Industry Update
Opinion Article15 August 2016

Five Influential Marketing Trends in the Tourism and Hospitality Field

By Shangzhi Charles Qiu, Research Assistant at the Purdue Tourism & Hospitality Research Center

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Marketers in the tourism and hospitality field are trying their best to keep up with the most fashionable practices in marketing. At the same time we eager to learn from the best practices in other industries, we are struggling with matching the popular stuff with the unique characteristics of hospitality products. This has been long a huge challenge for both practitioners and academics in hospitality. I am not claiming myself an expert in marketing, but would like to share some ideas based on my research experience in the area of hospitality and tourism marketing. Under the influence of social media, convergence of virtual and physical experience, and rise of creative society, I identified five marketing trends that may significantly influence future tourism and hospitality marketing practices.

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They are: 1) application of augmented reality (AR) technology to improve experience; 2) application of virtual reality (VR) technology to promotion; 3) viral marketing through social media; 4) human spirit marketing; 5) collaborative marketing. These five marketing trends are discussed below with evidence from both industrial dynamics and academic researches.

Augmented Reality in Marketing

Augmented Reality (AR) technology could bring valuable opportunities for destination marketing. AR is a view of the physical world with additional information. Examples include a screen that could show a camera feed with digitally generated content, and a mobile app that connects the physical objects to digital content. The success of the mobile video game Pokemon Go released on July 6th, 2016 demonstrates the power of AR technology in customer experience enhancement. In Pokemon Go, the virtual world is synchronized with the real world. And the location of the avatar is the same with location of the mobile phone, determined by GPS. Therefore, in order to move the avatar to different places, the players have to move themselves. Players are actually experiencing the life of the avatar by walking around the areas searching for pocket monsters. This unprecedented AR game experience has achieved unexpected success in only a few days. On the launch date, the number of players already exceeded the capacity of online servers. Moreover, only 3 days after release, the daily active user number of Pokemon Go was already approximate to that of Twitter (Skrebels, 2016). This game has added $7.5 billion to the market value of its owner Nintendo in just two days (Reuters, 2016).

One opportunity for destinations is to appeal to the experience of pokemon collection (pokemon is short for pocket monster, creatures to be collected in the game). Pokemon Go has been designed in this way that certain pokemon species are common in one area but rare in other areas. In addition to see real wild life in the destinations, perhaps there will be another interesting thing to do at the tourism destinations: catching new species of pokemon. Destinations can consider cooperating with Pokemon Go to have exclusivity of certain species so that players have to visit the destination in order to collect the precious pokemon species. Attractions can also utilize this platform to increase its awareness. Today, it is common to see large numbers of people stop by local landmarks to collect pokemon and virtual equipment. Pokémon Go Sydney Walk that got together 2000 players at the Sydney Opera House was perhaps one of the earliest events of this theme (Rossignal, 2016). The successful launch of Pokemon Go is followed by a series of viral events featuring the theme of pokemon world on major social media platforms. These eye catching events inevitably draw more attention on the destinations.

AR technology has already been used in improving tourist experience, particularly adding entertaining elements to the journey. For example, TimeWarp and Urban Sleuth are AR gaming applications that actively engage users through the reconstruction of historic events and buildings, or by sending tourists on missions within a destination (Kouvanis et al., 2012). In the era of experience economy (Pine & Gilmore, 1998), the attention of marketing is gradually shifting to experience design and experience co-creation (Prahalad & Ramaswamy, 2004). AR technology will play a critical role in fulfilling this goal by bringing a new concept of experience to consumers so that the work of experience creation will be redirected. Tourism marketers will also need to reconsider or even redefine the experience that destination offerings can provide. In the future, the AR not just enhances the visitor guide experience, but also adds fun to the trip.

Virtual Reality in Marketing

Application of VR will change the future of destination promotion since potential tourists will have a more direct experience about the tour than just reading other tourists' narratives or watching videos and photos. Virtual Reality (VR) is an immersive experience. The user's view is completely different than what is in their real world environment. It usually involves a head-mounted screen that takes over users' whole field of vision, showing something completely unrelated to the world around the users.

