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Posted October 9, 2017

online travel booking

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How much is spent on tours and activities each year? Estimates range from US $135 billion to $200 billion. Cited as the third largest travel sector, this group is less a clearly defined sector and more a massive group that includes a handful of large companies and countless small ones.

While online bookings are exploding in other sectors, Phocuswright’s Tours & Activities Come of Age: The Global Activities Marketplace 2014-2020 report states that “more than 80% of bookings remain offline.”  With incredible potential for growth much is happening to increase that rate.

Not the same as booking a hotel

Tourism Intelligence Network notes that consumers can easily compare products and costs for hotel rooms, flights or car rentals. But, not the tour and activities group since many services have unique features. Another challenge for this sector is that it is comprised of hundreds of thousands of small suppliers. In fact, more than half of them generate less than $250,000 annual revenue.

Yet, the challenges in this area haven’t deterred some of the online travel industry’s largest brands from focusing resources in this space.

  • Airbnb launched its Trips platform last year, offering unique experiences, tours and activities in 12 cities.
  • Expedia recently announced that it was extending its member pricing to include the Things to Do booking section of it’s website.
  • TripAdvisor, whose 2014 purchase of Viator helped them add bookable tours and activities, reports that their non-hotel segment grew35% in the third quarter of 2016 (now 24% of its total revenue).
  • Some sites, such as Google’s Trips and Trip.com don’t offer online booking, but they do offer tour and activities recommendations based on variables such as the weather, time of day, time of year and personal preferences.

Startups that are developing reservations systems for the tours and activities segment are generating considerable interest and investment. Their technology is critical to increasing the distribution of bookable products and giving consumers accurate real-time information.

In 2011, Phocuswright surveyed tour and activities suppliers about third-party reservation systems and found that 14% were using one. Last year that number grew to just under 50%.

All about timing

Consumers “want their tours and activities on-demand. If they can’t book it easily right now, while they’re in the mood, they might not book it at all.” This is one of the conclusions made by Dennis Schaal, executive editor at Skift, in his January 2017 article on the tours and activities megatrend identified in Skift’s Travel Megatrends 2017.

Unfortunately what travelers want and what works for the suppliers are very different. More than one-third of tours and activities bookings happen same day or up to two days before the trip, when the consumer is in-destination, yet 41% of operators require booking at least one day in advance and only 24% do same-day booking.

Add to that a frightening statistic from Google — 88% “of travelers with smartphones would switch to another site or app if yours doesn’t satisfy their needs.”

Go where the customers are

Douglas Quinby, Senior Vice President of Research at Phocuswright states, “The fiercely competitive landscape of res system startups is laying the foundation of the future of this sector of travel – it’s the future of online discovery and booking for travelers, who are already hungering for it and waiting for the industry to deliver.”

Consumers assume they can research travel plans online, compare providers, book online and keep connected via their mobile devices in other travel industry sectors, so it’s not unrealistic for them to expect the same with tours and activities. Thankfully, for the entire industry, this sector is working hard to catch up.

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Karen Galles

Karen Galles

Karen Galles recognizes that each client has unique needs. Tapping into her travel industry experience, Karen is someone who loves to investigate, collaborate and find creative solutions to achieve success. Karen previously worked for companies including roomlia, Expedia and Certified Vacations. She graduated from Niagara University and holds a Bachelor of Science (B.S.) in Tourism and French.


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