Expedia is set to make a massive push into the tours, activities and things-to-do sector, with a major strategy to give suppliers the tools for distribution and marketing.
The company is also planning on giving hotels and airlines the ability to sell products with a suite of services aimed at making tours and activities as important a part of a traveller's itinerary as a hotel, car hire or airfare.
In short: Expedia is plotting a significant and laser-focused move on the sector, way beyond its existing and somewhat low-key approach to selling things-to-do in a destination.
The ramping up of its strategy is already being talked about privately by those currently in the market and "watching extremely closely" as a game-changing and deliberate move to target arguably the last remaining area of the tourism industry to fully embrace the opportunities apparently associated with electronic distribution.
Why? Because a company with the technical and marketing muscle of Expedia is behind it.
The new and global approach is being housed under a new brand within Expedia Inc known as Local Expert Hub, run by the Expedia Local Expert division, and is due to be unveiled formally in the next few weeks.
The company held a briefing this week, however, led by Kerri Landeis (vice president of ELE) with Ruslana Zbagerska (senior director for ecommerce and partner marketing at ELE) and Cari Thompson (ELE's marketing manager)
Some of the strategy already exists such as the Destination Services wing, the area which allows tour and activity providers to upload availability, content and prices, either via XML links or manually into the Expedia database of inventory for bookings on its consumer-facing sites (Expedia.com etc).
The Hub's Local Expert, which has been around for a number of years (was originally called Expedia Fun), is one of four elements now being drawn together.
It is an on-site concierge service, primarily an Expedia branded (or provided), staff-led initiative within hotels to up-sell tours and activities and other products within a destination (Orlando and Las Vegas are the main resorts using it).
This is the technology behind the Local Expert service, which has also existed for some time but is being extended. It is primarily a reservation system with live availability for products and services, used by the same hotels.
But in a significant move away from just being for intermediaries looking to up-sell products, Local Access will be also made available to tour and activity suppliers.
Expedia says this system has been massively updated from the original point-of-sale technology in order for suppliers to use it - built in-house but also by licensing a third party system (it will not disclose from where).
Local Custom Link
Then follows two brand new services within the Hub.
The first is Local Custom Link, an API of every piece of inventory on the Expedia tour and activity platform, packaged similarly to the existing Expedia Affiliate Network system for flights and hotels, so third parties (such as hotels and airlines) can integrate products within a tour and activity channel on their own websites.
This will also include content (such as photos etc), real-time availability, booking and reservations.
Local Experiences Xchange
The final piece of the jigsaw is a way for intermediaries (such as hotels or tourism platforms looking to feature tours and activities) to have their own branded website with a feed of relevant local tour and activity content.
Essentially, a white (or private) label service.
Both the Local Custom Link and Local Experiences Xchange are what officials are calling "beta" products.
Expedia says the decision to target tours and activities in such a major way is two-fold:
- The company has been gradually upgrading every aspect of its technology over the past few years, including how it distributes product to third parties and its increasing use of APIs to give third parties access to its inventory. Tours and activities is the latest channel internally to get the nod.
- From a consumer-facing perspective, Expedia says it wants tours and activities to be seen as an intrinsic part of what they consider booking online, alongside the flight, hotel and other core features. It is, after all, often the reason why people take a trip: to do things in a destination. It's all about the "experience".
But these elements do a disservice to what else is really going on in the wider tour and activity marketplace, and probably another significant strand to Expedia's strategy.
By producing a suite of services to, in Expedia's words, "help" suppliers and intermediaries with distribution and marketing of product, it clearly wants to grab some of the marketplace for itself and essentially bring the thousands of suppliers under its wing.
Will it make money?
It hopes so. The affiliate scheme for a commission on bookings on whatever system taken by a customer works along the same lines as those signed up to the Expedia Affiliate Network.
Inadvertently the company last year outlined how important the sector will be to its bottom line. A senior figure disclosed that tour and activities were projected to bring in around $1 billion in gross bookings a year by 2015.
So who will be sitting up and taking notice?
The other tour and activity OTAs (such as GetYourGuide, Isango or Viator) certainly, alongside those dipping in to metasearch for products (PocketVillage) and, indeed, tech providers (Flextrip, TourCMS, Rezgo et al). But perhaps where the most interesting aspect of all this resides is in how its larger rivals might react.
Travelocity (Lastminute.com) and Orbitz (Ebookers) have tours and activities as a channel (here and here, respectively) but have not targeted the B2B end of it in the same way.
Priceline (Booking.com) has tried but not given the sector the same level of focus as hotels (why would it, some might argue).
But there is bounty to be had in tours and activities, as PhoCusWright has outlined, so Expedia's decision to throw an enormous amount of effort into ELE and the Hub could, err, rub off on the others could trigger an exciting and new battleground over the next few years.
Either way, tours and activities is probably not going to be the same again.
NB:Mountain biking image via Shutterstock.