00:00:17: Welcome to ITB Berlin's travel hero podcast where we explore ideas and shifts shaping the future of global travel.

00:00:25: Today's episode is titled the future of high-yield tourism and we are joined by Jens Trenhardt, Chief Executive Officer at Chameleon Strategies.

00:00:35: Jens, a very warm welcome to you.

00:00:38: Thank you Charlotte.

00:00:40: It's a pleasure to be on your podcast today.

00:00:42: Thank you very much for joining us.

00:00:44: I very much enjoyed our little chat last week as we prepared for the recording today.

00:00:50: But before we dive into our topic, I would love for you to brief us a little bit about your work at Chameleon Strategies, please.

00:00:59: Thank you Charlotte.

00:01:00: So I mean Chameleon Strategies started in nineteen ninety nine.

00:01:03: So we've been around for a little while, but we're a a network of professionals, mostly in the tourism destination space, but also a few people that worked in hotels.

00:01:14: And we are really passionate to help destinations to look at the crossroads of probably three things.

00:01:21: High-yield tourism, passion-driven travel, sustainability, and the emergence of digital tools from AI to social to data.

00:01:31: Right now, I'm the advisor at the Saudi Tourism Authority.

00:01:36: I've also been the Executive Director, CEO of Mekong Tourism in Southeast Asia, which is regional tourism collaboration of six countries, Cambodia, Laos, Myanmar, Thailand, Vietnam, and China.

00:01:49: And then before joining the Saudi Tourism Authority, I was a CEO of Barbados.

00:01:54: tourism marketing in the Caribbean.

00:01:57: And then having done, you know, consulting various destinations, you know, including Mongolia, but even even North Korea over ten years ago.

00:02:05: You know, I'd love the destination space and the opportunities tourism can bring.

00:02:09: I've done my doctorate degree at Hong Kong Polytech.

00:02:12: And so I love to kind of look at the practitioner side, but also kind of merging it with the academic rigor that goes with it.

00:02:20: When you hear the term high-yield tourism, what does it actually mean to you?

00:02:24: I mean, beyond one could think the assumption of wealthy travelers.

00:02:29: Yes, it's interesting.

00:02:31: I mean, many people and maybe mistake term high-yield was high value.

00:02:36: And we look at it actually differently.

00:02:39: We have our own podcast, the high-yield tourism podcast, and people can check out.

00:02:43: We have our LinkedIn page or if you go to highyieldtourism.com.

00:02:45: But to your point, I think it is not about people that are just a luxury traveler.

00:02:52: And that's what people many times think.

00:02:53: It's just about, you know, the wealthy traveling and staying in five-star hotels and spending a lot of money.

00:03:01: Obviously, you know, spending is part of it, but it's around staying longer, you know, kind of creating local engagements and really driving economic benefits to the local communities and the local residents.

00:03:15: So we look at it in terms of three dimensions, economic, which is really the revenue per visitor, length of stay, spending with local business, as I said, and also that the cost that serves that visitor.

00:03:27: So, I mean, sometimes the cost is actually forgotten, right?

00:03:31: I mean, like, you know, if people come into a destination, you know, there is a cost to it.

00:03:36: And if that cost is greater than the benefit, you know, the money.

00:03:42: that actually stays in the destination.

00:03:44: And we're not just talking about the revenue, but really reducing the leakage factor, then it could be negative.

00:03:50: So that's why we can't develop this term of the tourism EBITDA and really looking at omit tourism for a balance sheet standpoint.

00:03:57: Then social, our visitors building pride and skills and opportunities for local people and not just using the place as a backdrop for photos.

00:04:08: And then the third part is environmental.

00:04:11: Does the visit actually help protect the nature and the heritage?

00:04:18: Does it just add pressure?

00:04:19: And we've seen that, you know, when people are pushing back.

00:04:22: The topic itself, high-yield tourism, is very much in the conversation at the moment.

00:04:27: Why do you feel that is?

00:04:30: I mean, what is, what is really, maybe you can tell us a little bit about the trends and the shifts here, because what's pushing some destinations to rethink the more, shall we say, traditional, maybe volume-based?

00:04:43: Model.

00:04:44: you know this whole shift from volume to value is key, but again, I mean like you know, I've worked for governments and tourism destinations, even as CEO, and you see the pressure that is really still on volume, right?

00:04:57: How many arrivals did we drive?

00:04:59: Do we have a growth?

00:05:00: What's the growth per month per year?

00:05:03: And that's still how these narratives are being shaped and how success is being measured.

00:05:08: But why is high-yield tourism a key topic now?

00:05:11: Well, you know, we see many destinations have hit that limit.

00:05:15: of the volume model and then we see congestion we can see leakage and we see resident backlash and that's why i think it is becoming a key topic.

