Hello, I’m Gary Bowerman, and welcome to the first High Yield Tourism podcast. But what is High Yield Tourism? I’ll be discussing this critical question for the future of tourism and much more with my co-host, Jens Treinhardt.

Hello, and thanks for listening in. Today, I’m joined by Jens Thraenhart, the founding partner of Chameleon Strategies and former CEO of the Barbados Tourism Marketing Inc. We’re going to discuss the concept of high-yield tourism, why now and why it matters. So before we start, full disclosure, Jens and I have been working together to develop a new tourism strategy planning concept called high-yield tourism, but much more about that later. So what’s the context for why we’re talking about this right now? In the rush to recover from the pandemic, many destinations and tourism segments, including hospitality, aviation, and transportation, have pursued the matching of pre-COVID numbers and revenues. While economic revenues and growth are essential, a focus on quantity over quality reprises some of the negative impacts of tourism that we saw in the years leading up to COVID-19. Since 2022, many travel businesses have witnessed a surge in demand, often exceeding pre-pandemic levels. This rebound has been championed by governments to demonstrate economic progress and recovery. However, a backlash is developing and public sentiment and media agendas against mass tourism are hardening, especially in popular global locations. So firstly, Yens, thanks so much for joining me on the podcast. Tell us a little bit more about this high-yield tourism concept. We’re positing it as an economically advantageous model for destinations and travel organizations to rebalance visitor economy growth. But that’s a big statement. Tell us a little bit more about our thinking. thank Well, you, And it’s Gary. great to Tell us be. a little bit more about our thinking.

Well, thank you, Gary. And it’s great to be on this first episode of the High Yield Tourism podcast. So it’s, I think, really a great milestone to now unveil what we believe high yield tourism really is. I think many people, when they hear the word high yield tourism, I think many when they hear the people, word high-yield they think about tourism, luxury tourism. We obviously think that growth is important. We don’t want to stall the growth. I we’ve mean, just come out of COVID. Everyone did. And we’ve seen what happens when the pendulum swings to the extreme left where there is no tourism at We’ve all. also seen prior to COVID what happens when the pendulum swings to the extreme right and where we have overcrowding, residents pushing back, and we have issues on biodiversity degradation, etc., etc. So there is this bridge between mass tourism and luxury tourism. We don’t think that high-yield tourism will save the world, but it can be a tool for sustainability. But in essence, high-yield travelers generate substantial economic benefits through the spending by the individuals, by maybe staying longer, not necessarily staying in luxury properties, but being affluent travelers in itself, being able to spend money in the destination, then also appreciate the culture and the heritage of the destination. Or if they’re staying at a design or boutique hotel, appreciate the essence of that property. So what we’re talking about when we look at high-yield travelers are really these are people that want to travel to immerse themselves in that experience. If it is a destination, connect with the local communities. They may stay at a luxury property, but then also eat at local restaurants. They don’t necessarily shop at the Louis Vuitton shops to buy a high-end scarf there, but maybe look for that high-end scarf made by the local village or artisans. So in the end, it’s really that bridge between mass travelers and luxury travelers.

Yeah, that’s an interesting perspective. So I guess really one of the starting points for our theory here, Jens, was that really in travel and tourism, particularly in the post-COVID recovery phase, destinations around the world have really focused on marketing, trying to attract back more tourists, bring back the numbers that they had pre-COVID, therefore encourage extra spending. Now, one of the things we know that’s happened since the pandemic is that inflation has meant that the cost of travel is more expensive. So people are spending more in destinations regardless of the numbers. But there’s been this focus on marketing. And what we’re really saying is that travel actually is a business. It’s not just about the front end attraction of people to your destination. It is about how you then leverage, as any business would, consumers when they come to your destination, make the opportunities for them to spend and to appreciate a destination, its culture, its cuisines, those kinds of things, but not just from a marketing perspective. So there’s a lot of product innovation that’s required. There’s a lot of connectivity between main destinations, primary destinations, and secondary and tertiary destinations, making those connections a lot better. Because we’re not going to save the world, but you can actually look at ways that you can actually improve the benefits of tourism for communities across the country. Is that fair to say?

