The last month has been rather busy in the world of tours and activities, with three significant announcements.
First, Klook announced $60 million in funding (now at $96 million total). Then, GetYourGuide revealed its own $75 million round (bringing it to $170 million in its nine-year history).
Finally, Ctrip announced a strategic agreement with Big Bus Tours (worth a read if you have not read that press release).
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Now, I am not going to get too excited about funding announcements, apart from that it reinforces that venture capital investors are willing to back this sector significantly, when it looks like it is working.
I am more interested in the some of the fine details that came with these three announcements. All mentioned tour personalization. Let's assume these announcements correlate to plans rather than being misdirection.
What did Klook talk about?
If the app is used in simplified Chinese, the recommended activities shown by the app would be more experience-based and less tour focused, co-founder Eric Gnock Fah says, since data has shown that mainland Chinese tourists are less inclined to book tours.
South East Asian tourists, however, are more likely to book day trips and tours around a new destination, and hence such activities would be recommended to them more, he says.
Klook also works with tour operators to customise tours, preventing a “cookie-cutter” experience, Gnock Fah says.
...and what did GetYourGuide say?
"We’re trying to hone our recommendation algorithms — and we’re actually working quite a lot on machine learning and AI right now in order to really understand what customers want, to understand customer intent, CEO Johannes Reck says.
"Before they book, when they book, after they’ve booked — and then really have tailored recommendation. So that we can become a much more integral part of their trip."
"A couple of years down the line, with what we’re building, with a smartphone you’ll have a companion in your pocket that you can take out at any point in time and will recommend you the best things for you to do for your trip at this very point in time," he adds.
The online travel agency's partnership with Big Bus Tours ensures that users enjoy a one-stop booking experience that is not only hassle-free and efficient but is also a solution to local transportation difficulties.
Chinese travellers are able to use QR codes to join these tours and select different sightseeing routes to make their experiences more personalized.
What do the different approaches mean?
There is a fundamental difference between, as GetYourGuide would suggest, personalizing the recommendation vs, as Klook and Ctrip suggest, personalizing the tour experience itself.
Funding announcements only reinforce that venture capital investors are willing to back this sector significantly, when it looks like it is working.
In Europe and the U.S., a good proportion of tours are high volume products running on a fixed schedule with upgrade opportunities, but limited capacity to personalize for operational reasons.
In contrast, in Asia, a good proportion of tours are private and guide-led, meaning that if you want to change your itinerary, this is possible. The guide or driver will take you to whatever you want.
GetYourGuide has announced plans based on the Europe/U.S. way of doing things, where the only option is to personalize the recommendation.
Klook has announced plans based on how it works in Asia, personalizing the tour itinerary.
Is there a right answer?
I'm not too sure.
With Klook and GetYourGuide funded on the basis of achieving global success, neither are currently in line with the diverse styles of personalization that are necessary to achieve that.
My hunch is that Ctrip has called this right. It has taken the mainstream Europe/U.S. style and worked out how to add an in-destination and personalization layer on a commodity tour, using technology.
This is also distributable via travel agents.
Looking even further ahead
I am sure we will soon be discussing the impact of self-driving car tours on the tours and activities sector.
Fundamentally these will be all personalized itineraries created by an online travel agency. Klook will have the early lead on this, if it can learn from the current personalized itinerary plans, thus being best positioned to win this particular future.
Perhaps most interestingly, is that this is a company that many in segment of the industry weren’t even talking about 24 months ago at all.
It's great that we have three companies attempting the personalization angle in three different ways.
From this we can see that personalization, as a concept, will be a key consideration going forward.
Hotels are also talking about what they call hyper-personalization, so this is not a challenge (or opportunity) that only affects my corner of the industry.
* This article was originally published on DestinationCTO.