In episode 5 of our "Driving Place-Based Innovation" podcast series, in partnership with the NewcastleGateshead Initiative, we get a better understanding about how to champion local supply chains through digitalisation programmes.
In episode 5 of our "Driving Place-Based Innovation" podcast series, in partnership with the NewcastleGateshead Initiative, we'll get a better understanding about how to champion local supply chains. Food and Drink North East talk about the North of Tyne BuySupply Platform and their partnership with the NewcastleGateshead Initiative supporting the Hospitality.Innovation.Tourism.Supply programme. Visit Finland also share the work they've done with regards to building a DataHub and the diversification of their tourism offer. These examples demonstrate how digitalisation can improve knowledge sharing and relationships along the supply chain.
You can listen to the episode here 👇
Food and Drink North East is a trade organisation that was set up in 2019 to support and celebrate the food and drink and hospitality sectors in North East England. The NewcastleGateshead Initiative focuses on the strategic approach to the visitor economy over the next decade in the Newcastle area and is involved in a destination development partnership pilot project with Food and Drink North East looking at how collaborative opportunities can maximise the potential of the visitor economy.
Food and Drink North East places the circular economy as a core value, which influences how they engage and work with their network. Having spent between three to four years reviewing the profile of the food and drinks industry in North East England prior to launching the company in 2019, it was clear that this sector was largely underperforming as a region when compared to neighbouring areas, such as Yorkshire and North West England. In terms of gross value added to the economy, food and drink production and manufacturing in North East England accounted for 2% when the company was founded, compared to 12% or 13% in the neighbouring regions.
With this in mind, Food and Drink North East was established to address the huge gap in terms of business support and strategic direction, and more crucially regarding fostering a better sense of identity and collaboration in the region. From this context, the organisation committed itself to focusing on the grassroots and spent a lot of time talking to businesses across the entire supply chain, including very small producers and big manufacturers. Food and Drink North East's mission focuses on developing a vibrant and engaged community and driving partnerships to build momentum in the development of the food and drinks sector.
Starting the company involved a lot of work to get people excited about the idea and to understand what can be achieved by having clear strategic goals as well as identifying the necessary resources to successfully implement this vision. This required big cultural changes in the way the food and drink industry operated and went beyond being just an economic development project. Food and Drink North East really needed to listen to people to understand what it was that they wanted and the gaps that they thought needed to be filled.
The essence of the work undertaken by the NewcastleGateshead Initiative and Food and Drink North East is to raise awareness of the North East of England's product offerings, to place the region on the map and change people's perceptions about the area. People who have visited North East England love their experiences and there are clear synergies between the ambitions of both organisations, which facilitated the creation of their partnership.
The Hospitality.Innovation.Tourism.Supply programme was a key outcome of the collaborative mindset of both organisations. By working together, this project enabled over 700 businesses to integrate their supply chain within the tourism sector and showcase the authenticity of the region through facilitating new relationships. These local producers also have a bigger platform to tell their own story about Newcastle and contribute to the diversity of the destination's offering.
The North East of England is at the bottom of the league tables for both international and domestic visitor numbers and working together with a clear vision is of extreme importance to display the strong characteristics of the region and show why people should visit. By working smarter and through maximising shared missions, the sector can collaborate by integrating the supply chain. For example, Food and Drink North East launched the North East Chef of the Year Award, and it's important to consider how to branch out to involve hotels and local colleges so that the industry collaborates around shared missions.
The North of Tyne BuySupply Platform is a really important initiative that is still in its very early days, but lots of thought has gone into its development and around the solution it's trying to provide. The food and drink industry as well as the hospitality industry are very entrepreneurial, with new businesses constantly emerging across the UK. It is a very concentrated and competitive marketplace. Taking a pro North East England perspective, it's often very difficult for a new business that hasn't got a great deal of experience outside of this region to enter new sales channels that are more national - or even international - in focus.
The vision for the platform was to create an ecosystem that was built on the terms of North East England's food and drink businesses. This arose from the consultation process and speaking to businesses about what they wanted and to enable local connections. There was a clear desire to focus on supply chains and for businesses to grow collaboratively together. As a case in point, there is a stark disconnect between local hotels and restaurants and the primary supply chain. The reasons for this are complex and not because of a lack of desire to source more locally. If small-scale local businesses aren't very visible or well-known, then companies tend to stick with the status quo in terms of which distributors or wholesalers they use. The North of Tyne BuySupply Platform aims to create an ecosystem whereby it was possible to build a more competitive marketplace by highlighting smaller organisations within the supply chain. Buyers are vetted and curated so that the profile of these buyers meet the needs of the network that has been built through the platform.