Yes, absolutely, Gary. I think, you know, to step back, we want to look at the success metrics in a different way, right? So right now, a lot of the destinations all over the world, they look at visitor numbers and they compare these visitor numbers to pre-COVID levels, which is in a way comparing apples to oranges. But we don’t even think looking at visitor numbers is the right KPI. So we’re looking at spend, you know, how much money is being spent in the destination. But then on top of that, how much of that spent is actually staying in the destination to reduce what we call the leakage factor. The leakage factor basically means that the money leaking out is not staying in the destination, not creating economic benefits for local communities. It’s only benefiting a few, but not really all. And when we look at that, in the end, what we’re trying to achieve with this high-yield tourism concept is to make more money for the destinations and its stakeholders of the visitor economy. So we’re not even talking about only the hotels and its stakeholders of the visitor economy. So we’re not even talking about only the hotels and tour operators, the attractions. We’re talking anybody that is connected to the visitor economy. And so when we look at that, we need to take into consideration various pieces. One is the travel preferences. So for us, high-yield travelers see quality and value, enjoying these personalized experiences that not necessarily have to include luxury, but also really look at niche markets from adventure to cultural tourism, but also micro niches like birdwatching. So it’s all about what we call passion travel. Then obviously there is the considerations around sustainabilities. Lower numbers combined with higher spending can lead to obviously a sustainable model of tourism that contributes more to the economy while putting also less strain on the resources and the infrastructure. Otherwise, tourism also can be a If we only have a lot of people visiting a destination, cost. but money doesn’t stay in the destination, then actually we have a negative impact of tourism.

Then we have the whole management of We need more sophisticated tourism. and complex marketing strategies to actually target these high-yield travelers. Getting mass travelers is a lot easier. And also luxury travelers is a lot more straightforward. But when we look at targeting high-yield it travelers, is a lot more complex. And ensures also to develop products and services that match with their spending habits and their desires. And lastly, when we look at marketing strategies, we need to look at also personalized marketing that highlight these unique experiences and have that quality of service and these customized options.

You referenced a couple of things that I thought were pretty interesting, Jens. And I think in the current context, the current global context, I think it’s fair to say that we’ve shifted from, what, two years, particularly here in Asia. We had two or three years where there was such a dearth of tourism that the media agenda was we need to bring back tourism. know communities are suffering companies are suffering economies are suffering because there is a dearth of tourism it is so vital to some economies that has shifted now because we’ve gone back to pretty much the pre-pandemic agenda of over tourism and we’re seeing more and more articles and we’re also seeing forward thinking destinations around the world are trying to tackle this now they, they tackle it in different ways, and it’s a very, very complex problem to solve. We’re not even going to really try and do that. And high-yield tourism isn’t really a panacea for curing over-tourism. There are a whole bunch, a whole raft of things that need to be implemented to even get anywhere near tackling that. We will discuss that in future podcasts. But do you think, Jens, going back to the root causes of over-tourism, that we’re any closer to understanding how solutions could be developed?

Well, I want to point out that we’re not against mass tourism or luxury tourism. We’re not saying these are bad things. But I think if there is no balance, if tourism destinations are not managed accordingly to look at how do we make sure that the destinations and their assets are protected and how residents and all stakeholders are part of that equation, you know, then, you know, there is a problem. And that’s when we see these overcrowded destinations. I don’t actually believe in that word of over tourism, but, you know, it has been become a word. But I think what we’re talking about here is overcrowding of destinations because as a result that they haven’t managed correctly. But I think this focus on tourism yield and not just arrivals is important, you know. So in the end, you know, at the beginning after COVID, obviously, you know, you want to get people back to work. You want to make sure that people are making money again, especially after COVID, where, you know, a lot of businesses went out of business. So, you know, there was this kind of push for it. But then again, you know, when people get addicted to the numbers, you know, and that greed prevails, then it’s very hard to sometimes step back. And that’s, I think, the problem that we’re seeing right now, that, you know, once we have put the foot on the gas pedal, you know, it’s very hard to then step at mass tourism, not look at luxury tourism, but instead of building strategies that create that balanced tourism economy.

