Tours and activities providers should be more wary of Uber entering their space than Airbnb which is poised to make an announcement within weeks, the annual Small Fish Big Ocean World Travel Market event heard.
Uber recently closed its City Hosts experiences online ‘shop’ but a message on its website tells visitors to “look out for something big soon”. The peer-to-peer accommodation platform has made some significant acquisitions in the tours sector and its most recent advertising campaign has sought to disparage conventional tourist attractions compared to its ‘live like a local’ experiences.
Alex Bainbridge, chief executive office at TourCMS, who described Airbnb was now the world’s fourth biggest OTA in terms of room nights sold, said it could make a significant impact in the sector. But he said it was not all bad news.
Bainbridge told the audience of tour operators, aggregators and OTAs that asset owning tour firms had an innate advantage over new entrants in the peer to peer economy.
“One of the main things is that tours need assets. Across TourCMS the top selling category is actually the transport to get people to an attraction. Without assets companies like Airbnb will really struggle, so if you are an asset-based tour operator don’t panic.”
Bainbridge added that as professional companies tour firms are also able to drive the volumes that mean they can build deeper relationships with suppliers in a way an individual host in the sharing economy won’t be able to. He said tours need access and it is volume and relationships that unlock this.
However, he warned: “Keep an eye on Uber. They do have assets. I would be more worried about them than Airbnb.”
Bainbridge said the OTAs had switched their tours and activities model in
recent months in reaction to the backlash against activities that involve
animals like elephant riding.
However, he said this means they will have to become curators again having only last year moved to an aggregator model whereby they added as many tours as they could to cover the entire market.
Bainbridge said this poses a challenge for the OTAs. “How are they going to make a decision about which is a valid animal tour and which is not? OTAs are going to have think of a solution.
“Each OTA is going to have to invent their own method. I’m actually proposing we have a standard here. We need to work out how to adjudicate what is an animal tour. That requires a lot more product experts than exists in these large organisations.
“If they are going to become curated they are going to have to trust someone to say this is a good tour or not.”
Another shift in OTA strategy is to try to sell to travellers in destination rather than see tours and activities as an upsell add-on for a client who has already bought a flight and or hotel stay.
This requires a switch in the model that requires a focus on mobile and all the challenges around ticket retailing, redemption and reconciliation that entails.
“It used to be skip the line, now they are marketing to people in the live,” said Bainbridge.