WTM 2017: Iceland leads the way in unfreezing online distribution of tours and activities

Cross-selling by local partners now largest sales channel, says Bokun Continue reading →

Digitisation is enabling much greater reach in the distribution of tours and activities, with  operators in Iceland are leading the way, delegates at last week’s World Travel Market heard.

Online marketplace Bokun says cross-selling by local partners has become the largest sales channel as tour operators take advantage of web connectivity.

Hjalti Baldursson, chief executive of Bokun, said online bookings have gone from virtually non-existent a few years ago to 83% last year.

And he said suppliers are becoming sellers with 65% having active cross-selling contracts to sell each other’s tours in the marketplace with some even collaborating to offer bundled combo-tours.

Today 50% of all product on the Bokun platform is combined with another suppliers product and this is growing.

“Firms can be both supplier and seller and earn commission selling other people’s products. Our customers have started experimenting with combo tours and generating a new revenue stream.

“A few years ago online bookings did not exist, almost all were through an agent or direct in destination. So the distribution landscape is changing very fast,” said Baldursson.

Operators in Iceland can now expect around a third of business to come to it direct, but they are also able to tap into partners’ like airlines, hotels, travel agents and bloggers who act as resellers.

Bokun has created a product aimed specifically at hoteliers called Store Front which is a website on which they can promote tours and monetise their relationships with guests.

“Suppliers want their products to be visible everywhere,” said Baldursson. “It’s very easy to collaborate with supplies and resellers if everyone is online and connected.

“The difference between Iceland and most other regions [of the world] is everybody is online and connected.

“That means the product offering is greater in Iceland because it’s so easy to create new product. It means visibility of product is better.

“It means tourists are easily able to find the tour or product or attraction that they like and that means tourists go home more happy and promote the country.”

Stefano Zeni, head of commercial management and destinations services at Hotelbeds-owned B2B wholesaler GTA, said:

“Tours and activities are the differentiator for our customers. It was also the fastest-growing segment in the last year.

“There are some challenges, some technology gaps. Lots of local operators supply is pretty much fragmented. But technology is the solution for this segment to keep growing.”

Zeni said GTA would traditionally develop its own technology in-house but he said innovation has changed the way it develops to working with third parties like Bokun.

“We went out to tender, talked to some IT providers and took six months to choose Bokun as preferred partner for tours and activities.

“We feel we are going to fill some of the gaps in technology. Innovation has changed the way we develop technology at GTA. Our vision is to make distribution easy for partners.

“We want to change the way GTA is perceived, not just as a global online distributor but we would also like to be an IT provider giving solutions to our partners to grow the business together.”

GTA has 58,000 hotel contracts and works with 16,500 tours, activities and transfer suppliers in 1,000 destinations. It distributes to over 50,000 clients in over 130 countries.