Yeah, I would agree with that. I think one of the interesting things that we’ve seen post-pandemic is you’re going to see huge demand for travel and for tourism from the economic south in emerging economies where middle classes are enlarging. That’s inevitable. That was happening before the pandemic. And the result of that is happening now. And that’s not just in Asia, that’s in Latin America, that’s in Africa, that’s different parts of the world. The demand for travel is going to be almost insatiable over the coming years. And so the challenges are huge. Moving away from over-tourism, Jens, I wanted to come back to a point that you made, which resonated with me. You said that somehow, and there are a lot of different concepts that are being talked about out there about how you can make tourism better. But in terms of high yield tourism, you discussed building a bridge between mass and luxury travel. Now, I would say that pretty much every destination, every airline, every hotel group, every tourism business, any business related in the visitor economy wants to somehow find that bridge because it’s the holy grail in many, many ways. But is it a case simply of better segmentation? Is it a case of looking more closely at high yield markets? Or is it just a much broader set of challenges than that?

Well, this is an interesting question because I believe that, you know, a traveler per se is not a mass tourist for life or a luxury tourist is not stuck in that luxury bubble per se. So I think the first thing that needs to be done is really look at how do we measure success differently? How do we look at driving different KPIs that really are there to push this inclusivity that all stakeholders within a destination benefit from tourism so that tourism is truly a force for good. I think if destinations only look at visitor arrivals, that can be detrimental. I think we understand that after the pandemic, people wanted to look at the growth and wanted to compare. So how fast do we grow? You know, how quickly can we get airlines back into destinations, et cetera, et cetera. But I think now we’re at a stage where we need to shift to just looking at visitor arrivals and looking at spend, especially spend, to reduce the leakage factor, to benefit all and not just a few. Now, the great thing about all of that is that COVID has done something remarkable, and that is reconnecting with their own destinations when people were locked in their own countries. And that also has driven that whole exploration of communities, you know, of local restaurants, of local, with local artisans, with local communities. And now, as people can travel internationally again, you know, that mindset has stuck. So I believe a luxury traveler, per se, can also become more a high-yield traveler where you say, yes, I stayed at a luxury hotel. I do like that luxury experience. I do like to shop at a high-yield mall and buy branded items. But yet I also visit a local community. I also eat at a local restaurant. I also buy from local artisans. So there is not a walled garden, if you so will, where a luxury traveler cannot shift over or mass tourists that might come with a tour operator and might stay at this big convention or all-inclusive hotel, yet can also go out and experience the local community. Having said that though, and going back to your point, there are markets, we believe, that are more predestined to their maturity that have already that what we call high-yield traveler. These could be markets like Singapore, for example, or Switzerland, or markets like that, that are mature travel markets and want to connect with local communities and want to explore the local culture.

Yeah, I think you made a really interesting point about what changed in travel and tourism, particularly here in Asia during the pandemic, because there were long border closures. So we saw this real change in terms of consumers wanting to explore more of their own country. We saw a great deal of product innovation by the tourism industry to capture and entice domestic travelers. There are some markets where that’s really, really prevalent. China is a very good example of that, where destinations have really become much stronger at marketing themselves than they did before. And also, I think, and now social media often gets a bad rap. And sometimes that is justified because you do see the collation of lots of tourists in primary tourism destinations and locations. A lot of that is driven by social media. But again, if we look at China, you look at some of the third and fourth tier destinations that have been able to reach out to younger people who can now travel and explore those destinations, particularly by high-speed rail. And right now in the May holiday, that’s really starting to manifest itself. You’re seeing a lot more young people traveling beyond the prime cities into third and fourth tier destinations. Short trips, yes, and the spending will have to actually see how those patterns actually pan out. But that is really a result of destinations beyond the main tiers utilizing social media more effectively to try and drive what I think we would say is high-yield tourism, Jens. I think the results of this are actually going to be shown. Now, in China, the number’s always huge. And you could say, well, that is over tourism in different places than it was before. But you can at least see that there is a dispersal of younger people wanting to explore differently. And I think where that becomes more interesting worldwide is this really informs the expectations and the ideas of young people when they travel overseas from what they’ve learned over the past three or four years from traveling in their own destinations. And that’s going to force a rethink of the way destinations promote themselves internationally to the Chinese market and other markets in Asia as well.

