It seems everybody wants a piece of the tours and activities pie right now with developments across major online travel agencies, other intermediaries and startups.
Details are emerging from a PhoCusWright study of the European marketplace, which although not scheduled for release until early 2014, shows just how hot the sector is.
Europe is a large market for tours and activities, however, only a small segment of travellers would book online. For instance, two in three active travellers will shop on the web, but less than 25% will book activities online according to the PCW report.
It's worth remembering here that tours are not easy to deliver online with many of the problems for both consumers and suppliers detailed in this article.
Europe-based tours specialist CityDiscovery supported the PCW study about events, attractions and activities across Germany, UK, France, Italy and Spain.
Market-size, current bookings scenario
- European travellers spend up to €37 billion ($50 billion) on activities, attractions, events and tours. This is almost 54% higher than the US market (see here for Tnooz' report on the equivalent US study).
- Less than one-in-four Euros (23%) in tours and activities are booked online.
- Offline channels (tour operators, hotel concierges, phone, in-person) still account for the largest percentage of bookings.
Technology - through the supplier's lens
- More than 65% of bookings still come via email, and direct connection/APIs/extranet are used for a very small portion of bookings.
- Activity providers are small, independent and fragmented.
- 90% of suppliers operate in a single region, and the study reveals 60% serve fewer than 25,000 customers and report under $1 million in revenue.
- Use of technology by suppliers is low although the intent is high.
- Suppliers are very slow to adopt technology and they spend very little money on it.
- Suppliers consider their own website as the most important channel for bookings. However, they see a good trend via their mobile apps, and online activity providers/aggregators. Suppliers almost (70%) consider these online activity providers as an extremely important channel.
- While mobile bookings are on the rise for the tours and activities sector, a mobile revolution is still in its early stages. Data roaming charges and network limitations are seen as a hindrance to mobile adoption.
- Within the next 12 to 24 months, more travellers are predicted to book an activity via mobile device.
- More than 40% of respondents (suppliers) are planning to implement a mobile app to enable sales and ticket delivery via the channel.
If any further convincing of the potential for the activities market place was needed, think about Airbnb's announcement to let hosts sell tours
or perhaps Nor1's acquitision of FlexTrip
which will enable hotels to distribute tours and activities to customers.
This can only go in one direction - up!
NB: London image via Shutterstock.