Last week GetYourGuide announced its Preferred Partner Program.
The initiative closely aligns the Berlin-based tour and activities online travel agency with two companies that provide reservation systems to operators.
Through the program, GetYourGuide
is promising better API connectivity and financial incentives to those operators who use those systems.
This is the combined response by GetYourGuide as well as Bookingkit and Rezdy (the reservation system companies) to two acquisitions of
competitors.
As well know, in the spring of 2018, Booking Holdings and TripAdvisor each acquired reservation system companies: FareHarbor and Bokun, respectively.
With the announcement, GetYourGuide co-founder and chief operating officer Tao Tao penned
this article for PhocusWire, making a clear-throated case for why tour and activity operators should beware of reservations systems owned by OTAs.
Who’s threatening whom?
Tao calls the acquisitions a “growing threat” to the segment in the op-ed, suggesting that those systems could limit their operators’ ability to sell successfully across OTAs that compete with their owners.
He also suggests that the owner OTAs
might leverage operators’ business data in ways that could ultimately disadvantage those operators.
Tao could be right. His competitors may eventually do these things.
TripAdvisor is already favoring operators using its Bokun platform by
making its sponsored listings (a new advertising product) available only to users of the system (the company has said it is not biasing its organic sort order for Bokun users).
For those operators who use one of these owned or aligned reservation
systems and who rely heavily on OTAs for their bookings, these are important topics to consider.
Big deal, or small potatoes?
However, in the long run, these alignments are small potatoes. I do not mean to minimize the move by GetYouGuide, bookingkit and Rezdy. It’s a sensible strategic response to the threats those companies face following acquisitions by and of their competition.
But
let’s put this context. This sector is far bigger than most travel industry observers appreciate.
Here are some facts:
Supply side operators number in the hundreds of thousands. However many tour and activity suppliers you think
there are, you should probably double or triple that number.
The last Phocuswright supply-side sizing put the number at about 125,000, but that was based on the countable number from online platforms (I was a lead researcher on that project).
Indications we have since we began Arival suggest the number could be several times larger. Many are not listed on online platforms. Many do not use reservation systems.
There are
more than 150 reservation and ticketing system providers to tour, activity and attraction operators. That’s right. More than 150. And that’s only the ones we could find.
GetYourGuide, TripAdvisor and Booking.com have alignments with four.
No
one pays attention to the tech in the highest volume segment in this sector. About one third of those 150 companies are ticketing systems serving attractions.
The largest handful of those ticketing systems probably do more transaction volume
than most of the 100 or so systems serving the long tail of tour and activity operators – combined. And no one in the travel media and conference world talks about them (apart from us, obviously).
So, these developments may only pertain to
a few thousand operator customers across these systems that also use these OTAs. And really only a smaller few that closely follow the industry politics across the tech and distribution sector.
Bubble? What bubble?
The broader travel industry, media, investors and observers have long misunderstood and underestimated tours, activities and attractions. Even the editor of this website, long a cheerleader for the online tours and activities sector, introduced Tao’s
article wondering if this could be a first prick in the tours and activities bubble that must inevitably burst.
It’s true, the sector is hot. Investors have poured more than $1.6 billion into nearly 40 tours and activities startups since
2017.
Two of those companies – GetYourGuide and Klook – account for two thirds of that. For all of the funding, exits have been few and far between. And bubble or not, many of those companies won’t make it.
But industry onlookers
have continued to underestimate the size and opportunity of this sector. This is a sector with well over 70 OTAs, at least 150 technology providers, and hundreds of thousands of supplier operators (and growing rapidly), many if not most of whom have
yet to connect, have yet to truly get online.
Data deck on tours and activities
So are tours and activities online travel’s next big thing, or its next big bubble?
At PhocusWire sister brand WebInTravel's Japan & North Asia Conference held in June in Tokyo, I laid out the case for both.
Whenever you have two competing narratives
around a hot topic, there is usual truth and misunderstanding on both sides.
Regardless of which side you subscribe to, this deck will give you some data and context for what is (still) one of travel’s most talk-about sectors.