Cooperation in tourism

The success of international sales in tourism depends to a great extent on the efficient management of customer relationships and distribution channels. Through customer relationships management, the company should be able to fulfil customer requirements and changing needs, which helps to reach the best possible outcome. In most of the cases, the offerings and expertise of single service providers do not suffice to respond to the demands of international tour operators and different target groups. As a result, networking is vital to any company operating in the tourism sector.

 

Cooperation and different types of networks:

Strategic alliance (e.g. the oneworld airline alliance): International level cooperation with long-term objectives. Strategic alliances are commonly formed in the following situations: (1) to promote global competitiveness, (2) to reduce product development costs or (3) to establish a more efficient logistic system.

Cluster (e.g. OSKE, Centre of Expertise Programme): A cluster supports the flow of information and commodities between its members. A cluster can include cooperation between companies from different business sectors. The main motivation for this kind of cooperation is centralization and sharing knowledge.

Network: A long-term partnership that produces added value to the parties involved. Networks are based on contracts that are more manifold than the simple subcontracts used with suppliers. There are different forms of cooperation. For example, network members can share marketing costs or their different services. It is common to find in all networks a dominant member who has a particular interest in leading and keeping the network together.

Co-opetition: This refers to close cooperation with competitors. One good reason for taking a co-opetition approach is the possibility to increase the value of the products and services offered by single companies. There can be a product that is difficult or unprofitable when produced by each company individually. However, by joining forces, both companies can produce a profitable product. Another good reason can be entering a new target market or the development of a new product concept. A new target market might require a larger supply, production capacity or a different approach, something that may go beyond the resources of a single company.

Co-opetition aims to serve customers and target markets better, strengthen the market position of companies and reach new target groups. Competition does not necessarily end in other areas. However, though co-opetition the company aims to achieve a better profit margin or to do something that cannot be done alone. Economic benefits from co-opetition are, for example, the sharing of marketing costs, production costs, common premises and staff.

 

The cooperation challenge

Cooperation networks in tourism are formed mainly on a supplier - reseller axis. Service providers traditionally assume the role of suppliers who in most of the cases do not determine the sale price of the product nor decide to whom and which target group the product is sold. It is in the hands of resellers (DMC/incoming agencies) and buyers (international tour operators) what the end customers actually experience in the different service encounters. From this perspective, one can see that the sales and development of the products offered by specialized service providers are not in their own hands. Hence, it could happen that the specialized knowledge of a service provider goes unnoticed if the business partners and the cooperation form are not the right ones.

Due to the competition that exists between service providers, cooperation networks do not enjoy the openness needed to promote a holistic touristic development. Commitments take different forms and to a great extent most agreements are oral. The fact that future planning is not done together hinders the flourishing of product development.