Understanding the value of digital connectivity and strategy in smart cities, Zurich Tourism is helping its destination partners drive new business with sophisticated digital tools.
By March 2016, over half of the 10,500 hotels rooms in Zurich will have tablets for guests to use to order services in the hotel and learn about the destination outside the hotel. The rest of the rooms should be outfitted by the end of next year.
The rise of the “smart city” megatrend hinges on widespread digital connectivity. By developing platforms for more people and more things to communicate with each other — the basic foundation of a smart urban ecosystem — municipal and corporate leaders worldwide are developing new business opportunities in every sector, including tourism.
Martin Sturzenegger, CEO of Zurich Tourism, says convincing almost all of the hotels to adopt the in-room tablet strategy wasn’t easy. The hotel owners originally didn’t really see the business value of integrating “The Digital Concierge” tablets into their systems, even when they were being provided free of charge, although that sentiment has since changed.
The devices are paid for by Zurich Tourism, the Zurich Hotel Association and Zurich Casinos.
According to a Zurich Tourism brief: “While guests don’t often dare read the in-room hotel folders, The Digital Concierge is used often and for long periods of time. The tablets at the Townhouse Boutique Hotel Zurich show an average usage of eight minutes per session since their installation in late July…. Reviews on TripAdvisor mention the tablets specifically as a plus.”
For the last two years, Sturzenegger and his team have strived to expand the tourism bureau’s role from marketing to what he calls “enabling.” A big part of that consists of developing new digital tools like the hotel tablets to enable hotels and other destination partners to become smarter, more digital savvy businesses.
Another example, Zurich Tourism provides an online platform that hotels can use to create their own search marketing campaigns, which the bureau will track and then deliver data back to the hotels on metrics like audience reach and booking conversions. The bureau reports that the cost of acquisition for hotels is about 10% on average, considerably lower than online booking sites.
Sturzenegger says the next step is marketing Zurich as a smart city to the world, rather than just developing intelligent marketing platforms and keeping them behind the scenes.
With other destinations such as Amsterdam, Berlin, Barcelona, Vienna, Singapore, Sydney and many more now positioning themselves as smart cities, the business value of that is becoming more apparent to attract both leisure and business markets.
Following is an edited Q&A with Sturzenegger focusing on the future of digital destination marketing and the role of tourism bureaus heading into 2016.
Skift: Zurich has traditionally had a rather conservative image. How are you shifting that perception?
Martin Sturzenegger: We did quite a profound analysis about how we are perceived, and what the city is today and where we’re going to move the image of Zurich. The one main thing we’re perceived as is cultivated. We have always played the cultivated angle in our positioning on the one hand, but on the other hand, Zurich has changed its face over the last 30 years.
Zurich is a party city. We have more than 150 clubs. Zurich is a very vibrant city. We have a lot of design shops and contemporary galleries. This is a side not too many people know. If you talk to a Brazilian, they’ll say, “Oh, Zurich is a financial city. Oh, boring.” We’ve tried to change that. How we do that is we position everything in Zurich with videos of people from Zurich telling their stories. We do that on a consumer level, as well as on a B2B (business-to-business) level.
So on our website, here you have a video of a fisherman telling his story on his little boat about why he loves Zurich. He provides a selection of tips, and then if you like one of those tips, you can log in and put it in your favorites to build your itinerary of Zurich. We can also use all of those videos in meeting brochures and media communications, so the strategy is very flexible.
Skift: What was the motivation behind delivering The Digital Concierge tablets (developed by SuitePad in Berlin) to over 10,000 hotel rooms in Zurich?
Sturzenegger: We’re going more and more toward an enabling role as a destination marketing organization (DMO). We try to figure out where there are challenges in the destination, or things where we could act as an enabler. We thought, well, what people really want is having a digital device in the hotel room where they can order stuff in the hotel room, and where they have all the information about the destination in one place.
Because we have quite an interesting financial model with the company providing the software solution and some of our sponsors, we can provide tablets free of charge to all hotel rooms in Zurich. Even the first year of service is free of charge. The hotels pay the software fee from the second and third year on. We were able to secure the tablets and software for a tariff that we otherwise never could have received from a software company unless we did the pitch for all the hotels.
Skift: What has been the response so far from either the hotels or the guests, anecdotally?
Sturzenegger: Amazing, the owners who have them so far say they’re really cool. One hotel tells me his revenues with room orderings went up by 30%. You have different effects. The guests, they like it because they have all the information at hand. I mean, there’s the argument that you could download the app on your phone, so you don’t need a device in the room. But do you do that when you arrive, download first an app? No, you don’t. You don’t always want to have to download an app.
