In-resort services – The destination product gold rush

A new marketplace has emerged and grown quickly in recent years. It seems the activities online brokerage is an exciting place to be. Martin Cowen finds out more


What the travelling public wants from its leisure travel experience has moved beyond fly and flop into the realm of photography tours and forest safaris. The pleasure is no longer in the journey, as if it ever was, but in the destination.


The internet has made getting from A to B so easy, travelling itself is a commodity, no matter how up-to-date the in-flight movies are.


Hotels that no one has ever heard of are, well, unheard of, so to differentiate your dinner-party small talk or Facebook entries, why not make sure you’ve got your chocolate and pastry tour of Paris booked up in advance?


‘The things you do when you get there’ element of a trip sounds like a great strapline for the experiences, attractions and activities sector. One of the sector’s leading players, Viator, used it for a while until it found out that while people in the business knew what it meant, consumers didn’t.


Rod Cuthbert, founder and chairman of Viator, says: “Tragically, ‘things you do when you get there’ didn’t have the same resonance for consumers as for people in the trade…” It now operates under the functional service mark ‘Unforgettable tours and experiences. Unbeatable deals’  Viator, for any classicists reading, is Latin for ‘to travel’.


Dosomethingdifferent.com commercial director, Ian Coyle, has found that “the name does a lot of the explaining”, as he and his team take the concept to independent high-street travel agents in the UK.


Dosomethingdifferent.com is a relative newcomer in the sector. It’s part of Oliver Brendon’s ATD Travel Services, and launched in September 2006, more than a decade after Viator launched in Australia.


Only in online travel can someone with 10 years’ experience be referred to as a veteran. “We were the first to do this,” Cuthbert states. And as the demand from customers for activities increased, Cuthbert was well-placed to see that like other components of the holiday, direct bookings were the way ahead. Not supplier direct as such, but aggregator direct.


Using proprietary systems, he found a way to help small businesses connect to a global marketplace. Cuthbert understands that the people running boat tours in Sydney Harbour are experts in running boat tours in Sydney Harbour, not XML. “We can aggregate a lot of small suppliers,” he says. Commercial terms range from wholesale agreements to free sale.


Viator.com took a while to find its consumer-facing feet. It relaunched in 2006, and now 75% of its business comes through viator.com, the balance through the thousand or so third parties and affiliates partners it has. “No matter how much we develop the partner business it’s not as quick as direct,” Cuthbert says.


This April, easyJet signed Viator as its preferred destination activity supplier in more than 50 markets throughout Europe and Northern Africa. Meanwhile, another big European airline – Ryanair – signed up a different partner for its activities channel, Isango!


Isango! was launched by former Ebookers.com executive Ranjan Singh a month after Dosomethingdifferent.com. Its business currently is slightly more B2C than B2B, with some direct customers buying $7,000-worth of activities in a single purchase. The deal was an extension of an earlier tie-up. Singh says the Ryanair link-up was a big part of its B2B business already and was set to increase as the airline expanded. “We work closely on a daily basis to make the most of the tie-up for both partners,” he says.


While easyJet may have the edge in terms of going to places you’ve actually heard of, Singh is undeterred by Ryanair’s preference for secondary airports.


“Most Ryanair passengers end up in a major city, and we can slice and dice our database accordingly,” he says.


So, no need for Isango! to go out and source specific content for Brno then. Perhaps a guided tour of the Czech town’s impressive array of art nouveau, early modernist and functionalist architecture is too much of a tug on the Long Tail.


There is a desire for specific content, as shown when Viator bought Las Vegas-based LookTours in 2006, picking up 1,500 activities and a call centre to boot.


Cuthbert admits that Viator was “on the look-out for something similar in Europe, a destination specialist, close to suppliers”. At the time of writing, Cuthbert says that it is talking to “a small player in Europe”.


Dosomethingdifferent.com is also interested in specific content. Coyle says UK agents wanted more short-haul content, hence the recent ramp-up in activities in mainland Spain, the Balearics and Tenerife. “We could have gone out and contracted worldwide, but we decided our partners would define our priorities.”