Another project being run by Food and Drink North East is an incubator for small businesses, helping to ensure that products are fully developed and ready for distribution directly to consumers. The incubator programme also helps businesses to understand how to make transactions easier. For instance, retail buyers get hundreds of applications each day about stocking new products, but only around 5% of them are ready to being stocked. The incubator programme helps small businesses go through a process to prove their product's credentials and ensure they have all of the certifications required and that the margins and other business administration has been fully considered.
Therefore, the North of Tyne BuySupply Platform creates an environment based upon trust and reciprocal trade. This brings real value by creating opportunities for suppliers to work together. For example, two suppliers can be facilitated to come together to fulfil an order for a hotel and ensure that supply chains remain local, as opposed to being awarded to a national distributor.
With visitors seeing local products from within a 20 mile radius, then they will feel more immersed within the destination. This will encourage additional visitor spending, since they will buy local products as gifts for their family and friends. They will also help promote and advocate for local businesses and suppliers by talking about their in-destination experiences and taking photos of different products, raising awareness of primary suppliers and boosting their marketing reach and ability to build their own reputation.
Involving and engaging more people within the local supply chain is crucial for destinations. The NewcastleGateshead Initiative is working across the entire supply chain, trying to make it as local as possible; not only with regards to traditional products, but also considering hotel amenities and the display of local artwork. While it's not possible to be 100% local and some products will still need to come from outside of the region, it is important to start the journey towards localisation and authenticity from a destination's supply chain perspective.
Innovation is subjective within the business landscape and is hard to pinpoint the full meaning of the word when engaging with a range of diverse businesses across the supply chain. There is a need to demystify the meaning of innovation because people tend to have a perception that innovative businesses focus on developing tangible solutions, such as new software or gadgets, which can frighten some smaller organisations. However, sometimes innovation is also about embedding a culture of agility and change management within a business, such as considering how to approach the recruitment and retention of staff in a different way. Having a subjective understanding that innovation is about every businesses doing something different and improving as an organisation is really critical.
Some businesses are frightened by talk about innovation, particularly at the extreme end of the spectrum of technological developments. Therefore, for some organisations, it's important to only talk about developing the destination. Some businesses are not afraid to experiment and will use any opportunity to maximise their potential to innovate. For example, Maldron Hotel's butler robot - which is implemented as part of their room service offer - helped increase the demand for room service by 17% because visitors wanted to see the robot knocking on the door. In fact, they were quite disappointed when a human brought their food and canceled their order since they didn't want the experience when their food wasn't delivered by a robot.
However, other businesses are further behind in their innovation process and still haven't moved their reservations from a guestbook onto being online. When supporting businesses as a Destination Management Organisation, it's important to also think about the different companies and where they are in their innovation journey. There's also a need to look outside of the visitor economy at the range of innovations currently being done in the tech sector and implement some of these within tourism businesses.
COVID created a situation where innovations were created out of a necessity. Businesses understood that they had new challenges in their operating environment and needed to focus on their supply chains due to the possibility of national shortages. Some businesses were forced to close, disrupting the traditional supply chains and delivery networks. Secondly, businesses became more aware of their carbon footprints and needed to look at their sustainability goals.
The global changes brought about by COVID created an innovation challenge and businesses need to think differently. In these circumstances, the innovation needed is about improving awareness about local products and taking the opportunity to consider micro level businesses. For example, Battlesteads Inn, located in Northumberland, applied their manufacturing model for their restaurant to bring their suppliers closer to them. For instance, they helped their butcher, which was 10 miles away, to buy a unit in the same village to receive the product quicker and have the freshest quality. This kind of innovative thinking from businesses to be adaptable and to have a menu that can change based on what ingredients can be sourced for that day, can bring a premium and help generate added value for visitors.
When looking at the hotel industry and the challenges they faced, it became less about maximising the total number of stays and more focused on improving margins. Changes in the national supply chain are putting additional pressure on businesses and their pricing structures. For example, restaurants started taking fish off of the menu because of the price increases, so it's important to consider how to get this produce locally. With a fish quay about 15 miles from the city centre, the infrastructure which can be used to innovate along supply chains is already in place.
