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The LET industry in Europe is benefiting from the favourable economic situation of most of the key tourist-generation markets, where levels of GDP and disposable income continue to be stable, if not slightly on the increase.
Together with the macroeconomic environment, other more specific factors tend to positively affect the LET industry today. For example:
- Tourism activities continue to play a major role in the global economy, with European countries such as France, Spain, Italy and the UK among the world's top tourism destinations both in terms of international tourist arrivals and revenue.
- Increasing support is being given by national governments in Europe through enhanced investments in infrastructure and promotion activities, liberalisation of border procedures, growing interregional cooperation and increased public/private partnerships.
Expanding demand driven by the changing demographic characteristics in Europe is allowing an increasing proportion of elderly people (and, indeed, people with disabilities) to access a new range of leisure, entertainment and tourism services.
- New consumer behaviour is steadily gaining ground with strong increases in short trip destinations that offer good value for money (such as the new EU countries in Central and Eastern Europe) and a renewed importance of sustainable tourism, which takes into consideration corporate and social responsibilities.
3. Major Challenges Affecting the LET Industry: Demographic Changes, Internet Diffusion and the Emergence of a New Business Model
The above picture is not without potential challenges. Apart from a series of well-known external threats (political instability, terrorist attacks, high oil prices, rising interest rates, currency fluctuations, health scares, etc.), the industry is faced with additional disruptive pressures, such as:
- Changes in demography and new consumer behaviour pushing customer preferences towards the concept of low cost.
- Widespread IT literacy, with expanding Internet adoption, is increasingly accustoming consumers to self-service and "DIY". This causes downward pressure on prices and allows consumers to bypass tour operators, with considerable reduction of channel and distribution costs.
- The need to ensure high ROI, increase sales productivity and obtain better sales margins, while continuing to reduce costs, after years of heavy marketing investment.
On the whole, these trends are rapidly changing the LET landscape in Europe and are forcing LET companies to devise new and rapidly evolving business models in a context increasingly characterised by fierce competition and the quest for cost-effectiveness. Online booking, billing and ticketing address these challenges by taking cost out of LET companies' back-office operations and expanding their customer reach. However, they also level the playing field and increase the range of competition for those customers. The following section looks at the role that ICT can play in developing an effective operation.
4. The ICT Perspective: eBooking, eBilling and eTicketing as Enablers of New Business Models in the LET Industry
As independent leisure travel and other activities are becoming ever simpler to organise, holidaymakers and other consumers are increasingly reliant on the Internet, not only for retrieving relevant travel information, but also for booking, paying for and obtaining tickets online directly at home (including the self-printing of boarding passes). The LET industry needs to rapidly adapt to this new ICT perspective, not least because an increasing number of airlines, railways, bus companies and other providers of transport, leisure and accommodation services are now seeking to minimise their distribution costs by selling almost exclusively via the Internet.
New Business Models and Product-Service Innovations as Leading Business Initiatives in the LET Space
Not surprisingly, when asked about the leading business initiatives over the next 12 months, LET companies stress the importance of improvements in their IT organisation's responsiveness and efficiency (Figure 1). These improvements are seen as the necessary basis to promote good customer care and customer services, develop new business models and achieve product/service innovations. In the near future, ebooking and eticketing will be instrumental in supporting the most significant business initiatives in the LET industry.
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