Conclusions of Stopover Finland benchmarking studies. Iceland and Singapore

Transcription

1 Conclusions of Stopover Finland benchmarking studies Iceland and Singapore

2 Executive summary Both the Singaporean and Icelandic stopovers are built around the domestic flagship carrier i.e. Singapore Airlines and Icelandair. The airlines have been the driving forces of the products as stopovers contribute to the national tourism industry and, thus, to their growth strategy. Tourism makes 10.9 % of the GDP in Singapore, 5.9 % in Iceland and below 3% in Finland. Stopover generates visitors and an annual revenue of 45 M to Iceland, and 11.4 million visitors and a M revenue to Singapore. In Finland there were about stopover visitors from China, Hong Kong, Japan and Korea in 2014 generating approximately M revenue. The georaphical location of Finland can be described as an island and is in a way similar to that of Iceland and Singapore. However, the role of our flag carrier is somewhat smaller and the ferry lines with their daily connections to neighboring countries differentiate our position. Furthermore, the state is a common denominator in Singapore. In Singapore, only 10 % of passengers connect to other flights, in Iceland and Finland about 30 %. Finland has much to learn from these countries, in particular how the local ecosystem works together and how the airline feeds business to local travel service providers. Finland has good potential to increase the tourist revenue from Asian stopover passsengers by the targeted 80 M FINTRA OY 2

3 The Stopover model comparison The focus group of a stopover concept is individual travelers. This customer segment is growing all over the world, while the share of organised package tours is shrinking. Experienced travelers have mobile applications and language skills to purchase travel services in pieces, when it fits and suits their style and self-esteem regardless of the place and time. Singapore stopover offering is designed for a city break. All activities are short, day activities in the city from 2 hours to one day (no packaging with the flight ticket), a pick up from the hotel is always included. A visitor can purchase these online from a marketplace on Singapore Airlines website using a shopping basket. Based on a tender Viator, a major tour operator, was selected to build the offering and operate the marketplace. The airline, airport and national tourist board are promoting the site. Local travel service providers don t pay for the promotion. Sia Holidays (Subsidiary of the airline) offers packages flight +hotel+free admissions. In Iceland the airline uses all its channels to promote the stopover. Icelandair Holidays (subsidiary of Icelandair) offers 1-day to 5-day packaged holidays (Wellness, Culture, Nature, Adventure). Most stopovers are sold with the flight ticket and accommodation only. Activities are purchased separately. Two private competing incoming agencies (DMC) dispaly their excursions on the site, but the client makes the transaction in the system of the respective DMC. The DMCs build the offering and carry the business risk. They pay Icelandair for promotion in Icelandair channels and a 10 % -15 % commission on sales. Hotels are an important sales channel FINTRA OY 3

4 Comparision of Stopover concept in Iceland and Singapore Stopover concept Iceland Singapore Key actors Icelandair Singapore Airlines Changi Airport Singapore Tourism Board (STB) Main marketing channel Search words Stopover Icelandair Activities Singaporeair Icelandair stopover Sinapore stopover holiday Visit Iceland Host of the marketplace Icelandair Singaporeair Operator of the marketplace Icelandair Viator, a tour operator (tender) Offering Icelandair Holidays & Viator Independent providers (DMC) Purchase & payment of activities Online Online Each item in the respective DMC's /Icelandair inventory & systems Shopping basket, Viator s invemtory & systems Whitelabel n.a. Changi airport web site yoursingapore.com (STB) Marketing - key player(s) Icelandair Airline, airport, tourism board - annual budget MUSD 15 M - local DMCs, travel companies Purchase media from airline Don't pay, role is to attract tourists Nr of visitors / year Country revenue 45 M M Profiling Nature experience Shopping, activities FINTRA OY 4

5 Helsinki airport vs. Changi and Keflavik Airport data & services Singapore 2014/15 Iceland 2014/15 Iceland 2008 Helsinki Vantaa 2015 Nr of passengers/year 11.7 million 3.9 million 2.2 million 16.2 million Of which transit passengers 1.1 million (10%) 1.2 million (30 %) , 14 % 31 % Main countries of origin Asia, Europe, USA US, UK, SCA, Central Europe Europe, Scandinavia, USA Fin, Swe, Rus, Japan Turnover (airport) 665 M 138 M 42 M Finavia 360 M Nr of operating airlines (regular customers) Nr of airport hotels Nr of travel agencies Distance to downtown (km) Transport methods & time Train (30 mins), Car (30 mins) Bus (45 mins) Car 35 min / Bus 45 min Car, Bus, 40 min Train 28 min, Bus 30 min Airside restaurants 24 5 na 6 Airside cafes Airside shops Airside wellness services 2 na* na Introduced during winter Tourist & stopover info airside 3 no no no Tourist & stopover info landside 3 3 Tourism promotion space 1 Nr of Stopover products for sale ? Available marketing material Plenty of brochures Online / Print by key DMCs Plenty of prochures At tourist info Aps for mobile services na no na various Stopover service providers Country population 5.2 million million FINTRA OY 5

6 Conclusions The flagship airline drives the stopover program for a long term. Its flight schedules, connections, pricing and capacity need to support the joint vision and create business opportunities for the local travel industry. The stopover has a clear, easily comminicated profile and a connection to the country / HUB Some airlines give you time, Icelandair gives you time Competition for stopover customers is increasing. Passengers are offered free services and new stopover destinations emerge Singapore: shopping voucher at the airport for transit customers, free city sightseeing, free admissions to sights, discount for hotel dinner Turkish airlines: free Touristanbul or a hotel night Emirates & Dubai: Shopping vouchers at the airport. In certain cases where an itinerary calls for a over 6h or 8h but less than 24 h stopover in Dubai, Emirates will provide complimentary accommodation, meals, ground transportation and visa costs. For longer stay deep discount accommodation and transfers are included. Korean Air & Czech Airlines: Prague, Slovenia & Austria FINTRA OY 6

7 Conclusions Travelers buy local stopover activities separarately in the destination. The activities of most interest are short, from a couple of hours to half-a day or full-day programs. The local offering is gathered together to an online marketplace that enables the visitor to buy the product (day excursions etc.). In addition, the airlines own a tour operator subsidiary that offers stopover flight + hotel + optional excursion packages at the time of booking the flight ticket. These two sales channels are separate. The marketplace operates on business terms so that it drives for efficiency, increases sales and commercial success of the participating local travel companies. Anyone meeting the minimum criteria gets the product displayed at the marketplace. Customer demand determines the attractiveness and viability of each product. Individual travelers are seldom a business alone. Many daily excursions for individual travelers are the same and offered by the same companies as for the large tourist groups (with must see sights it s easier to reach breakeven volume). Price per peson is fixed and the max amount of participants is often 8 (minivan pick up). The timing is designed to avoid the mass tourist peaks. Marketing of the joint stopover activity offering is systematic and present in all channels. In Singapore the airline, the airport and the tourist board finance each one third of the international marketing expenditure FINTRA OY 7

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