TTE 2016: Tour operators that ignore disruption face ‘existential threat’

If traditional tour operators continue to depend on being a “trusted brand” to deter disruption they may cease to exist within the coming years.

If traditional tour operators continue to depend on being a “trusted brand” to deter disruption they may cease to exist within the coming years.

That was the message of former chief digital officer for Thomas Cook Group, Marco Ryan, speaking at Travel Technology Europe 2016.

Ryan, who only officially left his role with Thomas Cook in January, agreed some operators are further along the path than others when it comes to adopting new technology.

“But digital is not a team or a process,” he said. “It’s a mindset.

“You can’t just paint over the analogue problems with digital paint.”

He said while many travel firms in the UK have “fantastic heritage”, it is not enough to rely on that.

“I believe many tour operators are going to face big challenges over the next three to five years,” he said.

“They are going to have to partner and open themselves up in ways they are currently not set up to do.

“That will come because there will be economic pressure on their business models because they haven’t adapted enough.

“Disruption is going to eat away at their margin. But it’s going to be reactive rather than them really understanding the ecosystem.”

The “historical weaknesses” of tour operators listed by Ryan included legacy systems, poor data management, a product focus, non-digital leadership at the top of the company, denial about disruption and a belief that historical strengths are enough to deter it.

Ryan believes traditional tour operators can survive but made recommendations including bringing in digital talent at all levels, investing in and auditing data, looking for disruptive partnerships and “challenging the product/yield mind-set”.

Ryan focused on the concept of “design thinking”.

“Lead with customer experience and needs,” he said.

“Products should be simpler and more relevant to the customer.”