With the reactive nature of innovation, there was a clear period during the COVID pandemic - and more recently with Brexit - where large changes to business operations were required. There has been deglobalisation within the supply chain and the idea that products will always be available is gradually being eroded. Consequently, there has been increased innovation within businesses, who are now more open to adopting new ideas and implementing changes within their organisational processes. However, interestingly, these companies think of these changes as being part of innovation, but instead refer to it as making progress. Businesses have learnt and realised that there is an opportunity to shorten supply chains and incubate businesses that ordinarily wouldn't have been big enough to service their contracts and who wouldn't have been able to grow.
Companies can now more clearly identify the opportunities available for innovation and the pathway to successfully making use of these opportunities. Businesses have a stronger appetite for change and have become more willing to take risks. Businesses need to move from their reactionary approach to innovation and their desire for a more agile culture to counter the shifts in the global environment towards actually embracing change and the different elements that this entails to create this new flexible culture within their organisation.
Visit Finland's main mandate is to build demand for Finland among international travellers. Visit Finland has a very strong development and support role for the Finnish travel industry, focusing on digitalisation, sustainable development and data management. Visit Finland's data strategy takes a holistic approach which not only builds demand and a desire for data-driven decision making, but also aims to improve the competence of industry stakeholders to support and develop their own data management tools.
When attempting to build demand for visiting Finland, it's also crucial to ensure that there is an appropriate level of supply. This is especially important considering the desire for sustainable destination development and the provision of sustainable products.
The digital ecosystem is very complex - with a wide range of different channels and content, using lots of different technologies. Therefore, travel businesses face challenges when distributing and managing their content, which becomes a resource-intensive activity. The Visit Finland DataHub aims solve this issue through its purpose as a digital content hub, helping to distribute the available content. This national content hub enables travel businesses to easily register, login, and then insert and manage their product.
The content on the DataHub platform is non-bookable, so there is no inventory or prices available, but it does allow marketing content to be stored. This means that the DataHub becomes a digital database. The DataHub has an open API which enables several different digital channels to retrieve and publish this data, streamlining content distribution and allowing employees to focus on other aspects of their businesses. The DataHub improves efficiency for local businesses to manage their data in a central database, from which content can be distributed through several different channels.
From the destination perspective, Visit Finland's own channels and regional and local DMOs can also utilise this data and retrieve the content through the API connection to showcase the products and services of businesses within the destinations they represent. This multiplies the reach of marketing activities, with little additional effort. Destinations should understand that developing great experiences is only one facet of managing their destination, but how they are packaged together and shared with target audiences is also key for ensuring products are discoverable and create and improve their brand image.
Destinations are only as good as the amalgamation of their local businesses. In Finland, there are many big travel industry chains and companies. However, SMEs, and particularly small family-owned businesses must not be overlooked. These small-scale experiences are the types that travellers want to find out about and enjoy. Big companies can support the tourism offer, but SMEs and micro-businesses are essential for providing unique and authentic Finnish experiences for visitors.
When considering the roles of different stakeholders within a destination, it is important to consider who is involved in packaging small and unique travel experiences or accommodation. Secondly, destinations need to fully understand the roles to be undertaken by their local and national DMOs in packaging and selling experiences.
Lapland is a region that is heavily reliant on the winter tourism season. Visit Finland is working together with different destinations in Lapland to extend the season and also to create new opportunities during the summer. The summer season in Lapland is equally as fantastic as the winter, but it requires a lot of effort to spread tourism out across the year. This is where the whole supply chain needs to work together, involving both the private and public sectors, to ensure the infrastructure is available.
The innovation involved in reducing a destination's seasonality doesn't happen overnight. It will not happen within a few years and it involves a long-term commitment from all of the stakeholders. Destinations need to make reducing seasonality a strategic priority, but also businesses must commit and invest in the overarching objectives since they are quite heavily exposed to the risks posed by innovation. If businesses change their operating models from only being open for half the year through the winter and working elsewhere during the summer, then they are clearly exposed to the risk if they decide to extend the tourism season and open their tourism business year-round. Therefore, taking a strategic approach to the innovation process to reduce seasonality requires mutual effort. This can help to make the destination more sustainable and boost economic prosperity.
