It became clear from the outset of the Phocuswright Europe 2023 center stage executive panel about the tours and activities sector that the session’s title — “Much to Do” — carried a double meaning.
While an obvious reference to the subject, the title was also a call on operators to take better advantage of growing interest in the sector.
“We’ve been saying for years that tours and activities would be the next big thing in travel,” moderator Fabián González, Phocuswright’s market analyst for Spain, said in his opening to the panel. “Are we there yet?”
Not in the eyes of Ben Drew, the president of Viator, who sees “a long way to go” but “an incredible opportunity” in how few tours and activities bookings are done online.
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“One of the most incredible things about this industry that’s different to all the other travel industries, or many other ones, is that roughly three in every four dollars that goes through this industry is still offline,” Drew said. “It doesn’t even touch the internet in 2023. We’re talking about ChatGPT and robots taking over the world, and we haven’t even got three out of four people using the internet in tourism experiences yet.”
Alberto Gutiérrez Pascual, CEO and founder of Civitatis, emphasized the opportunity those numbers represent.
“I think this is the place to be now. You have seen investment in the last years,” he said. “We are in the best possible market, I think.”
Peter Ulwahn, CEO of TUI Musement, agreed.
“What I think is interesting as well is you can have this feel now that tours and activities start to play an even broader part in the hospitality,” Ulwahn said, citing TUI research showing that guests who book excursions drive satisfaction and loyalty increases as well. “So, yes, the market is incredibly exciting, but together with the other hospitality sectors it becomes even more important.”
Besides the need to boost online bookings, panelists also discussed the challenge of fragmentation in the market, the best methods to get noticed online and strategies for dispersing travelers so popular places aren’t overwhelmed.
Another prominent topic: lengthening booking windows.
“I find it incredible [and] it speaks to one of the biggest challenges in this industry that, basically, one in three people want to book on the same day as the tour is actually taking place,” Drew said. “And the challenges that are involved in that for small businesses are pretty great.
“One solution is to lengthen the average time or encourage travelers to book more in advance,” he added. “That goes against the prevailing traveler trends … which is closer to more instant booking. The other option is, amongst those operators who embrace really obsessing about what the traveler wants, those operators probably will lead the future of the operator entity toward something that is more instant and an even shorter booking window.”
Ulwahn provided an example of how TUI uses customer data to send personalized offers that can lead to more efficient booking processes. He compared the sector’s problems with short-booking windows to what hotels once faced.
“It wasn’t that long ago that you had walk-ins to hotels that you don’t have anymore. The hotel industry basically incentivized the customers [to early bookings] with discounts or specific benefits like skip the line or cancellation-free or something like that,” he said. “I think there are ways that you can increase that … to shorter [booking windows for tours and activities].
“We need to make sure our customers are really aware of this scarcity, especially on the hot spots, so they see they can secure their time, and [understand] that’s why it’s important and the benefits to early bookings, and that I think we can drive as an industry.”
Watch the full discussion below:
Executive Panel: Much to Do - Phocuswright Europe 2023
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