The $50 billion tours and activities market is now seen as a business to business trade opportunity rather than a direct sell sector, according to one leading provider of specialist reservation systems technology.
Alex Bainbridge, founder and chief executive of TourCMS, told the annual WTM Small Fish Big Ocean evening that there had been a big change since the online community forum had started getting the sector together during the annual trade show five years ago.
“It’s been a complete shift from booking direct to booking by distribution,” he said. “Previously we were all thinking this is going to be a direct business which it’s not, it’s going to be an online travel agent business.”
Bainbridge was speaking during a panel debate with leading intermediaries in the tours and activities sector including Expedia, multi-day tours specialist TourRadar and TripAdvisor’s Viator.
TourRadar founder and chief executive Travis Pittman said its bookable API technology had helped the multi-day tour sector “come into the industry”. Eighteen months ago it brought tour provider G Adventures on to its platform. “We are seeing the big guys open their eyes and also reservation systems are helping the industry go forward with real time availability and booking.”
Griffin Hanbury, senior director global supply partnerships at Expedia Local Expert, said there needed to be significant steps taken to bring the sector online if companies like Expedia are to drive it forward. “Redemption is one of the biggest things that needs addressed,” he said.
The panel heard there remained huge issues to do with the automation of ticketing, with redemption and persuading consumers that they are better off buying upfront rather than waiting until they are in destination to buy from a concierge or a ticketing kiosk.
Ken Frohling, director of business development EMEA at Viator, said the biggest competitor for companies like his was people not taking a tour and retailers had to do a better job educating customers that they cannot wait to book because if they do the tour they want might sell out.
Leith Stevens, co-founder of Actourex, said the likelihood of advance bookings depended on the type of tour being sold, but that people increasingly expect to be able to buy on demand, like with taxi app Uber.
Pittman said: “It’s going to be very difficult to stop the activities booking window moving forward. Everyone is short of time. It’s going to get worse because people will get more spontaneous, they will want to ‘Uberise’ things.”
He added the multi-day tour sector did not have this problem with it being a more considered purchase, with people choosing where to go based on what they can do in destinations before going on to buy flights and hotel accommodation. This gives a longer lead in time than single day tours and activities.
Frohling said that for five years the sector has worked to persuade people that tours and activities is a viable segment of the travel industry and that Viator’s buyout by TripAdvisor had underlined it was an “interesting segment it is to play in”.
He said new technology connections has allowed real-time distribution and that the sector has become a much more open marketplace with intermediaries now listing multiple suppliers of competitive product, although he said Viator remains a highly curated marketplace.
“We have simply opened the gate to allow a lot more suppliers to come in,” he said. “Many suppliers wanted to be preferred vendors but ask anyone of them and they would be happy with what we have done. The best always rises to the top. Many suppliers have listed additional tours with us we never sold before.”
Griffin said: “Customers shop around. They look for different things and we want them to stick to our pages, to transact with us. We find by offering a greater diversity of supply it’s a better experience for the customer. They see a proper choice. Suppliers should not be worried about it. If you have a good product it should stand out.”
However, the panel agreed that tours suffered from a lack of quality content including imagery and video and this was vital if product is to stand out in a more competitive market.
Griffin added: “Suppliers are very good at telling me about what’s good about their tour, they are not that good at putting that in writing. We are not asking for anything spectacular. You really need to be thinking about the product and really selling the key points.”
Bainbridge said that quality was the biggest determinant of success today, not deals struck with distribution partners but that the sector currently does not have the tools to properly optimise content.
Stevens said tours and activities are not merchandised well online and mobile is a particular challenge no one has cracked in the way an app like Hotel Tonight has done in the hospitality sector.