take days and regular flights are just twice a week”.

6. Find out who´s in charge
There´s often more than one person involved in a buying decision, especially if we´re talking about higher amounts. Find out who they are, simply by asking. Try to meet them all, preferably all together so you hear the discussions and, consequently, can give proper information, argue for your offer and meet objections when/if something is questioned.

7. Find an easy way in
Find someone who likes you at the client company. Could be the receptionist. This person is not necessarily one of those allowed to make a buying decision, but he/she might very well know where there is a need for your services. Ask your way forward to the person who´s got the problem your product solves. Within tourism, it might be a distributors need for a better commisionable program or a company clients need for a corporate conference, study tour, board meeting hideaway or whatever. If you´re doing your job well with this person, he will lead you to the decision-maker.

8. Have a goal
Define a goal for your selling work. You have to know where you´re heading, otherwise you´ll probably end up somewhere else. “Build better client relationships” doesn´t work as a goal. “Make 30 phonecalls a day”, “find out who´s making the buying decision at company X” is better. Sale targets should be specific and lead you forward to closing the deal.

9. No = maybe
A “No”  is often a wish for more information. Unless you aren´t way out of your target group. As long as your product reasonably corresponds to your clients needs, there´s a basis for buying decisions. These can be influented by facts, such as price and performance, but also by your commitment and relations. Don´t take no for an answer. Ask questions.

10. The 2nd sentence is most important.
In your first sales call to someone, they should hear you smiling. Stand up while talking, take a look in the mirror and sing a song before you call. Belive me, it´ll do wonders for your voice. Everyone will listen to your first line: “Hi, this is Mark Anderson at XY Company”. But then? The 2nd sentence will make or break it. You need a hook, something different and unusual, but true. Something that makes it worth listening to your offer. Spend some time to find out some alternative introductions for different target groups and try them.

The punch-line: Ask a lagom tricky question. A one your client have no sufficient answer to, but you have the solution. 

You´re a friendly, natural talent. You´re in.

/ Curt Landin