00:05:25: people also.

00:05:26: destinations are also shifting as they see that.

00:05:29: well you know more is not necessarily more you know.

00:05:33: and how do we get people to spend more money.

00:05:35: you know so spend is becoming a bigger kpi now.

00:05:39: but i would say you know when it comes to high yield it's not just about more spend it's also how much of that spend is retained by the destination.

00:05:48: and then looking at i said before this is tourism ebita where we also bring in the cost of tourism for that destination.

00:05:56: right you know if it is garbage removal if it's sanitation if it's a you know, all these kind of things that many people don't talk about in driving that infrastructure.

00:06:05: So the tourism shocks, if it's weather, health, geopolitics, show that resilience comes from deeper value, not more people.

00:06:15: And I think that's why, you know, people are waking up when people get on the streets and say like, you know what, we don't want tourists here, go home.

00:06:22: And then sometimes politicians wake up because in the end, you know, tourism is a means to an end, you know, in the end, from a political standpoint, it's supposed to drive votes, right?

00:06:33: So if my voter goes on the street and say, like, well, I'm not happy, then as a politician, I wake up and I think that's when we see the change.

00:06:41: I love tourism because I think, you know, tourism is a force for good or can be a force for good, you know, where really people kind of, you know, have that, find that mutual understanding.

00:06:53: You know, it's like, you know, and learn about different cultures.

00:06:56: And in a world right now where media is highly influenced by political agendas, I think traveling helps us to connect with people.

00:07:05: And I think that's why it is so important to make sure that tourism stays authentic, that people connect with local communities, and that tourism is actually driving value and economic benefits.

00:07:19: then just backdrops for Instagram shots or TikTok reels.

00:07:24: Maybe we could talk a little bit about those who benefit the most from this high-yield tourism approach because you have already alluded to the fact that we need to look after the local communities.

00:07:36: There are the destinations themselves.

00:07:38: Some are overcrowded, some are less crowded.

00:07:40: We want to push people into new areas that are less crowded to give some of local residents a little bit of a break as well.

00:07:49: But maybe some people will worry that it's mostly just the private sector.

00:07:53: and the operators that benefit from this.

00:07:55: But I think you're going to tell us hopefully otherwise.

00:07:58: No, I mean, I completely agree with you, Charlotte.

00:08:01: I mean, I think this is why I launched this blog, Balanced Tourism over a year ago, to kind of express my thoughts in terms of that.

00:08:08: it is about balance, right?

00:08:10: I think in the end, where tourism goes wrong is when greed takes over.

00:08:14: you know and i think in any such as tourism i think greed is the evil of humanity and not to get too philosophical here.

00:08:23: but when it comes to a high-yield tourism we've identified this what we call the high-value trap right where you know building luxury attracting wealthy guests assuming that there are community benefits but in the end we see the opposite.

00:08:39: that's happening.

00:08:40: and luxury resorts where ninety percent of revenue leaves the country visitors that you know maybe stay three nights leave nothing behind except the credit card receipt.

00:08:51: you know that's where where we get problems.

00:08:54: at the same time the destination face these rising costs social pressure environmental limits.

00:09:01: so the question is shifting from How do we get more people to?

00:09:05: How do we get better outcomes?

00:09:07: I'll give you an interesting example, which really made it very clear to me.

00:09:12: I was invited by the former president of Mongolia and former minister of tourism and the environment of Mongolia to visit and talk to the new governor of one of the provinces in the Gobi Desert.

00:09:25: and I went there and I mean it was actually in December.

00:09:27: it was freezing cold but we did go outside.

00:09:31: I mean you look up in the sky and it's amazing.

00:09:33: I mean you know the stars are so clear and you have.

00:09:38: what he told me then is we have a lot of people from Korea and Japan China that come and but there is no infrastructure as being built.

00:09:46: you know there is no restaurants no hotels and so on.

00:09:49: so people go there they go into the desert and they leave the trash.

00:09:53: And he said well tourism becomes an expense because now we need to remove the garbage But there's no income that's coming in right.

00:10:00: and many of these people they come you know Day travelers and so and so.

00:10:04: so I think again There's an opportunity here.

00:10:08: this whole thing around let's say passion travel.

00:10:10: You know, it's like okay stargazers.

00:10:12: they travel from Finland to Chile to Sedona to Saudi Arabia Alula, you know and also to places like the Gobi Desert.

00:10:19: So you kind of identify the strengths.

00:10:22: I created this sewer model or adapted a fifteen year old business framework called the sewer model.

00:10:27: Strengths, opportunities, aspirations and results.

00:10:30: So you identify the strengths, dark sky, which can drive, you know, stargazing or dark sky tourism.

00:10:37: Then the opportunities while creating the infrastructure.

