Why effective tourism market research leads to strategic planning

A guest blog by Databricks

When it comes to growing your tourism and travel business, you need a clear and comprehensive strategic plan.

After all, we can’t afford to make things up as we go along. We’re responsible for hundreds of tourists. Fortunately, there’s one easy route to better strategic planning: improving your tourism market research.

With more knowledge about your customers, such as consumer behaviour, preferences, and industry trends, your decisions will be driven by evidence and data.

Being able to implement effective tourism market research leads to better outcomes for your customers. You’ll only be able to give them what they’re looking for if you actually know what that is.

In this guide to tourism market research, we’ll explore the meaning of market research in the tourism and travel industry and examine its benefits. Keep reading to learn more.

What is tourism market research?

The travel industry is a fast-changing world. And there are always new trends, such as using types of generative AI or automated bookings to stay on top of. However, we shouldn’t lose sight of the basics, especially when it comes to knowing our customers.

Tourism market research is the process of understanding customers’ aims and preferences. This allows us to fine-tune our offerings so that everyone gets the best possible experience.

For instance, implementing a restaurant reservation system can provide valuable data on dining preferences and peak times, which helps tailor marketing efforts and enhances customer satisfaction.

How your tourism market research takes shape will differ between companies and according to your specific aims. There are two approaches you might take:

• Quantitative: Data is your best friend here. You’ll conduct an in-depth analysis of data like spending habits to produce a market research report that determines customer attitudes.
• Qualitative: This approach focuses more on your customers’ preferences and motivations. It includes producing customer surveys and examining the results to shape your research.

Who organises your market research will also depend on the route you take. You could complete the research in-house, but some organisations use an external market research company to do it for them.

Ultimately, market research is any research conducted with your target audience. Although it incorporates a range of different possibilities, it will allow you to better understand the travel decisions that your customers (and potential customers) make every day.

7 benefits of tourism market research for strategic planning

Now that we know a little more about the meaning of market research in the travel industry, it’s time to think about why it’s so important.

For starters, it allows for more strategic financial planning. Diligent tourism market research arms you with the knowledge to efficiently allocate financial resources to maximise returns and minimise risks.

By researching your customers, tour packages, and markets, you ensure every decision you make is informed and calculated.

Let’s dive deeper into how market research leads to strategic planning:

1. Know your competition

As good as your travel offering might be, remember that you’re up against dozens of competitors. You want a strategy that drives customers to your company rather than your competitors. So, you’ll need to know what those competitors are doing if you’re to improve on it.

Start by looking at organisations that provide similar tourism packages and share a target market with you.

Your market research should examine the competition’s marketing, products, and pricing. Consider complementing this with online surveys that allow you to see how customers experience these three aspects.

An example of competitor research might include looking at the use of keywords in their marketing materials. Utilising SEO tools is also helpful as you can analyse and implement the best-performing keywords effectively, making sure your content ranks higher on search engines.

Take time to understand your direct competitors’ pricing structures, too. If you’re offering a package in South Africa for double the price of a similar package offered by a competitor, you could be losing business. Competitor market helps shape your pricing strategy in line with your USP, whether that’s offering value for money or an exclusive high-end experience.

2. Step into your customers’ shoes

Success in the travel industry depends entirely on being able to please your customers. So a key part of your strategic planning should be about developing a detailed, comprehensive, and accurate understanding of their priorities and motivations.

One way to learn more about your customers through market research is to use quantitative data. We have never had access to so much customer information, especially for digital-only travel companies. We use data like customer spending patterns to learn about our customers’ choices in ways we never could before.

You can use tools such as a Hadoop distributed file system to store customer data. This way, your team can easily access and analyse big data sets.

Being able to quickly utilise customer data is essential for producing valuable insights that are both accurate and responsive to the most recent developments in the industry.

As we mentioned earlier, you can also use qualitative research to learn more about your target audience. Do this by conducting interviews with customers, asking them about their travel aims and priorities when spending money with a tourism company.

Remember, one customer doesn’t represent the entire market. A well-chosen range of interviewees gives you a stronger understanding of the different perspectives that all of your customers have regarding travel. This will let you better plan your strategy around the needs of your target audience.

3. Get ahead of new trends

When you’re in the process of strategic planning, conduct market research so that you’re fully aware of the trends that will dominate the tourism and travel industry over the next year.

Trend analysis can take a range of different forms. Historical data indicates what countries have traditionally been popular with your target customers at certain points of the year. These historical trends will let you adapt your promotions so that you push campaigns that have been popular in similar conditions.

Take time to stay abreast of new digital marketing platforms, too. For instance, learning how to showcase your offerings on TikTok can allow you to reach a younger, tech-savvy group of jetsetters more effectively.

You might also use marketing research to identify consumer trends. This will utilise a wide range of customer data to find underlying changes in consumer behaviour and purchasing patterns. If the data seems to point in a certain direction, adapt your strategy to make your organisation prepared for this future trend.

In the tourism industry, awareness of wider trends is also important. With market trends growing around the concept of social responsibility, you need to identify the importance of this for your customers. This will enable you to produce sustainable travel experiences as part of your strategic planning.

