Living like a local is now becoming a mental state for millennials that are moving from one country to another. It’s easy to become overwhelmed with online travel information, and it has become increasingly more difficult for travellers to find the right offer and ultimately for hotels to meet customers’ demands. At the same time, the internet is a powerful tool for customer engagement and retention and so many hotel businesses are now dependent on it.
Online travel agencies (OTAs) have done relatively well in the last couple of years especially in the world of independent hotels. Tnooz – a leading travel technology magazine –reports that in Europe almost three quarters (74%) of independent hotel reservations come from OTAs.
However, with OTAs and social media campaigns dictating customers’ hotel destinations, it becomes harder and harder to offer them an experience that is truly authentic and personal. This is particularly relevant for large hotel businesses where guest-oriented services is rarely supported by on-the-ground experiences.
This is causing a great divide between the digital world and customers’ demands. Large and established companies should ask themselves why a new generation of entrepreneurs is doing so well. And the answer lies within the ethos that drive their business model. Joe Gebbia, the co-founder of Airbnb, based his company on the belief there should be an element of trust between customer and guests. If there is trust, guests would feel comfortable to push their own boundaries and ultimately experience the place they visit. This is why he once defined travel as “a magnificent buffet of local experiences”.
From a broader perspective, Airbnb is just one of many businesses that is sending out a powerful message to the hospitality community: we need to stop thinking about customers as a sole unit and start creating personal experiences where people feel inspired by their actions as much as they are by their travel experiences.
Social enterprises can be a leading model in this regard as they have a human vision behind their business model, which can have an impact in society but also generate trust and a sense of purpose for customers. There needs to be greater connection between entrepreneurial ideas with social impact and large businesses that have a strong presence but are often detached from society. It is about the personal touch that goes well beyond the postcard image. It is acknowledging that there are more and more conscious travellers that care about the way hotels treat the environment and whether they are genuinely connected to the local community. This is how Dave Koken and Eytan Elterman realised that it was time to embark on an entrepreneurial journey.
Two years ago the duo were living on opposite sides of the world. Dave was travelling throughout south-east Asia helping a non-governmental-organisation develop partnerships with local communities. Eytan was working with long-time friend and Lokal co-founder Marco Bollinger to produce a documentary about rainforest conservation in Costa Rica’s beautiful Osa Peninsula. Although living in two completely different environments, they both realised that the personal relationships they built along the way led to truly authentic travel experiences.
The two also realised that the community-based travel experiences they were finding often directly contributed to local development and the conservation of fragile environments. Staying at a community’s ecolodge meant more than a great night of sleep, it meant supporting alternative livelihoods for dozens of people; canoeing through the rainforest was more than a beautiful afternoon, it helped to preserve over 1,000 acres of rainforest. The local cooperatives, tour operators and entrepreneurs they met had thoughtful, long-term visions for how tourism could help to improve life for local people. The combination of genuine connections, natural beauty and positive social impact made these experiences special and they knew other travellers would be interested in this type of travel. But they consistently saw that local communities were struggling to attract customers and often lacked the resources or connections to promote their businesses.
With local businesses and travellers needing each other, they started asking themselves, is there an opportunity to start a business? Could we offer a journey with the promise of real human connection? As travellers first and entrepreneurs next, it was not just about transforming their relationships into a business but also about sharing their passion for empowering less advantaged groups. Two years later Lokal Travel had built a global community that helps visitors to find local experiences and support local economies. Lokal Travel is at the crossroad between hospitality and local development by making sure that for every $1 revenue, they send over $4 to local partners. To an extent, Lokal Travel combines tourism with microfinance models by making sure that families or small local businesses receive profits that can then be reinvested in the local community.
Tourism in emerging economies is thriving. The World Tourism Organisation reported that in 2011, international tourism arrivals to emerging market and developing countries amounted to 459 million. Yet, with an increasing number of people travelling, this is creating huge opportunities for businesses, yet if we fail to safeguard both the natural environment and local culture, it will become harder and harder to preserve the lands’ identity. Tourism plays a significant role in tackling poverty alleviation, especially in emerging economies. Businesses need to understand the local environment and to undertake concrete steps to strengthen socio-economic engagement. To this end, Lokal Travel is a model that has the potential to grow and be replicated at a global scale. It not only offers a unique experience to customers, it helps to prove that a more sustainable form of global travel is possible.
Customers seem to be keener on supporting social business models than traditional companies. They understand both the entrepreneurial mindset and the positive impact that lies behind their business. Social businesses and customers are driving the agenda of hospitality as they share a vision. Established companies still need some time to understand the value of social businesses but certainly there is greater awareness of local community from a cultural, environmental and economic perspective. New generations have a great responsibility to rewrite the current scenario but change is already happening.