00:10:41: Finland has created these glass iglo where you spend two thousand dollars a night to kind of sleep under the skies.

00:10:48: Actually, I just saw an article that now Finland actually launched an Arctic train.

00:10:53: I'm not sure if you've seen that and you can actually go through Finland and you can see the sky from the train.

00:11:02: So it's building these opportunities that kind of leveraging the strengths and then the aspiration.

00:11:08: Yes, we want to be one of the top dark sky tourism destinations in the world.

00:11:13: And then you look at the results at the end, you know, kind of not just measuring the visits and even the spend, but going beyond that, how can it actually drive positioning?

00:11:22: How can it drive economic benefits and so on?

00:11:25: I thought it might be a good idea or a good time to also talk a little bit about the Middle East, because obviously we're seeing massive tourism investment, particularly in Saudi Arabia, but also in the UAE.

00:11:37: So how to your mind does high yield tourism play into these very long term and well thought out, I believe, strategies from those countries.

00:11:48: Yeah, I think Saudi Arabia is an amazing destination and I'm so fortunate to being allowed to witness that as an advisor to the Saudi tourism authority.

00:11:58: There are a couple of components.

00:12:00: And I just recently talked to the minister of exit team and he said, well, you know, this is the place to be.

00:12:06: This is where it's happening.

00:12:07: And it's truly the case.

00:12:08: I mean, but from two angles.

00:12:10: On one hand, we're seeing the investments into these Giga projects and Neom, Red Sea, Global, then there is FIFA coming in twenty thirty four, Expo twenty thirty.

00:12:21: So a lot of things that are happening in Saudi Arabia.

00:12:24: to build tourism.

00:12:25: It takes time, but the results that they're getting in really having opened up the country just six years ago, there was no Saudi tourism authority before, and it's amazing to see what they have been able to achieve in creating these new destinations.

00:12:44: I mean, people hear about the Giga projects, but if you go to places like If you go to places like Taif and Assiyan, Al-Bahaa, Jeddah, Al-Balati, the historic center there.

00:12:56: It's amazing the authenticity that you can see because Saudi Arabia is different than the UAE and especially Dubai.

00:13:04: You can really feel the true Arabian heritage there and seeing the transformation.

00:13:11: I've been the first time to Saudi Arabia in twenty ten when it was a completely different country and now seeing how it's opening up.

00:13:18: And it's real.

00:13:18: I mean, this authenticity in what they call half power, the Saudi power, the generosity, the hospitality.

00:13:26: the welcome, you see that.

00:13:28: And it's a truly amazing experience.

00:13:30: Now, would I say Saudi is developed yet?

00:13:32: No, it really takes time still to develop that infrastructure, but what is there already?

00:13:38: And sometimes maybe you say, like, well, I want to go now because maybe, you know, in ten years, you know, it is too developed for me.

00:13:44: Who knows?

00:13:45: It is a great place to visit.

00:13:46: But then there is another component, which is overlooked right now.

00:13:50: And that's the Saudi outbound traveler, which is truly a high yield market, as we're talking about high yield tourism.

00:13:56: These people, they start to travel outside now.

00:13:59: They've always traveled outside, but there was limited air connectivity.

00:14:02: They had to go through Dubai and Abu Dhabi.

00:14:05: Now they are direct connections.

00:14:07: And that air connectivity is increasing, rapidly increasing.

00:14:11: That means that these travelers can now go to places that you know maybe weren't accessible before.

00:14:17: they have now new bilateral relationships that allows them maybe you know easier visa access to go there.

00:14:24: so they're going still to Turkey and they're going to Egypt and they're going to the UAE.

00:14:29: but I think the real growth will happen in the new emerging destinations from Southeast Asia, European cities, Central Asia, you know, South Africa, and probably at some point, even when the air connectivity is stronger, you know, South America and other destinations, the Saudi traveler is different than the other GCC or Middle Eastern travelers.

00:14:49: And that's shaped by vision.

00:14:53: What these travelers are seeing in Saudi Arabia, you know, with these projects, with these high-end resorts and not just high-end resorts, innovative tourism experiences, if you go to, you know, Riyadh Boulevard and these kind of experiences, you know, these expectations, what they see inside their country are now shaping their expectations, you know, outside their country.

00:15:15: I just launched a new service, you know, SaudiOutbound.com, where we're kind of helping destinations to, you know, learn to understand the Saudi traveler, to attract them and also to host them, you know, when it comes to social media, they're using social media differently.

00:15:30: Snapchat is still a very dominant social media platform, which, you know, in the West, we don't really use Snapchat anymore.

00:15:37: It surprised me.

00:15:38: So again, it's a truly high yield market because these people stay longer, nine point six days on average, and sometimes even more.

00:15:47: They do want to connect to these local communities.