4. Refine your marketing

When producing marketing campaigns, we should think of each campaign as a conversation between our company and the customers. We must consider how customers perceive our brand and what messaging has a positive impact on them.

Market research can be a great way to find this out. As well as looking for direct feedback on your marketing approach, such as by incorporating surveys into your operations, you can use customer data such as conversion rates to see what aspects of your marketing strategy are most effective.

You should also delve deep into the use of marketing across the travel market as a whole. See what forms of marketing resonate the most with customers travelling with a competitor, and see if you can learn anything. This should shape your strategic planning around promotions and advertising.

This should all ensure that your marketing materials are of a higher quality than they were previously: marketers using a brochure maker, for instance, will be able to turn your insights into actions by redesigning digital leaflets that respond to your customers’ preferences.

5. Evaluate your product development

Ultimately, we all want our customers to have the best travel experience we can possibly provide. Market research ensures that we are constantly developing the best services or tourism products.

You can see how specific services are performing by comparing them with similar services from across the market and to the other services that your company offers. You can evaluate underperforming services—whether that’s in traveller numbers or customer reviews—so that you know what to improve.

This should become a central part of your strategic planning. When you’re considering alternative destinations or marketing pivots, such as prioritising business travel, use the in-depth analysis provided by market research to make sure that your strategy is supported by the facts.

This in-depth analysis not only supports strategic decisions but also enriches business proposals, ensuring they are well-aligned with market demands and customer preferences.

We can also use market research to extract the positive elements of our businesses, allowing our teams to reproduce successes elsewhere. If a focus group tells you that your tour partnerships in North America are effective, you might want to expand these partnerships or see if you can set up similar operations in different destinations.

6. Improve your risk management

Every business wants to reduce and manage risk, but this is especially important for businesses in the tourism industry. With the costs of running travel services so high, risk management needs to be as effective as possible.

Utilising contract management software ensures that terms with vendors, partners, and other stakeholders are managed effectively, reducing the risk of contract disputes and enhancing compliance. This means that your strategic planning must be fully aware of market dynamics.

By conducting in-depth market research, you will know some of the key risks that similar businesses are exposed to across the world. This will allow you to spend enough money on services such as insurance to keep your business as safe as possible.

You will also be able to minimise the risks associated with launching a new product or service if you have a strong market research process that is built into your strategic planning stage.

This is because you can be more confident that customers will respond well to your offerings if their perspectives and priorities have been fully considered when you’re planning the way forward for your company. Managing risk through market research should be a core part of your strategic planning.

7. Enhance personalisation

Personalisation is everything these days, particularly in the tourism sector. From developing personalised marketing messages to offering bespoke travel services to implementing a chatbot on your website to swiftly direct people to the right tailored solution, market research helps fine-tune your strategy.

This all starts with customer data, which can be generated from a range of different sources. For instance, your telecommunications platform can be used to seamlessly send data such as call logs to your centralised data management tool.

All of this data should then be stored on a secure cloud platform that is accessible to everyone who works in a role that relates to customer experience. You should break down this research to identify what aspects of your business resonate with certain demographics.

This can include finding out what travel decisions are consistently made by younger age groups, such as the 18-24 age group, to improve your resonance with younger travellers. By having this demographic information, you can send marketing messages to targeted customers with these characteristics.

In addition, you can use personalization to improve customer retention. Compare their details with similar characteristics derived from market research and provide recommendations for future services that are personalised to their preferences. This personalization should be built into your strategic planning for the future.

Tourism market research with Rezdy

It’s pretty clear that using tourism market research is a core part of successful strategic planning for any tourism business. But how can you seamlessly embed market research into your operations?

A great place to start is with Rezdy’s reporting tool; it gives you an in-depth and up-to-date view of your performance through an interactive dashboard with analytics and insights. This enables you to seamlessly integrate market research into your workflow.

For example, with Rezdy’s in-depth reporting tool, you’ll be able to access these insights at your fingertips:

Quick overview

Effortlessly compare your product performance to gain valuable insights into how they stack up against each other.

Actionable insights

Tap into actionable insights like identifying your best days for bookings and busiest tour days, enabling you to optimize your operations.

Compare time periods

Easily compare your product performance across different time periods—monthly, yearly, or daily.

Dive deeper

Uncover specific products, including its booking trends, fulfilment days, popular extras, and many more actionable insights over two time periods.

With this tool, you can start your journey towards using market research to boost your strategic planning. This will allow you to see all the benefits that we’ve highlighted in this article, including better trend monitoring and enhanced product development.

Market research: The foundations of effective strategic planning

There’s no point in beginning strategic planning if you don’t have the knowledge, data, and evidence to produce an effective plan. That’s why market research is so important, allowing you to assess customer satisfaction, the effectiveness of your travel destinations, and the popularity of your services.

As we’ve seen, tourism market research has a range of benefits, such as maintaining your edge over your competitors. This means that it should be a key tool in your approach to strategic planning. So, what are you waiting for? Start improving your strategic planning with market research today!

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