The Lakeland region in mid-Eastern Finland is a beautiful region with thousands of lakes. This region is fairly unknown to international markets, but Visit Finland are trying to better promote the area to international audiences and tap into this segment. When implementing such diversification in the tourism offering, it takes much more than simply marketing efforts, but also investing quite heavily in product development.
The same sort of products and stories don't attract diverse markets. For instance, German couples tend to have different preferences to a Japanese group of friends or an American family. Therefore, product development is important when attempting to attract new markets or segments, which of course has implications for the supply chain. Accessibility is an extremely important factor to consider. To be able to reach these new segments, Visit Finland has been working heavily on improving accessibility to reach the Lakeland region, and Finland in general.
Digitalisation is truly complex and it can be difficult to keep up with all of the latest developments. There are many different types of technology and lots of different channels, meaning that the digital ecosystem is always evolving. It can be challenging for travel businesses to stay informed. The larger companies with corporate structures have the knowledge and resources to implement digitalisation activities. However, it is much harder for smaller companies to enact similar projects.
The numerous SMEs prioritise creating fantastic travel experiences as their core competence. However, to remain successful in tourism, new competencies are required from companies in terms of travel technologies, such as reservation management systems, channel management and distribution channels as well as data analytics and sustainability development initiatives. All of these new competences are required for businesses to be competitive within the international tourism landscape.
Visit Finland recognises the importance of providing support to businesses for their digitalisation efforts, especially regarding digital sales and distribution as well as understanding how to grow business from international markets. It is a challenging area to work on since Visit Finland doesn't sell anything directly to visitors and aren't involved in the booking process. However, they have clearly identified the role that they can play in terms of helping companies to build the right capabilities and competence regarding travel technologies and knowledge about digital sales and distribution.
Understanding which tools represent the best opportunities in terms of return on investment and compatibility with operational systems is a complex decision-making process. Finland is a small market when it comes to travel and tourism. Nevertheless, when Visit Finland looked into the technological landscape of the reservation platforms used in the country, 20 to 25 different systems were identified.
When a small business owner starts looking into the different technological providers and decides which type of technology best suits their business and distribution needs, then they have almost 30 different options to review. This lack of consolidation within the markets and the variety of different tech companies and different aspects for businesses to consider is why Visit Finland see a strong need for them to support the tourism industry to understand the tech landscape.
Destinations are only as strong as their local businesses. Investing in incubator programmes can help small companies grow and become more competitive in the marketplace. SMEs, and particularly family-owned businesses, must not be overlooked as they are the backbone of the tourism industry and provide authentic experiences to visitors. The tourism sector also interlinks with many other economic sectors, such as the agricultural industry, which provides opportunities for developing relationships and connections between different types of businesses to serve the common goal of providing exceptional visitor experiences.
Collaboration, creating networks and building the appropriate infrastructure can raise awareness of SMEs and their quality product offerings. Sharing knowledge, supporting businesses and providing strategic direction can destination development. Providing assistance with data analysis and digitalisation is one aspect of this. With a constantly evolving digital ecosystem, companies find it hard to stay up to date with the latest trends and information. Through strong collaboration, all stakeholders within the destination can be supported along their innovation journey. Training and support helps to build the right capabilities and competences within businesses, enabling them to better invest in product development, diversify their tourism offerings and overcome any distribution challenges.
Championing local supply chains is founded on trust and creating opportunities for reciprocal trade. Businesses can create strong relationships and support each other in winning and delivering new contracts that they would otherwise be too small to compete for as single entities. This enables businesses to challenge the status quo of national distributors being prioritised over local suppliers. Investing in supply chains is a long-term commitment, but despite the potential risks, there is an appetite for change.
Cultural shifts are needed within organisations to enable them to be more agile and improve their ability to implement change management. This is especially crucial in times of global uncertainty; with rapid disruption to supply chains caused by COVID and Brexit. Deglobalisation and the desire for local suppliers have become increasingly important, adding value to visitor experiences and improving economic prosperity. However, innovation should move from being a reactionary consideration to external events and become more engrained within forward-looking organisational decision-making processes. The tourism sector should also be more outward looking and consider how innovations in different sectors, such as technology companies, can be applied and integrated into destination development initiatives.
The podcast is part of the Hospitality Innovation Tourism Supply (HITS) programme which provides targeted support, learning resources and grant funding to businesses in Northumberland, Newcastle and North Tyneside to help make their ideas a reality. The programme is funded by North of Tyne Combined Authority and delivered by NewcastleGateshead Initiative, Food and Drink North East and NBSL.
