The Rise of Evolutionary Partnerships in the Sharing Economy

The impact of the sharing economy continues to dominate business headlines and tourism/meetings industry conference conversations. The one constant element in both channels is that for the most part users are delighted with sharing economy options while legacy economy stakeholders are struggling to evolve their roles.

Let’s be clear: the sharing economy is not going anywhere. While it’s easy to say it’s just another example of how technology is changing our lives, the real driver of the sharing economy is a grass-roots shift in consumer trust from established corporate enterprises to self-forming peer networks. It’s as much of a social evolution as it is a technology one.

The good news is that after the initial shock and awe of disruption by the likes of VRBO, airbnb and Uber, forward-thinking brands are replacing fear and contempt with partnerships that are truly WIN-WIN. Check out these three examples – all of which have happened in the last 90 days alone:

Tim Mag

I recently had the privilege of speaking at the Elite Meeting Alliance in San Antonio where the topic of the sharing economy came-up in multiple conversations with meeting professional attendees. It was apparent that while the vast majority of attendees had used shared economy platforms in their personal lives, fewer than 10% (based on a show of hands in a room of meeting professionals) had ever used them professionally. They did feel however that it was inevitable for meetings (both airbnb and Uber already have specific business travel arms) but that elements such as risk management, service consistency and room-block contracting needed to be dealt with.

I see opportunity knocking for DMOs. Right here. Right now.

The big knock trotted out by some is that “shared economy participants don’t understand our business or our attendees”. I’m sure its true. But what if they did? What if local airbnb hosts were formally trained by the local DMO on meeting planner/attendee service expectations and had access to briefings/advisories on group business opportunities that they could participate in and earn more revenue?

By navigating the shared economy maze to the intersection of the visitor experience and host/supplier DMOs can play a powerful leadership role in bringing the sharing economy into the existing tourism and meetings industry ecosystem. The result could very likely be:

  • Improved visitor experiences that elevate the destination brand and increase local sharing economy revenues.
  • Commitment to pay local taxes and comply with regulations (e.g. insurance and safety).
  • Greater community engagement with the local tourism and meeting/convention industry.

Some might say this is heresy. Some might say it’s the natural order of competition. Others see it as a way to create new value from a social evolution.

And some smart DMOs are probably already creating plans to make it happen.

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Destination Marketing 3.0: What Problem Should Destination Marketers Be Trying to Fix? – Part Two

Last weekend as I watched the Dallas Cowboys exhibit a frightening lack of courage to act (unlike Johnny Football) at the moment of truth, I came across a June 2012 article in Fast Company called 7 Ways to Disrupt Your Industry. Two of the seven suggested disruption strategies soundly resonated with me as crucial parameters for the Destination Marketing 3.0 opportunity:

  • Eliminate your industry’s persistent customer pain points; and
  • Dramatically reduce complexity.

Ding. Ding. Ding.

PROBLEM: Sales and distribution channels are overly complex and expensive. Lets face it, the business of travel and events is over-engineered when it comes to the GSD (Get Shit Done) imperative. Sales channels are complex with multiple intermediaries, lack of pricing transparency, hidden commissions and fees. Distribution often involves an armada of diverse businesses and stakeholders, each with their own objectives, that must be gently herded and precisely aligned without exposure to the customer.

Sure, it is what it is but why are we surprised? The whole ecosystem was designed by suppliers to make suppliers’ lives better, not the customer’s.

Together these are significant customer pain-points, creating undue stress and additional costs for all – a perfect industry landscape for disruption – that someone with the courage to act in the best interests of the customer has to come to grips with.

SOLUTION: Less selling, more connecting: Customers now want direct transparent connections to marketplace options in order to GSD.

On the immediate stop-doing list for destination marketers is getting out of the business of directly selling travel experiences, products, rooms etc. Eliminate complexity and clutter! Customers today have unrestricted access to effective and trusted sales transaction marketplace platforms (e.g. Citypass, Uber, OpenTable etc) that do it better and less expensively than a destination marketer.

While some destination marketers already use Online Travel Agent (OTA) booking engines on their websites to sell rooms, its time to go further.

The Destination Marketing 3.0 value opportunity is for destination marketers to develop new direct sales and distribution partnerships with these transaction marketplace platforms and connect THEM directly to the destination’s customers. This reduces channel complexity and cost and gives customers direct transparent connections to do business with the destination.

For example: Event professionals are always looking for unique venues for their attendees in the host destination. It is typically a time-consuming, high-risk proposition requiring a trusted local intermediary (DMO or DMC) to get it done. Not any more. In the meeting and event space, businesses like FROOMZ (a company I currently advise) have developed hyper-local direct connection marketplaces for specialized venues that planners can now search and directly connect to according to their specs and business objectives. There are also similar hyper-local marketplaces for catering (CaterBid) and short-term meeting space (Liquidspace).

With the profile of the travel and events industry growing in destinations everywhere, start-up businesses are coming on-line regularly to serve visitors and event professionals in their communities. Community hackathons like these in Tampa and San Francisco are incubators for new tourism and event services. I would LOVE to see a destination marketing organization sponsor a hackathon specifically for the travel and events business in their community. Destination marketers would do well to develop a portfolio of trusted hyper-local partnerships with these marketplace and service developers instead of competing with them to better serve their customers.

A huge opportunity for Destination Marketing 3.0 is to eliminate customer pain by reducing the complexity inherent in the business of travel and events. Getting out of the sales and distribution channels by supporting the development of direct customer connection marketplaces is one way to do just that.

Doing it will allow all of us to GSD.