And this is quite clever. The architecture of our website is the same back end as the tablets, so we can feed updated content right into tablets easily. The next possible step we plan to go with the tablets is to let the people take them out of the hotels. That would provide a solution for the roaming problem that visitors usually have, because you would have a tablet with you, so you can surf and whatever. But first the hotels need to be relaxed about this. The ones who started with the solution in the rooms, they are relaxed now because they see that the tablets are making them money and people don’t steal the tablets. Second, we need to make a deal with one of the mobile providers.
Skift: How else are you enabling your destination partners like the hotels?
Sturzenegger: This is even cooler but more technical. We know that the hotels always want to compete against the big online booking agencies, but they always think, “Oh, it’s so expensive to do that.” So in the past, they said we should create a shop (hotel booking engine) on our first website page. As you see on our website, we don’t have a shop on the first page. You can book your hotel (on the accommodations page), but you don’t see a shop on the first page. Because we do not even do half of a percent of all the hotel night bookings. If we would increase that, double it, we would do one percent. For the hotels it’s nothing. It’s no leverage.
What we thought really would help the hotels instead is they could benefit from search engine advertisement, or SEA (“paid search” in U.S. phrasing, or SEM, search engine marketing). Many of them aren’t right now because it’s very complicated to be good at that. Whereas, as a DMO, we need to be good at that. So I met with the CEO of Google in Europe, and we created a framework together to provide a clever strategy for us and for the hotels for SEA.
This is really complicated because you have to track your campaigns much more than classic campaigns. Over 80% of the hotels have no clue about that, and yet, people are usually searching for hotels first on Google, before they go to TripAdvisor or an online booking agency. So this is how we can boost traffic to hotels’ websites. We do the whole SEA for hotels. They can come to us, and they can fully outsource it. They don’t need to understand anything, and we do the whole campaign for them.
Skift: So you’re basically providing the same turnkey services of a third-party search engine marketing provider, as well as the ability to deliver added value on your website with supplementary marketing.
Sturzenegger: Yes, we do the whole campaign for a hotel. They pay a monthly fee and the ad budget. They spend from 1,000-10,000 Swiss francs into a campaign, and we do the whole thing. We can tell them how much increase they have on their website, how it’s affecting the booking process, and so on. It’s all tracked, and it’s quite technical labor, but it’s really a mighty tool for the hotels.
Skift: Shifting to the meetings and conventions market, Holland recently launched their new convention bureau website organized by industry sectors versus the Dutch cities themselves. Has there been any internal talk about aligning the Zurich convention bureau website around Swiss industry expertise versus Swiss cities?
Sturzenegger: Yes, we are in discussions. We’ve already restructured the whole leisure travel story, and now we’re in the middle of restructuring meetings and conventions. We will go exactly into this direction of industry cluster strategy as Amsterdam, marketing-wise, but as well enabling-wise. What I said before, what we did for marketing hotels, we can do the same thing with those clusters within the meetings and events industry.
So, this is again about less marketing, more enabling. That’s the recipe. We see a very strong role for the DMO of the future playing the role of enabler within the destination across all markets.
Skift: So how does all of this fit in with the surge of interest about smart city technology and smart tourism branding. Some destinations like Amsterdam and Berlin are using messaging around that as a consumer-facing differentiator. Has there been any talk in Zurich about adding your role as a tech-centric DMO into another layer of your branding?
Sturzenegger: Yes, we are in the middle of that discussion as well. I was in Tel Aviv recently and they won in 2014 the world’s smartest city, or whatever. When I look at the elements they offer, Zurich has done all of that for years. Zurich is quite advanced in its technological infrastructure, but we don’t promote it these days. But we are in discussions with the city about the positioning of Zurich as a smart city. This will have a strategic element for us as a destination promoter. It will have marketing elements for the city as well.
Skift: So, you’re saying you anticipate that there will be new consumer-facing creative promoting the image of Zurich as a next generation smart city?
Sturzenegger: I guess so, but it won’t be the number one branding element of Zurich.
Skift: It’s just a part of it.
Sturzenegger: Yeah. I see more and more it tends to be like sustainability five years ago. Every city had to promote sustainability, but now it’s taken for granted. These days a modern city needs to be smart. Yes, we are.
Skift: Right, but many DMOs still use that sustainability message significantly in their marketing, especially on the group side. Now there’s a strong shift toward smart city branding as a differentiator, which resonates with millennials especially. Smart is the new sustainability. It seems Zurich might benefit from integrating that into your consumer-facing marketing communications.
Sturzenegger: If I’m honest with you, sometimes I think destination marketing organizations should be smarter than just talking about a smart city. What we try to do is create smart concepts to market the city, or enable the city. The City of Zurich also does a lot of smart stuff. But yes, we don’t really market that these days. What we now need is a clever way to market this.
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Photo credit: Zurich Tourism developed a search engine marketing platform for the city's hotels. Kameha Grand Zurich