The sense of sight is very important in tourism, where a lot of experiences depend on visual stimulation (Guttentag, 2010). This feature makes simulation of real world particularly valuable for destination promotion. Williams and Hobson's (1995) research revealed that touristic VR environments have great influence on tourists' planning behavior due to enhanced interactive experience and the feeling of immersion. In addition, VR technologies in combination with multimedia can aid destination marketers in creating memorable experiences.

The potential of VR in future tourism marketing practice has been recognized in recent tourism literature (Huang, Backman, Backman, & Chang, 2016). Huang et al.'s (2016) study indicated that VR touristic environment leads to higher travel intention because of greater perception of autonomy, competence and relatedness of the users. Study by Tussyadiah, Wang and Huang (2016) demonstrated that VR tourism experience has very strong persuasiveness if the users are fully immersed. Users are very determined about their (dis)interest in the place after a short time of VR experience.

In practice, Destination British Columbia (Destination BC) in Canada is the pioneer of Destination Marketing Organization applying VR. According to Destination BC (2014), the "The Wild Within VR Experience" campaign launched in December 2014 used VR as a promotional tool. The VR experience consists of a 360-degree video of the Great Bear Rainforest, a diverse and protected area located along the central Pacific coast of BC. The film is shot in both first person and third person view and follows general touristic experiences from the view of tourists. Viewers are journeying along the coastline in a boat. To add an interactive element, for example, viewers later have the option to either visit a sea lion colony or to go hiking in the mountains. (Destination BC, 2014). Today, more and more tourism businesses are trying to apply VR technology to product or destination promotion (Huang et al., 2016; Tussyadiah et al., 2016). As this technology is gradually applied across different domains of personal life and commercial activities, it will become a popular marketing tool for tourism marketing practitioners in the coming decades.

Viral Marketing through Social Media

Viral marketing has become a mainstream marketing tool used by multinational enterprises in different industries, including Nike, Unilever, and Volkswagen. The recent trend toward viral marketing also has been fueled by the growing popularity of social media (Schulze, Schöler, & Skiera, 2014). The case of CityVille, an online video game that reached nearly 100 million players in a few weeks, demonstrated the power of viral marketing (Schroeder, 2011). The recent success of Pokemon Go is also attributed to the word-of-mouth on online social networks that connects billions of consumers.

Theses successful cases inspire more and more businesses to conduct viral marketing. Theories in social psychology and marketing provide reasons behind the success of viral marketing in contemporary market environment. First, viral marketing is based on the power of word-of-mouth (WOM). It is commonly recognized that WOM is much more effective than advertising in changing consumer's attitude and purchasing behavior and consumers are more inclined to accept information from social sources than from commercial sources (Smith et al., 2007). Second, social media that connect billions of consumers in the world enables the influence of WOM to expand exponentially. The ease and accuracy of reproduction of electronic messages by general users actualize the exponential growth (Kaplan & Haenlein, 2011). Third, contents used for contemporary viral marketing meet consumer's motivation for sharing. According to Schutz's (1966) FIRO (Fundamental Interpersonal Relations Orientation) theory about interpersonal behavior, consumers are motivated to share the electronic content because its entertaining effect and personal relevancy satisfies one or more of three interpersonal needs: inclusion, affection, and control.

Recent literature shows that social media are becoming increasingly important information sources for tourists (Xiang, Magnini & Fesenmaier, 2015). WOM is regarded as a particularly trustful and reliable source of tourism information due to the intangibleness of tourism experience. And recommendation from friends is also a major source of destination awareness for many tourists. Therefore, I predict that viral marketing will be more and more important in tourism marketing.