In episode 5 of our "Driving Place-Based Innovation" podcast series, in partnership with the NewcastleGateshead Initiative, we'll get a better understanding about how to champion local supply chains. Food and Drink North East talk about the North of Tyne BuySupply Platform and their partnership with the NewcastleGateshead Initiative supporting the Hospitality.Innovation.Tourism.Supply programme. Visit Finland also share the work they've done with regards to building a DataHub and the diversification of their tourism offer. These examples demonstrate how digitalisation can improve knowledge sharing and relationships along the supply chain.
You can listen to the episode here 👇
Food and Drink North East is a trade organisation that was set up in 2019 to support and celebrate the food and drink and hospitality sectors in North East England. The NewcastleGateshead Initiative focuses on the strategic approach to the visitor economy over the next decade in the Newcastle area and is involved in a destination development partnership pilot project with Food and Drink North East looking at how collaborative opportunities can maximise the potential of the visitor economy.
Food and Drink North East places the circular economy as a core value, which influences how they engage and work with their network. Having spent between three to four years reviewing the profile of the food and drinks industry in North East England prior to launching the company in 2019, it was clear that this sector was largely underperforming as a region when compared to neighbouring areas, such as Yorkshire and North West England. In terms of gross value added to the economy, food and drink production and manufacturing in North East England accounted for 2% when the company was founded, compared to 12% or 13% in the neighbouring regions.
With this in mind, Food and Drink North East was established to address the huge gap in terms of business support and strategic direction, and more crucially regarding fostering a better sense of identity and collaboration in the region. From this context, the organisation committed itself to focusing on the grassroots and spent a lot of time talking to businesses across the entire supply chain, including very small producers and big manufacturers. Food and Drink North East's mission focuses on developing a vibrant and engaged community and driving partnerships to build momentum in the development of the food and drinks sector.
Starting the company involved a lot of work to get people excited about the idea and to understand what can be achieved by having clear strategic goals as well as identifying the necessary resources to successfully implement this vision. This required big cultural changes in the way the food and drink industry operated and went beyond being just an economic development project. Food and Drink North East really needed to listen to people to understand what it was that they wanted and the gaps that they thought needed to be filled.
The essence of the work undertaken by the NewcastleGateshead Initiative and Food and Drink North East is to raise awareness of the North East of England's product offerings, to place the region on the map and change people's perceptions about the area. People who have visited North East England love their experiences and there are clear synergies between the ambitions of both organisations, which facilitated the creation of their partnership.
The Hospitality.Innovation.Tourism.Supply programme was a key outcome of the collaborative mindset of both organisations. By working together, this project enabled over 700 businesses to integrate their supply chain within the tourism sector and showcase the authenticity of the region through facilitating new relationships. These local producers also have a bigger platform to tell their own story about Newcastle and contribute to the diversity of the destination's offering.
The North East of England is at the bottom of the league tables for both international and domestic visitor numbers and working together with a clear vision is of extreme importance to display the strong characteristics of the region and show why people should visit. By working smarter and through maximising shared missions, the sector can collaborate by integrating the supply chain. For example, Food and Drink North East launched the North East Chef of the Year Award, and it's important to consider how to branch out to involve hotels and local colleges so that the industry collaborates around shared missions.
The North of Tyne BuySupply Platform is a really important initiative that is still in its very early days, but lots of thought has gone into its development and around the solution it's trying to provide. The food and drink industry as well as the hospitality industry are very entrepreneurial, with new businesses constantly emerging across the UK. It is a very concentrated and competitive marketplace. Taking a pro North East England perspective, it's often very difficult for a new business that hasn't got a great deal of experience outside of this region to enter new sales channels that are more national - or even international - in focus.
The vision for the platform was to create an ecosystem that was built on the terms of North East England's food and drink businesses. This arose from the consultation process and speaking to businesses about what they wanted and to enable local connections. There was a clear desire to focus on supply chains and for businesses to grow collaboratively together. As a case in point, there is a stark disconnect between local hotels and restaurants and the primary supply chain. The reasons for this are complex and not because of a lack of desire to source more locally. If small-scale local businesses aren't very visible or well-known, then companies tend to stick with the status quo in terms of which distributors or wholesalers they use. The North of Tyne BuySupply Platform aims to create an ecosystem whereby it was possible to build a more competitive marketplace by highlighting smaller organisations within the supply chain. Buyers are vetted and curated so that the profile of these buyers meet the needs of the network that has been built through the platform.
