The tours and activities sector is expected to see further growth online in 2019 as it battles continued growing pains linked to technology adoption and distribution data standards.
That’s the forecast from specialist booking platform Trekksoft in its annual Travel Trends Report.
In an overview of 2018 Olan O’Sullivan, chief executive of Trekksoft noted how big players like Booking Holdings, Google and Tui have made strides in the sector with significant investments.
He also picked out fundraising rounds for major online tours and activities marketplaces like Klook, which raised £200 million, as an indication of the potential of the fast-growing sector in Asia.
With Expedia “yet to make a big move” in the sector O’Sullivan predicts there could be further consolidation in 2019 with what the future holds for GetYourGuise “up for debate”.
“From the outside in, it looks like the industry is maturing and consolidation is happening as a result. But, as an insider, we feel that it’s far too early for that.
“In 2018, we’ve seen a number of marketplaces we are connected to match some of their more vaunted peers. We’ve seen merchants begin to understand the challenges a more multi-channel world presents for them, and start to take steps to invest in their future.
“Most excitingly we’ve seen the industry generate more online bookings than ever before which is just the tip of the iceberg.
“On the flip side, we also witness growing pains of the industry. We continue to see supplier inertia when is comes to adopting technology for their businesses. We also see underdeveloped distribution standards for API connection of online marketplaces and OTAs.”
Analysis of one million Trekksoft bookings revealed an increased use of agents and affiliates for bookings in 2018, with this group accounting for 24.3% of all business, up from 17.5% in 2017. Direct online bookings’ share fell from 79.2% to 66.7%. Marketplace bookings were up to 9.1% from just 3.2%.
Over 900 industry respondents to a survey conducted by Trekksoft for the report rated the importance of the various online marketplaces and agents to their businesses.
The usual suspects headed the list with Viator continuing to lead the way with 41% of the vote but in second place, ahead of Expedia and GetYourGuide, was Google Trips with 17%. Asked if businesses would consider becoming resellers themselves, 62.4% of respondents agreed.
The Trekksoft analysis also pointed to the value of human interaction in the sales process. In 2018, bookings involving a human, while only 17.8% of the total and down on 2017, represented 48.7% proportion of the revenue generated, up on 2017 (47.8%).
“Consumers spend more when they speak to a person when making a booking, whether this is a hotel concierge, your own sales person, your guides or a booking agent on a busy street.
“This pattern holds up even after adjusting both online and in-person revenue to take into account commissions paid out to online marketplaces (average of 25% commission) and in-person sales agents (average 30% commission),” the report states.
Swiss-based Trekksoft saw increased use of mobile for bookings in 2018 with the proportion hitting 56.7% after 2017 saw it break to 50% mark. However, desktop continued to dominate the revenue figures, with 65.8% attributed to the channel, down from 73.2%.
“To explain this we know from previous research that consumers tend to book and pay for expensive items first, such as flight tickets and accommodation. We also know the mobile booking experience still lags behind the desktop experience. This could lead to consumers doing their research on mobile, and later booking via desktop.”
The 2019 Travel Trends Report also looks at key markets like China and trends including modern family and solo travellers, influencers, mixed business and leisure travel (bleisure) and modular travel.
It also assess the impact of blockchain emerging technology like messaging apps and the demands of sustainability on the sector. In addition the report features interviews from leading OTAs Civitatis, Klook, Musement and TourRadar.
O’Sullivan added: “This is our most anticipated report as it offers a huge insight into the tours and activities sector, a sector where there is usually limited information available. This year we’ve gone even further into the booking data, key trends, and market insights, we’ve involved marketplaces and industry experts, and added invaluable survey results from over 900 operators.”
Stephanie Kutschera, head of marketing at TrekkSoft said, “We were overwhelmed with the volume of submissions to this survey which we shared with our customers, contacts and social media followers around the world.
“The collected data is extremely valuable for anyone working within the sector to see what are the new industry norms and the trends that we can expect to see in the next 12 months.
“We asked what trends our participants had noticed within their destination in the past three to six months.
“Last minute bookings came out on top with 39% reporting a strong increase and 22% said that there was a new nationality visiting their destination, predominantly driven by Chinese market. Knowing these trends will allow operators to plan and prepare for the year ahead.
“As there isn’t a lot of industry specific data, we also asked about our participants businesses. We found that over 50% of tour and activity companies have up to 5 employees, which we would expect, but 15% have over 20 employees. For the sector that is very strong.”