WHAT ARE THE SUCCESS FACTORS OF ALPINE DESTINATIONS? Trentino tourist performance. Strengths and weaknesses of Trentino as a tourist location www.bakbasel.com Gianfranco Betta Osservatorio provinciale turismo - Provincia Autonoma di Trento id999
The demand side The competitive advantage of Trentino as a tourist location is still strong due to: notoriety, the trademark, image, particularly among Italian tourists the geographical location the reputation among Italian tourists of Trentino as a mountain location
The demand side But: the international dimensions of tourism is rather poor, in terms of customers (although an increasing number of tourists come from Eastern Europe, particularly during the winter) and the propensity of entrepreneurs to provide services outside the domestic market In a tricky situation for the national and international economy, greater market differentiation is required in order to diversify risks foreigners represent 34% of tourists (20% if private houses and second homes are included) only 2% of hotel owners manage facilities outside Trentino (6% of hotels are owned by foreigners)
The demand side On a positive note: Trentino Alto Adige (as a Region) has had an increasingly positive balance of payments over recent years. 2004 was the year of the biggest increase of added value from foreign tourist consumption of any Region, representing about 8% of the total expenditure of international tourists in Italy (source CISET based on data from the Italian Exchange Bureau) Trentino means Italian mountains and hence tourists are loyal
The demand side Also positive: customers are mainly DIY i.e. they arrange their holidays without travel agents or tour operators (although the situation is very varied) fewer than 10% of tourists arrange their holidays through a travel agent or tour operator according to 68% of hotel owners interviewed during the summer and 63% during the winter. Countries with over 50% of tourists who arrange their holidays through a travel agent or tour operator are few and far between - 10% in winter, 8% in summer customers are looking for an active but not intensely active holiday, particularly during summer
The demand side However: the high rate of loyalty penalizes innovation and research to sum up the demand side: hotels in Trentino are used to working with loyal customers, albeit less loyal than in the past, mainly DIY, although travel agents and tour operators are beginning to increase their share
The supply side: products a huge potential for the tourist industry; a variety of natural resources, rich in terms of (bio)diversity within all tourist locations the existence of various tourist products ( products not as potential but real, usable tourist resources) a variety of supplies throughout the province, with great diversification for different segments of demand
The supply side: products But: the product life cycle is in the mature stage potential resources have rarely been properly exploited (either not at all or too intensely) there are plenty of examples of over-exploitation creating a negative image many tourist resorts in Trentino lack commercial strength
The supply side: products In addition: the local population has little knowledge of the tourist industry the level of service is not homogeneous the risk is to want to do everything, particularly where the resources are abundant
Hospitality in Trentino there are many opportunities to stay in places other than hotels (second homes, which have become increasingly popular over the last ten years), reducing the entrepreneurship these alternatives are not as popular as in the pre-alpine areas of Lombardy and Veneto; entrepreneurship is mainly through hotel ownership and management improvement in hotel quality in absolute terms (the ratio of 3 / 4-star hotels to 1 / 2-stars has gone from 1.08 to 3.53 since 1990; today beds in 3 / 4-star hotels are 77.9% of the total for hotels)
Hospitality But the occupation rate for beds is low few foreign guests still too few hotels peak periods long periods of low or zero consumption
Hotel entrepreneurship hotel entrepreneurship rooted to the region and qualified 37% of entrepreneurs have a High School diploma, 30% have a professional training certificate; 26% left school at the school-leaving age majority of hotel children 67% took over a family business; in about 9 cases out of 10, the hotel has been passed down through a number of generations 85,4% of entrepreneurs own the hotel; 94% are resident in the province
Hotel entrepreneurship sufficiently attentive to ICT Although: 20% of hotels do not have a PC hotel rooms are mainly sold by other channels fax and telephone are considered far more important than internet
Hotel entrepreneurship two main entrepreneurial groups, with two different speeds (including in investments) slightly more than half of hotel owners (51.9%) have invested over the past ten years, the remainder (48.1%) having invested nothing entrepreneurs act alone, do not create networks or systems in the past two years, 74% of hotel owners have taken some action to seek new customers; but almost always alone, except for taking part in Trade Fairs and workshops or appearing in catalogues
Hotel entrepreneurship 47% say their business is based on satisfying certain segments of customers But: only a minority (12%) have taken action with this segment in mind (above all sportsmen and women, families, the young, the elderly) only 9.9% of hotels contacted are members of a product club
Hotel entrepreneurship despite the lack of networking and co-operation between entrepreneurs, with insufficiently virtuous behaviour at the company level, and the lack of market knowledge, many are trying to work together the large majority of respondents to the Monitur survey (about 600 individuals contacted from time to time on-line) say that integration between companies (even in different sectors), and between the public and private sectors is the strategic question for the effective promotion of the territory the opportunity to co-ordinate is considered indispensable or at least useful by two thirds of those interviewed respondents considered priority action improving integration between tourism and other sectors.