Another project being run by Food and Drink North East is an incubator for small businesses, helping to ensure that products are fully developed and ready for distribution directly to consumers. The incubator programme also helps businesses to understand how to make transactions easier. For instance, retail buyers get hundreds of applications each day about stocking new products, but only around 5% of them are ready to being stocked. The incubator programme helps small businesses go through a process to prove their product's credentials and ensure they have all of the certifications required and that the margins and other business administration has been fully considered.
Therefore, the North of Tyne BuySupply Platform creates an environment based upon trust and reciprocal trade. This brings real value by creating opportunities for suppliers to work together. For example, two suppliers can be facilitated to come together to fulfil an order for a hotel and ensure that supply chains remain local, as opposed to being awarded to a national distributor.
With visitors seeing local products from within a 20 mile radius, then they will feel more immersed within the destination. This will encourage additional visitor spending, since they will buy local products as gifts for their family and friends. They will also help promote and advocate for local businesses and suppliers by talking about their in-destination experiences and taking photos of different products, raising awareness of primary suppliers and boosting their marketing reach and ability to build their own reputation.
Involving and engaging more people within the local supply chain is crucial for destinations. The NewcastleGateshead Initiative is working across the entire supply chain, trying to make it as local as possible; not only with regards to traditional products, but also considering hotel amenities and the display of local artwork. While it's not possible to be 100% local and some products will still need to come from outside of the region, it is important to start the journey towards localisation and authenticity from a destination's supply chain perspective.
Innovation is subjective within the business landscape and is hard to pinpoint the full meaning of the word when engaging with a range of diverse businesses across the supply chain. There is a need to demystify the meaning of innovation because people tend to have a perception that innovative businesses focus on developing tangible solutions, such as new software or gadgets, which can frighten some smaller organisations. However, sometimes innovation is also about embedding a culture of agility and change management within a business, such as considering how to approach the recruitment and retention of staff in a different way. Having a subjective understanding that innovation is about every businesses doing something different and improving as an organisation is really critical.
Some businesses are frightened by talk about innovation, particularly at the extreme end of the spectrum of technological developments. Therefore, for some organisations, it's important to only talk about developing the destination. Some businesses are not afraid to experiment and will use any opportunity to maximise their potential to innovate. For example, Maldron Hotel's butler robot - which is implemented as part of their room service offer - helped increase the demand for room service by 17% because visitors wanted to see the robot knocking on the door. In fact, they were quite disappointed when a human brought their food and canceled their order since they didn't want the experience when their food wasn't delivered by a robot.
However, other businesses are further behind in their innovation process and still haven't moved their reservations from a guestbook onto being online. When supporting businesses as a Destination Management Organisation, it's important to also think about the different companies and where they are in their innovation journey. There's also a need to look outside of the visitor economy at the range of innovations currently being done in the tech sector and implement some of these within tourism businesses.
COVID created a situation where innovations were created out of a necessity. Businesses understood that they had new challenges in their operating environment and needed to focus on their supply chains due to the possibility of national shortages. Some businesses were forced to close, disrupting the traditional supply chains and delivery networks. Secondly, businesses became more aware of their carbon footprints and needed to look at their sustainability goals.
The global changes brought about by COVID created an innovation challenge and businesses need to think differently. In these circumstances, the innovation needed is about improving awareness about local products and taking the opportunity to consider micro level businesses. For example, Battlesteads Inn, located in Northumberland, applied their manufacturing model for their restaurant to bring their suppliers closer to them. For instance, they helped their butcher, which was 10 miles away, to buy a unit in the same village to receive the product quicker and have the freshest quality. This kind of innovative thinking from businesses to be adaptable and to have a menu that can change based on what ingredients can be sourced for that day, can bring a premium and help generate added value for visitors.
When looking at the hotel industry and the challenges they faced, it became less about maximising the total number of stays and more focused on improving margins. Changes in the national supply chain are putting additional pressure on businesses and their pricing structures. For example, restaurants started taking fish off of the menu because of the price increases, so it's important to consider how to get this produce locally. With a fish quay about 15 miles from the city centre, the infrastructure which can be used to innovate along supply chains is already in place.
