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April 8, 2022

Strong relationships between DMCs and tour operators essential for travel recover

Networking in tourism plays an essential role as it facilitates partnerships involving interacting elements such as tourists and businesses.

By Globaldata Travel and Tourism

The year 2022 is set to be pivotal in the travel and tourism industry, but challenges remain due to the ongoing pandemic and rising cost of living. To tackle these difficulties, the relationships between DMCs (Destination Management Companies) and outbound travel operators must become stronger than ever to capitalize on the growing demand for leisure travel.

Networking will be key to driving recovery

Networking in tourism plays an essential role as it facilitates partnerships involving interacting elements such as tourists, businesses, institutions, and the local community. It is imperative for DMCs and tour operators to form close working relationships due to their interdependency. The DMC benefits from inbound tourists, and an outbound travel operator profits from a DMC’s promotional and organizational activity. Many small to medium-sized enterprises (SMEs) depend on networking to build brand awareness.

The effects of globalization and the pandemic have posed significant challenges to the travel industry. The need for collaboration and the formation of B2B (Business-to-Business) partnerships is now more critical than ever. The relationship between DMCs and tour operators has the potential to increase passenger flows and revenue streams and develop the destination’s branding. Therefore, enhancing the development of these partnerships will substantially impact the travel industry in what is expected to be another challenging year.

A culture of sharing knowledge and learning can emerge once the partnership has been established between the tour operator and DMC. Sharing experiences, challenges, and solutions is one of the most effective forms of learning. The ability to collectively implement learnings across the destination also increases the return on training investment. Furthermore, the relationship with the outbound operator can help increase in-destination expertise, promote brand awareness, enhance the overall customer experience, and ultimately increase revenue. If the relationships are mirrored between DMCs and tour operators globally, then industry recovery could exceed expectations in the short term.

The relationship between a DMC and trade has proven impactful in the past

The networking relationship within the travel industry has been proven successful. For instance, the strong relationships developed with outbound trade by Iceland alongside its social media campaign helped tourism grow by 437% from 2010 to 2018 according to GlobalData’s Tourism Demands and Flows database.

Projections show that the global international tourism industry will recover by 2024. Trade networking in this period is needed more than ever. This could be a successful way for the recovery of travel industry in the next few years due to the estimated growing number of travellers globally, which creates additional demand for service providers.

To promote networking, some travel associations like AITO (Association of Independent Tour Operators) and IATA (International Air Transport Association) are heavily engaged in organizing B2B travel and trade fairs around the globe where travel service providers are provided the opportunity to showcase and exchange information on their products such as travel packages or travel experiences. To survive in this recovery stage, SMEs should expand their trade network and continue to collaborate with DMCs.

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