Human Spirit Marketing

The concept of human spirit marketing was proposed in the book Marketing 3.0. It is a response to the rise of creative society. Based on literature discussing the increasing need for spirituality and spiritual resources in creative society, Kotler et al. (2010) asserted that consumers today are not only looking for products and services that satisfy their needs but also searching for experiences and business models that touch their spiritual side. Supplying meaning will become an important form of value proposition in future marketing. To touch consumer's spirit, companies should first treat consumers as holistic human beings rather buyers. And a holistic human has four components: physical part, a mind for independent thoughts, a heart that feels emotion, and a spirit which is soul and philosophical center (Covey, 2004).

Human spirit marketing requires marketers to target consumer's mind and spirit at the same time to touch their heart. In terms of branding, companies should attend to brand integrity building in addition to brand identity and brand image building. Brand integrity is about being credible, fulfilling promise, and targeting consumer's spirit. For example, Timberland differentiates through the community volunteer program "Path of Service" that involves employees. This program manifests the spirit of engaged citizenship, environmental stewardship, and global human rights. This program continues even at the company's most difficult time because Timberland's leaders believed that community volunteer service is an integral part of the brand DNA.

Gustavo (2013) analyzed current environment for tourism and hospitality marketing and proposed that tourism businesses should develop new marketing management models under the Marketing 3.0 paradigm. He witnessed that many tourism and hospitality business leaders have embraced human spirit marketing. For instance, in response to a society increasingly sensitive to environmental issues and clients who are more emotional and concerned about personal well-being, several businesses have centered public relation effort on programs of responsibility and environmental awareness. These businesses includes Starwood Hotels and Resorts who emphasizes the responsibility for environmental stewardship and sustainable business practices in its mission and strategy, and Emirates Airlines who built a foundation to provide humanitarian, philanthropic aid and services for children of Bangladesh, India, Sri Lanka and Kenya. Therefore I predict that the concept of human spirit marketing will continue to influence the marketing practice in tourism and hospitality field because it meets to the requirement of today's consumers for a trustful brand.

Collaborative Marketing

Collaborative marketing is another important trend in the era of Marketing 3.0, driven by the new wave technology of expressive social media and collaborative media (Kotler et al., 2010). This new wave technology increases the interaction opportunities between firms and consumers, firms and firms, and consumers and consumers. As a result, marketers no longer have full control over their brands. They must now collaborate with consumers and other organizations. For example, the "Free Doritos" advertisement that won the top spot at the 21st Annual USA Today Super Bowl Ad Meter was actually a user-generated ad.

The concept of collaborative marketing has been supported by both theory and practice. The service-dominant (S-D) logic theorizes the joint role of organizations and customers in the value co-creation process (Vargo & Lusch, 2004). Based on the value co-creation assumption, Vargo and Lusch (2004) suggested that companies seek to collaboration with other companies and consumers to enhance marketing competitiveness. The S-D logic, which aims at becoming the future dominant marketing logic, is gaining more and more acceptance in marketing literature. Meanwhile, new wave technology facilitates the management of value co-creation by companies, making collaboration with consumers more feasible (Kotler et al., 2010).

Collaboration is particularly important in destination marketing effort due to the fragmented nature of tourism industry. Relevant studies suggested that collaborative marketing is a feasible solution to various challenges in destination marketing (Wang & Xiang, 2007) and is effective in building consistent brand identity and offering competitive value proposition (Park, Cai & Lehto, 2009). Advancement of social media technology is moving the collaborative effort toward a more profitable value co-creation pattern (Cabiddu, Lui & Piccoli, 2013).

Researchers proposed that practitioners should pay more attention on collaborative marketing and value co-creation management in the future (e.g., Cabiddu, Lui & Piccoli, 2013; Wang & Xiang, 2007). Both academy and industry are increasingly aware of the value of collaborative marketing. Value co-creation between tourists and organizations has become a hot topic in contemporary tourism research (Rihova et al., 2015). Therefore it is reasonable to predict that collaboration with consumers and other organizations will gradually become one of the mainstream marketing strategies in tourism sector in the coming decade.

"The idea of this article comes from my PhD qualification examination process. The issue addressed in the article was enlighted by the examination commitee member Dr. Xinran Lehto."

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Shangzhi Charles Qiu

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