With the reactive nature of innovation, there was a clear period during the COVID pandemic - and more recently with Brexit - where large changes to business operations were required. There has been deglobalisation within the supply chain and the idea that products will always be available is gradually being eroded. Consequently, there has been increased innovation within businesses, who are now more open to adopting new ideas and implementing changes within their organisational processes. However, interestingly, these companies think of these changes as being part of innovation, but instead refer to it as making progress. Businesses have learnt and realised that there is an opportunity to shorten supply chains and incubate businesses that ordinarily wouldn't have been big enough to service their contracts and who wouldn't have been able to grow.
Companies can now more clearly identify the opportunities available for innovation and the pathway to successfully making use of these opportunities. Businesses have a stronger appetite for change and have become more willing to take risks. Businesses need to move from their reactionary approach to innovation and their desire for a more agile culture to counter the shifts in the global environment towards actually embracing change and the different elements that this entails to create this new flexible culture within their organisation.
Visit Finland's main mandate is to build demand for Finland among international travellers. Visit Finland has a very strong development and support role for the Finnish travel industry, focusing on digitalisation, sustainable development and data management. Visit Finland's data strategy takes a holistic approach which not only builds demand and a desire for data-driven decision making, but also aims to improve the competence of industry stakeholders to support and develop their own data management tools.
When attempting to build demand for visiting Finland, it's also crucial to ensure that there is an appropriate level of supply. This is especially important considering the desire for sustainable destination development and the provision of sustainable products.
The digital ecosystem is very complex - with a wide range of different channels and content, using lots of different technologies. Therefore, travel businesses face challenges when distributing and managing their content, which becomes a resource-intensive activity. The Visit Finland DataHub aims solve this issue through its purpose as a digital content hub, helping to distribute the available content. This national content hub enables travel businesses to easily register, login, and then insert and manage their product.
The content on the DataHub platform is non-bookable, so there is no inventory or prices available, but it does allow marketing content to be stored. This means that the DataHub becomes a digital database. The DataHub has an open API which enables several different digital channels to retrieve and publish this data, streamlining content distribution and allowing employees to focus on other aspects of their businesses. The DataHub improves efficiency for local businesses to manage their data in a central database, from which content can be distributed through several different channels.
From the destination perspective, Visit Finland's own channels and regional and local DMOs can also utilise this data and retrieve the content through the API connection to showcase the products and services of businesses within the destinations they represent. This multiplies the reach of marketing activities, with little additional effort. Destinations should understand that developing great experiences is only one facet of managing their destination, but how they are packaged together and shared with target audiences is also key for ensuring products are discoverable and create and improve their brand image.
Destinations are only as good as the amalgamation of their local businesses. In Finland, there are many big travel industry chains and companies. However, SMEs, and particularly small family-owned businesses must not be overlooked. These small-scale experiences are the types that travellers want to find out about and enjoy. Big companies can support the tourism offer, but SMEs and micro-businesses are essential for providing unique and authentic Finnish experiences for visitors.
When considering the roles of different stakeholders within a destination, it is important to consider who is involved in packaging small and unique travel experiences or accommodation. Secondly, destinations need to fully understand the roles to be undertaken by their local and national DMOs in packaging and selling experiences.
Lapland is a region that is heavily reliant on the winter tourism season. Visit Finland is working together with different destinations in Lapland to extend the season and also to create new opportunities during the summer. The summer season in Lapland is equally as fantastic as the winter, but it requires a lot of effort to spread tourism out across the year. This is where the whole supply chain needs to work together, involving both the private and public sectors, to ensure the infrastructure is available.
The innovation involved in reducing a destination's seasonality doesn't happen overnight. It will not happen within a few years and it involves a long-term commitment from all of the stakeholders. Destinations need to make reducing seasonality a strategic priority, but also businesses must commit and invest in the overarching objectives since they are quite heavily exposed to the risks posed by innovation. If businesses change their operating models from only being open for half the year through the winter and working elsewhere during the summer, then they are clearly exposed to the risk if they decide to extend the tourism season and open their tourism business year-round. Therefore, taking a strategic approach to the innovation process to reduce seasonality requires mutual effort. This can help to make the destination more sustainable and boost economic prosperity.
The Lakeland region in mid-Eastern Finland is a beautiful region with thousands of lakes. This region is fairly unknown to international markets, but Visit Finland are trying to better promote the area to international audiences and tap into this segment. When implementing such diversification in the tourism offering, it takes much more than simply marketing efforts, but also investing quite heavily in product development.