Absolutely right. And China obviously is an interesting example because many people just look at China as a mass tourism market. And we see it in places like Bangkok, where when there are the Chinese holidays, you see a lot of Chinese tour groups here. But China has a high-yield traveler segment, is in China, and it’s very active. It’s just you don’t see it that much because the numbers are obviously a lot smaller. But I think we need to remember also why people travel now. And people want to have these unique, authentic experiences. And with that, obviously, now people people, you know, are willing to step out of their hotel and do that. So with that, it’s interesting to leverage that new travel behavior, you know, which has been almost like bread during the COVID time. But yet, in the end, what destinations are looking to do when they focus on tourism is to make more money for their stakeholders, for their residents, for their businesses. And that’s not the big hotels and the tour operators, but it’s also the small businesses. And it’s the entire visitor economy. all to the small businesses, and it’s the entire visitor economy. To now bridging that, I think, is a tremendous opportunity now to making sure that money stays in the destination, that there is more money, that people stay longer, that they don’t just go to the Instagrammable moments and take that photo, but also trying to connect with these communities and build these relationships and, you know, kind of support the local artisans or the local restaurants.

Yeah, I would agree with that, Jens. So we’re coming towards the end of this pilot episode of the High Yield Tourism podcast. I think there’s plenty of food of thought there for our listeners, Jens. I think there’s plenty of food of thought there for our listeners, Jens. I think there’s plenty of food of thought for ourselves, issues that we’ll probably follow up on and talk about in greater detail in coming episodes. What’s your plan for the podcast over the coming weeks? What kind of areas would you really like to see us tap into and get some new insights to help us drive forward this concept?

Well, I think our reason for starting this podcast is really to open people’s eyes in the industry to look at maybe tourism marketing slightly different. And as you said before, now there’s this shift a little bit from just focusing on numbers, but focusing on different metrics. And I think that’s, I think the main goal, just open people’s eyes, different metrics. And I think that’s, I think the main goal, just open people’s eyes, educate them about the potential of high-yield travelers, but then also providing tools and assistance to destinations, to travel brands, from hotels, to DMCs, to operators, attractions, museums, restaurants, anybody to see how can I attract these high-yield travelers in order to make more money, in order to have a person in my destination, in my hotel, in my attraction, in my restaurant that actually appreciates what I have been working so hard for, what my staff is coming to work every day and is proud to be here to create a service and deliver that promise. You know, that’s what I think is the holy grail of what we want to achieve. And with that, I think bringing in interesting people, you know, from the industry, from destinations, from hotels, from associations, journalists, but also maybe outside the industry where we can learn from how actually tourism can connect to, let’s say, food and agriculture, because that’s a major part in terms of reducing the leakage factor and to create authenticity. When people travel, they want to take something home. They want to kind of maybe if they travel to Colombia, they want to take out that authentic Colombian coffee. When they travel to Long Pabang or to Thailand, they want to take home some authentic silk that is done by someone from the local village. So all of that, I think, becomes very interesting and interesting discussions that are all aligned to that concept of high-yield tourism. Yeah, I would agree with

with that, Jens. I think what we’re hoping to do is we want this to become a global conversation. We want to posit some tough questions. We want the travel industry and the related sectors to really question themselves about how this is going forward. Now, we know that’s already happening. If you look at LinkedIn on any day, you’ll see a lot of posts and a lot of articles and a lot of opinions about the future of tourism. We’re looking at a specific angle of the future of tourism, but we really like your feedback as we go forward. We’ve got some exciting guests lined up for the coming weeks and months, and we’re going to be asking some challenging questions and looking into some really, really innovative and different angles about visitor economies going forward. So we’d love to hear your thoughts and your input. Please join the conversation on our LinkedIn page at high yield tourism that has a hyphen in it, high hyphen yield tourism. So my thanks to Jens for joining us on this first podcast today to share some really, really interesting thoughts and really to float out some ideas that we’ll hopefully be talking about in future, Jens. Thanks so much for that.

Thank you, Gary. And looking forward to continue the conversation.

Yeah, likewise. So we’ll be back next week to talk more high-yield tourism. We’ll see you then. Thank you.