Tourism Development in Portugal: Business Opportunities for German Companies. Portuguese German Symposium
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1 Tourism Development in Portugal: Business Opportunities for German Companies Portuguese German Symposium Lisbon, 20 th October 2015
2 Roland Berger has an extensive track record of cooperating with leading tourism companies throughout the world ROLAND BERGER Founded in 1967 in Germany by Roland Berger Relevant selected clients 50 offices in 36 countries, with around 2,400 employees Nearly 220 RB Partners currently serving ~1,000 international clients 2
3 In Portugal we also have strongly contributed for tourism within all main market segments Selected Clients in Portugal Government Transport Companies Entertainment Tour Operators Grupo Espírito Santo Hospitality Investors Roland Berger has been highly involved in Tourism in Portugal Cooperation with Turismo de Portugal and Lisbon Tourism Association in the of Strategic Plans 3
4 Portuguese tourism sector is highly dynamic, with a strong recognition worldwide 2014 Porto 2014 Lisbon Madeira Algarve Source: Press; Roland Berger 4
5 Portugal's notoriety as a top destination market led to a strong Tourism growth Lisbon with the highest growth rate (14%) Tourism performance in Portugal [2014] Number of Tourists Number of Foreign Tourists Growth since 2013 Main source market PORTUGAL 16 M 9 M 12% United Kingdom Lisbon 5 M 3 M 14% North Region 3 M 1 M 10% Algarve 4 M 3 M 13% Source: Turismo de Portugal; Roland Berger 5
6 Germany has a significant relevance for Portugal as a source market and continues with a strong growth Main Tourism source markets in Portugal [2014] 17% 12% 16% 15% German Tourists growth Azores North Region 9% 11% 20% 7% Lisbon 11% 8% 12% 6% Number of tourists' growth since % Madeira Algarve 8% 4% 1) Within foreign tourists Source: Turismo de Portugal; Roland Berger 6
7 What is behind the success? - Portugal stands out with a set of differentiation factors supporting future Value for money Gastronomy > Well developed touristic offer with strong quality for relative low prices > Highly appreciated traditional cuisine Weather > Pleasant climate throughout the year > Opportunity to develop off season tourism Concentrated diversity > Wide spectrum of touristic products (e.g. culture, sun & beach, nature) > Different touristic attractions in a small range 7
8 Tourism fueled a strong growth on touristic offers and its contribution to overall economy Tourism offer Tourism Revenues in Portugal (Accommodation) 7 '000 M +25% 9 '000 M Portuguese Tourism Revenues Market Share in Europe 2,3% + 0,2 p.p. 2,5% Tourism Exports Weight on Portuguese total exports 14% 4% Growth since 2007 Source: Turismo de Portugal; Roland Berger 8
9 The "tourist journey" translates tourists' selection/acquisition process into 5 phases "Tourist Journey" how the Tourist acts along its selection / acquisition process 1 Dreaming 5 Sharing > Begins when the interest in travelling to a given destination is triggered 2 Planning > The experience is than shared within a personal network, feeding the interest of other tourists > Planning begins when tourists start to look for and compare alternatives adjusted to their needs 4 Experiencing 3 Booking > Created expectations are realized in the travel experience > Once the best alternative is identified the booking(s) and respective payment(s) begin 9
10 Given the sector context it is possible to find business opportunities along the "tourist journey" in Portugal "Tourist Journey" type of business opportunities Dreaming Planning Booking Experiencing Sharing a Marketing initiatives b Touristic assets and products c Services to tourists d Services to tourism sector players 10
11 Dreaming, planning and booking phases present opportunities associated to the of marketing initiatives a Marketing initiatives examples of opportunities Main clients Destination Marketing Organizations Innovative touristic products Tourist knowledge software / tools Digital marketing initiatives focused on tourists Hotels / Airlines / Other transportation Tour Operators / Travel Agencies Digital content Key opportunities Public Relations initiatives Marketing initiatives focused on Tourism Operators 11
12 Destination Management Organizations in Portugal have been increasing the focus on digital Marketing a Marketing initiatives increased investment digital Marketing Blogs and social media DMO site Digital marketing Opportunity to further sophisticate the online marketing approach Source: Turismo de Portugal; Roland Berger 12
13 The growth witnessed continues to require the of touristic infrastructures hotels, resorts, b Touristic assets and products examples of opportunities Main clients Tourists Traditional products related businesses Hotels Resorts Tour Operators / Travel Agencies Key opportunities Online Specialized Operators Entertainment establishments Wineries Restaurants 13
14 Portugal's touristic offer has been growing but still has room to grow b Touristic assets and product tourism assets Increasing offer Number of Rooms ['000 #] 10% Increasing profitability RevPar 1) [ ] 17% Increasing demand Occupancy Rate Growth ,4 p.p. 1) Revenues weighted by occupancy rate Source: Turismo de Portugal; Roland Berger 14
15 There is also the need to develop innovative solutions to enhance tourists' experience c Offer of services to tourists examples of opportunities Main clients Tourists Tour Operators / Travel Agencies Online Specialized Operators Innovative tour Arts and events Mobility services Key opportunities Experience sharing applications "Trip planning" and "real time agendas" services E-commerce platforms 15
16 In the mobility services for instance, Lisbon witnessed a very successful introduction of the Tuk Tuk concept in 2012 c Offer of services to tourists Example of Tuk Tuks in Lisbon Number of Tuk Tuks in Lisbon? > Companies Tuk Tuk Lisboa 12 Companies? Fuel Fossil Fuel Fossil Fuel & Electric 100% Electric Source: Press; Roland Berger 16
17 Furthermore, there are several opportunities to develop tourist experience enhancing initiatives c Offer of services to tourists Example of innovative tours Concept > Improve the tourist experience in Lisbon allowing for an interactive experience with monuments Augmented reality Tours with audio-visual information Example Augmented reality > Using the smartphone / tablet camera to identify key attractions in the surroundings > Each key attraction has complementary information, as: History Architectural style Videos > Different languages audio-guides that can be listened to through the smartphone / tablet 17
18 As other examples of tourist experience enhancing initiatives can be considered the of real time agendas c Offer of services to tourists Example of real time agenda Concept > Agenda that allows user feeds, in order to guarantee real time updating > Personalized agenda according to user preferences and location > Possibility to share through social networks to reinforce engagement > Availability of a "best kept secrets" concept sharing of locals favorite spots 18
19 Tourism players will need business partners to help them reinforce their positioning d Offer of services to tourism players examples of opportunities Main clients Hotels / Restaurants / Others Content Specific software Web apps design Tour Operators / Travel Agencies Online Specialized Operators General services (accounting; HR temporary provision; laundry; cleaning) Key opportunities Interior design services Equipment supply 19
20 All in all, tourism will keep opening several opportunities for cooperation Investment > Greenfield or brownfield initiatives > Testing platform for other markets Partnership Type of business opportunities Service provision > Local players to boost German demand > Innovative solutions > Products lacking supply > German players to promote Portugal 20
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