The same sort of products and stories don't attract diverse markets. For instance, German couples tend to have different preferences to a Japanese group of friends or an American family. Therefore, product development is important when attempting to attract new markets or segments, which of course has implications for the supply chain. Accessibility is an extremely important factor to consider. To be able to reach these new segments, Visit Finland has been working heavily on improving accessibility to reach the Lakeland region, and Finland in general.
Digitalisation is truly complex and it can be difficult to keep up with all of the latest developments. There are many different types of technology and lots of different channels, meaning that the digital ecosystem is always evolving. It can be challenging for travel businesses to stay informed. The larger companies with corporate structures have the knowledge and resources to implement digitalisation activities. However, it is much harder for smaller companies to enact similar projects.
The numerous SMEs prioritise creating fantastic travel experiences as their core competence. However, to remain successful in tourism, new competencies are required from companies in terms of travel technologies, such as reservation management systems, channel management and distribution channels as well as data analytics and sustainability development initiatives. All of these new competences are required for businesses to be competitive within the international tourism landscape.
Visit Finland recognises the importance of providing support to businesses for their digitalisation efforts, especially regarding digital sales and distribution as well as understanding how to grow business from international markets. It is a challenging area to work on since Visit Finland doesn't sell anything directly to visitors and aren't involved in the booking process. However, they have clearly identified the role that they can play in terms of helping companies to build the right capabilities and competence regarding travel technologies and knowledge about digital sales and distribution.
Understanding which tools represent the best opportunities in terms of return on investment and compatibility with operational systems is a complex decision-making process. Finland is a small market when it comes to travel and tourism. Nevertheless, when Visit Finland looked into the technological landscape of the reservation platforms used in the country, 20 to 25 different systems were identified.
When a small business owner starts looking into the different technological providers and decides which type of technology best suits their business and distribution needs, then they have almost 30 different options to review. This lack of consolidation within the markets and the variety of different tech companies and different aspects for businesses to consider is why Visit Finland see a strong need for them to support the tourism industry to understand the tech landscape.
Destinations are only as strong as their local businesses. Investing in incubator programmes can help small companies grow and become more competitive in the marketplace. SMEs, and particularly family-owned businesses, must not be overlooked as they are the backbone of the tourism industry and provide authentic experiences to visitors. The tourism sector also interlinks with many other economic sectors, such as the agricultural industry, which provides opportunities for developing relationships and connections between different types of businesses to serve the common goal of providing exceptional visitor experiences.
Collaboration, creating networks and building the appropriate infrastructure can raise awareness of SMEs and their quality product offerings. Sharing knowledge, supporting businesses and providing strategic direction can destination development. Providing assistance with data analysis and digitalisation is one aspect of this. With a constantly evolving digital ecosystem, companies find it hard to stay up to date with the latest trends and information. Through strong collaboration, all stakeholders within the destination can be supported along their innovation journey. Training and support helps to build the right capabilities and competences within businesses, enabling them to better invest in product development, diversify their tourism offerings and overcome any distribution challenges.
Championing local supply chains is founded on trust and creating opportunities for reciprocal trade. Businesses can create strong relationships and support each other in winning and delivering new contracts that they would otherwise be too small to compete for as single entities. This enables businesses to challenge the status quo of national distributors being prioritised over local suppliers. Investing in supply chains is a long-term commitment, but despite the potential risks, there is an appetite for change.
Cultural shifts are needed within organisations to enable them to be more agile and improve their ability to implement change management. This is especially crucial in times of global uncertainty; with rapid disruption to supply chains caused by COVID and Brexit. Deglobalisation and the desire for local suppliers have become increasingly important, adding value to visitor experiences and improving economic prosperity. However, innovation should move from being a reactionary consideration to external events and become more engrained within forward-looking organisational decision-making processes. The tourism sector should also be more outward looking and consider how innovations in different sectors, such as technology companies, can be applied and integrated into destination development initiatives.
The podcast is part of the Hospitality Innovation Tourism Supply (HITS) programme which provides targeted support, learning resources and grant funding to businesses in Northumberland, Newcastle and North Tyneside to help make their ideas a reality. The programme is funded by North of Tyne Combined Authority and delivered by NewcastleGateshead Initiative, Food and Drink North East and NBSL.
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