Coyle has already signed up Global, Worldchoice, TTA and Elite to its dedicated white-label solution for agents. He wants the business to be active in all B2B and B2C channels. It has gone live on Affiliate Window, and is looking at selling in a solution for online travel agents.


But the big boys cannot fail to have noticed that the experiences sector is about as fragmented as it comes. In Viator’s early days, Expedia, Orbitz and Travelocity were partners, “until they realised how much money was in it and took it in-house,” Cuthbert observes.


Fast-forward a few years and activities has become a “significant business” for Expedia. Jonny Cudworth, head of product marketing for its European markets, says: “We’ve got a similar range of product [to the specialists] but aren’t known for it.”


And that product range is about to expand on the back of the sheer scale that being part of Expedia Inc can offer. Cudworth says the direct contracting for its activity product is carried out by the Partner Services Group team, which is picking up local contacts while negotiating hotel rates.


Adding more hotel content across all of Expedia Inc is a key focus for the business. CEO Dara Khosrowshahi told analysts that it was employing more market managers in Europe to retain and attract new properties in the region.


And in the first quarter of this year it signed up twice as many European hotels on a merchant basis than it did in the last quarter of 2007.


Expedia connects with its activity suppliers in a range of ways, from browser-based connectivity to its extranet if the supplier is set up, by fax if it isn’t.


Not many activities get shifted on a stand-alone basis – what Expedia offers suppliers is an automatic inclusion in a booking path once the seat and bed have been booked.


However, Cudworth has noticed a trend that is seeing a lot of packages built around the activity. Expedia has access to Formula1 tickets, for example, and a rising number of people are coming to the site to book, then buying their flight and hotel around the day of the big race.


Another big, global player is Gullivers Travel Associates, also known as ‘GTA by Travelport’.


“Most of our business is hotel-generated, with the destination activity added as an option,” says Chris Illingworth, manager, FIT Destination Services. GTA operates a similar model to the specialists – manually loading content on to its systems for distribution through a number of channels.


It supplies the product to Galileo Leisure, with its biggest consumer channel through OctopusTravel.com.


Like Expedia, GTA can offer suppliers global distribution.


Illingworth says: “We’ve got 31 sales offices worldwide and we want to piggyback an inbound business on to the sales function.” GTA has a history of bringing groups from Asia-Pacific into Europe, and is poised to exploit travellers going the other way. Intra-Asia business is also set to increase, he says.


While Expedia seems content to try to convert existing bookers, the specialists are looking at ways to ensure that consumers know about their brand. Blogs, unique content and photos are a given for all three as a way of appearing high up in the natural search rankings.


“We’d like to attract business from natural search,” says Viator’s Cuthbert, “but we’re happy to go out and pay to get a first-time customer.”


Viator currently has 50,000 keywords in its pay-per-click campaign. Keyword inflation is an issue for the sector, although Cuthbert says it wasn’t at the same level as in other parts of the travel business.


And while the controversy over branded trademark bidding continues, Cuthbert suggests most of its small suppliers are happy for Viator to use their brand names in its campaign because they were unlikely to be using it themselves.


The growth potential in this sector is huge, given number of people travelling and their changing demands. And with a fragmented supplier base, aggregation through a central system seems a reasonable model. Competition is seen as a good thing by all concerned.


Isango’s Singh says that a market is being created. “Five years ago, no one was buying insurance through price- comparison sites. Now, it’s a matter of course. In activities, we’re all building market share by changing consumer behaviour.”



The OTA perspective


Lastminute.com claims it is not just a travel agency, so one would imagine that tours, activities and events would form a big part of its business. They do, but it’s more Lion King than lion safaris.


The OTA uses a white-label version of Viator. UK managing director John Bevan says it is working closely to rework the partnership, with the ultimate aim of offering the Viator content within the booking path, alongside other extras such as insurance, carbon offsetting and airport lounges.


Bevan is quick to point out that lastminute.com isn’t “just about where our customers go on holiday, it’s about what they are going to do at the weekend”.


The scale of this business is often overlooked, despite the fact that one in 10 London theatre tickets is booked through lastminute.com. Bevan also says that the repeat business from restaurant bookings is “phenomenal”.

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