00:15:52: They want to have authentic experiences.

00:15:54: I just accompanied a group of high potential managers from the Saudi tourism authority going to Thailand, together with the Pacific Asia Travel Association Pata and the tourism authority of Thailand, TAT, to have them learn around, you know, how Thailand has shaped over the last whatever forty years in ups and downs with you know political term lie to floods and so on and times a very resilient destination.

00:16:21: so a lot of learnings for Saudi Arabia.

00:16:24: you know in Thailand I could witness these Saudi travelers when it was interesting around.

00:16:29: it is actually seventy percent of the Saudi populations under the age of thirty five.

00:16:34: you know and that kind of shapes a whole different behavior what these people are expecting.

00:16:40: How they also look at research and booking.

00:16:43: It is online.

00:16:45: So lots of learnings around that, but it's a truly high yield outbound market that at this point it's still very much overlooked and misunderstood.

00:16:54: Let's talk about destinations.

00:16:56: considering the sort of the high yield model.

00:16:59: Where in your opinion should they realistically start?

00:17:05: What's step one?

00:17:05: Step one would be doing an audit and saying, well, where does the money actually go?

00:17:11: They may say, well, we're doing great.

00:17:15: Talk probably to tourism ministers and see of tourism boards every time and they tell you we're doing amazing.

00:17:21: we're just gonna increase our rival numbers by x percent.

00:17:24: we're seeing growth but have they actually stepped back and did an audit and seeing like?

00:17:29: well you know where is this money actually going?

00:17:32: who are the people that are coming?

00:17:33: are we.

00:17:34: dependent on source markets?

00:17:37: or are there maybe other source markets that might be more lucrative, that want to connect to the culture of the destination, that want to do good instead of just staying in an all-inclusive resort.

00:17:49: And nothing wrong with all-inclusive resorts.

00:17:51: It is what it is.

00:17:52: It's part of the tourism ecosystem.

00:17:55: Are they actually driving economic benefits?

00:17:58: You know, maybe at some point they do.

00:18:01: And again, you know, mass tourism has its place.

00:18:05: But again, doing an audit and stepping back, I think I would say is the first step.

00:18:10: Understanding really the blueprint of how their tourism functions and operates.

00:18:17: And that's different from destination to destination.

00:18:20: As we sort of slowly begin to wrap up, what would you say is one guiding principle that you believe destinations should sort of keep in mind when, yeah, I want to say rethinking the tourism value and indeed taking into consideration the mix of visitors?

00:18:38: Yeah, I think that the key question is why are we doing tourism?

00:18:43: And many people don't ask that question.

00:18:46: And then really saying like, well, who benefits from tourism?

00:18:50: Maybe tourism should be done different or maybe that tourism that we're doing is actually not creating benefits.

00:18:56: So looking at the communities how are they benefiting?

00:19:00: through that local spending those longer stays and this skill transfer as well the governments are they benefiting through these stronger margins and more stable tax revenues and less pressure on infrastructure?

00:19:14: and the businesses?

00:19:15: are they benefiting through more loyal customers reduce dependencies on mass market price wars?

00:19:21: and really is tourism yield growing when benefits are shared.

00:19:27: and not just concentrated on a few people and not all people.

00:19:32: When it's done right, I believe everyone should benefit.

00:19:35: Communities should see income that stays local.

00:19:39: Governments should gain these stronger tax revenues and stability.

00:19:43: And businesses should benefit from purpose-driven guests that are not just there for a price-driven volume narrative.

00:19:54: landing on the responsible, sustainable, high-yield tourism strategy.

00:19:59: That is kind of where I personally very much have been coming from when I'm looking into this particular area.

00:20:05: And many are doing indeed a very good job.

00:20:08: Yes, sadly our time is up, but thank you for sharing your insights and experience with us.

00:20:14: It's been an absolute pleasure having you today.

00:20:16: Thank you Charlotte.

00:20:17: Pleasure was all mine and hope we can continue the conversation maybe when we meet face to face in Berlin at ITB or another podcast.

00:20:25: I know we've been connected for a while but I think we've never met.

00:20:28: face-to-face.

00:20:29: I think we did meet a few years ago but for sure we will see each other in March at the ITV Berlin Convention.

00:20:35: If I don't meet you in the Gobi Desert first of course that is.

00:20:38: Thanks again Jens, it's been my pleasure having you today and to our listeners.

00:20:43: thank you very much for joining this rather quick but important conversation.

00:20:47: on the future of high-yield tourism.

00:20:49: We'll be back soon with more voices and perspectives shaping worldwide travel.

00:20:55: Only here, of course, at the ITB Berlin Travel Hero podcast.

00:20:59: Follow us online.

00:21:00: Thanks for listening and safe travels.