Hotel entrepreneurship Hotel hospitality (and entrepreneurship) suffers from certain factors: lack of defined professional roles, such as tourist technicians (intermediate phase) and highly qualified personnel at lower levels, including graduates, who find it hard to achieve the right profile family businesses with family members doing just about everything and anything high turn-over of personnel and little use of local labour
Hotel entrepreneurship Hotel hospitality (and entrepreneurship) suffers from certain factors: 22% of hotel managers say their main difficulty is to find qualified staff job descriptions are vague and overlapping, with family members acting as factotum, from cooking to doing routine maintenance and guaranteeing overall functioning the relationship between staff and family members is 3 to 1, throughout the year. Hotels are small family businesses with a staff or 9.4 on average (7.1 employees and 2.3 family members)
Hotel entrepreneurship Hotel hospitality (and entrepreneurship) suffers from certain factors: the business is carried out using two essentially equivalent methods: either basically family members (45.8%) or basically employees (44.2%) family members provide continuity, 93% remaining from one year to the next 40% of staff (three times more numerous than family members) changes each year (a complete change of personnel in less than three years, although some do remain) only 41% of employees come from Trentino, 36% from elsewhere and 22% from abroad
Hotel entrepreneurship Hotel hospitality (and entrepreneurship) suffers from certain factors: Difficulty in the transition from one generation to the next 85 entrepreneurs (about 7% o the total) say their main problem is the transition to the next generation about 10% of interviewees intends in the short-term (next 3-5 years) to give up management directly or through the family (sale, professional management, closure)
Hotel entrepreneurship a product-oriented mentality prevails, with little attention paid to demand price cutting is the chief way of looking for new customers or creating loyalty among existing customers quantity versus quality; this is an ongoing debate involving: target customers operating margins and the risk of selling below cost, by going through agents and so on where and how to promote (mainly in Europe, Eastern Europe or even the Far East?)
Organization special autonomy and the level of resources available; the acknowledged quality of life and quality of the territory; existing services at the disposal of residents and tourists (healthcare, transport, culture...); guaranteed safety standards for tourists (First Aid, civil protection...) and more generally the value of the safety the territory and Trentino society is able to provide constant attention to policy decisions promotions to integrate identities, image, the perception of the resort (an image coherent with its identity)
Organization But: some lack of success at the planning stage (e.g. in town planning, failure to stop second homes being built or to limit traffic at peak periods in the summer and winter) production of high quality promotional materials not always backed up by coherent tourism products (failure to answer the two basic questions: what are the distinctive products of the resort and for which segments? ; which actors should be involved, what interactions can be created between them, what are the proper management strategies? )
Organization creation of a new provincial tourist organization under private law (Trentino Spa) in order to create an agile, flexible structure 15 new privatized Tourist Promotion Agencies to integrate other promotional activities and tourist information, with brokerage of the tourist product and focus on the tourist area But: new Tourist Promotion Agencies have a hard time changing spots ; activities are unchanged, there is little product-orientation; they promote and provide information
Organization a territorial marketing approach. Alongside the new organizational structure, growing integration between the territory and products, the transition from tourist marketing to territorial marketing. The territory no longer considered merely as a context (= countryside) but as the object of promotions. But: individual producers have little knowledge of tourist products beyond their specific performance the concept of product is still linked to local resources and supplies, whereas tourist buy a holiday not transport, board and lodging, services (seat, site, service): this is the fallacy of composition, common among territorial administrators and managers THANK YOU FOR YOUR KIND ATTENTION