There are three very different types of people that join the so-called hot sector of the industry at the moment: tours and activities.
There are those who have worked previously in flights and hotels (who understand the travel industry, but not tours and activities) and those who come from a tour and activity background (but are coming fresh into travel distribution for the first time).
And then there are those with no industry experience at all, but - in that often refreshing and disruptive style - want to create something after finding a problem that needed solving.
All three types tend to make quite different assumptions about the challenges of the sector.
So here then, in no particular order, are my top five surprises that those coming from outside the industry or the flight and hotel sector need to consider.
1. The missing product data
In flights and hotels there are plenty of sources of transactional product data (descriptions, dates, prices, availability). Actually there are so many sources you can play one off against another and negotiate to get a better deal.
With tours and activities there is no data to build your new service on. You pretty much have to go out there and collect the data yourself.
This leaves aggregators and intermediaries either selling products (such as city based excursions and attractions) where availability isn't an issue or they pass the consumer over to the supplier in some fashion (web traffic referral, enquiry lead via email etc).
2. The billboard effect doesn't work quite the same way
Cornell University/Chris Anderson published a famous study outlining the billboard effect that occurs on Expedia. The analysis showed that when a hotel was listed on Expedia there was a 20% uplift in reservations (received via non-Expedia channels - eg. its own website, call centre etc) above and beyond the reservations generated on Expedia itself.
This impacts commission levels - eg. if Expedia generates 10% of bookings for a supplier at 15% commission, if there is a 20% billboard effect, the actual Expedia commission on the 10% of bookings is only 7% not 15%.
One problem with tours and activities is that the product names are very generic and tend to be based on destination names. This will mean that multiple suppliers will have similar sounding products - ie. multiple suppliers will see an uplift in reservations.
There is a billboard effect though if the supplier's name is disclosed on the aggregator and intermediary website.
Anderson explains it here:
httpv://www.youtube.com/watch?v=nTv26PBig-o
3. No price comparison
Everyone's products are different. In flights / hotels you can create a price comparison website as you can source exactly the same hotel and flight from multiple distribution channels.
With tours & activities the products are not directly comparable. Price comparison doesn't exist. Metasearch doesn't really exist either (its more of a meta-esque idea search rather than a meta-product search)
4. Replicable products
If you approach one supplier in a region with a product organised by another there is quite a high chance that that supplier can replicate the same product.
In hotels you can't approach a 3-star hotel in one location and say please can you be a 5-star hotel somewhere else. In tours (more so than in activities) this happens all the time.
5. Local vs non-local businesses
If you are selling a tour to Italy the end supplier (the tour operator legally responsible for the delivery of the service) can be either located in Italy or could be located anywhere in the world (eg. in the source market such as the United Kingdom).
Both though are considered to be the primary tour operator.
Gets messy quickly as you can find there are companies who are experts in a destination but are based no where near it. The local operators often have a version of the same product at vastly lower prices.
You start mixing up the two approaches on the same website and consumers will struggle with making product selection judgements (due to the price discrepancies between one tour and another).
Finally
It is part of the challenge of the sector that these differences exist between tours and activities versus flights and hotels.
Establishing a strategy and implementing technology that works for one travel sector doesn't necessarily work for the tours/activities sector.