Matija Marijan remembers the days when hotel guests decided what to do by perusing colorful fliers in the lobby promoting local attractions like aquariums and zoos, museums and golf courses. The display’s setup spoke to an underlying assumption: Travelers decided first where they wanted to go — settling on what they wanted to do was almost an afterthought.
Those days are gone.
As the evidence for experiences’ increasing role in driving travel decisions mounts, online travel agencies, hotels and others in the industry are taking note. Some are changing how they do business.
Marijan is in a good position to know. The former Expedia Group executive is the CEO at Turneo, a B2B travel startup that works mostly with hotels to distribute experiences.
“Hotels are still mainly selling rooms — that's where they make the money,” he said. “But now they're using experiences to make themselves relevant earlier in the purchase, to say, ‘Hey, you want to come to this hotel because of all these experiences you can do there.’”
Hotels are still mainly selling rooms — that's where they make the money. But now they're using experiences to make themselves relevant earlier in the purchase, to say, ‘Hey, you want to come to this hotel because of all these experiences you can do there.'
Matija Marijan - Turneo
Tripadvisor Group CEO Matt Goldberg agreed on the growing importance of the sector, noting that the company’s experiences business on the Viator marketplace grew by 59% last quarter over the same period a year ago.
“This is a category experiencing explosive growth,” he said. “We see it in the fast-growing global market. We see it in our own numbers – we’re selling three times as many experiences as pre-pandemic, and we have as many travelers visiting us for experiences as we do hotels.”
At Tiqets, an Amsterdam-based online booking platform for museums and attractions, sales volumes had doubled from pre-pandemic levels in 2022 and have showed no signs of slowing down, said founder and president Luuc Elzinga.
“Feedback from our partners indicates a noticeable shift among travelers,” Elzinga said. “Many are now prioritizing unique and immersive experiences as their top consideration when planning a trip, often booking these experiences before finalizing flight and accommodation arrangements.”
Yet even with all that momentum, “What to do?” may never supplant “Where to go?” as the top priority for travel marketers — for reasons that are baked into the very nature of travel experiences and how they are sold.
Data: Growing importance of travel experiences
Experiences has long been one of the largest and most important sectors in travel and tourism, representing $253 billion in global gross ticket revenue in 2019, Phocuswright research shows. Even after the COVID-19 pandemic, nearly two in three operators reached or exceeded pre-pandemic booking levels by 2022, in particular those based in North America and Europe.
What may be new is how travelers prioritize experiences — and the nature of the activities they choose on holiday.
Mabrian Technologies, a company specializing in travel intelligence and sentiment analysis, applied big data and artificial intelligence to test the premise in a report last month. It used social listening to analyze more than 400 million tourism-related posts on Instagram and Twitter between the first half of 2019 and the first half of 2023.
Mabrian’s main conclusion: Experiences are closing the gap on conventional travel activities as motivation for travel.
The data showed activities such as arts and culture, nightlife, family activities, shopping and sunbathing — things that accounted for 60% of travel-related posts in 2019 — constituted barely half by 2023. Meanwhile, travel postings about active lifestyle, food and cuisine, nature and wellness activities increased from 40% in 2019 to nearly 50%.
“We’ve transitioned from the traditional sun-soaked coastal holidays and city-centered cultural and shopping endeavors to a pursuit of experiences that foster a connection with our surroundings and ourselves,” said Carlos Cendra, chief marketing officer at Mabrian. “The pandemic’s impact and the periods of lockdown have magnified the importance of outdoor experiences and personal well-being, leaving an indelible mark on travelers’ motivations.”
Tripadvisor’s Goldberg offers data to back that. Compared with last year, the average cost of an experience shopping cart on Tripadvisor continues to climb, he said. Growth in experiential categories more than doubled in some cases: cultural and theme tours were up 228%; day trips and excursions, 208%; and food and wine, 197%.
Goldberg doesn’t see this trend abating because not only are customers spending more on experiences, they’re enjoying themselves doing it. He bases that on Tripadvisor Group data showing the average review score for the experiences category is higher than elsewhere in travel, and travelers are returning to the site and its operators to book experiences in higher volumes than ever.
“We share this to point out the durability of this growth, and our conviction that it’s here to stay,” Goldberg said. “It’s why experiences is a critical pillar in Tripadvisor’s new strategy, which puts travelers first with useful, highly targeted content – and travelers are showing us they want experiences.”
How social media shapes travel experiences
The folks at GetYourGuide think the industry has it backwards; people have always wanted to prioritize experiences in their travel decisions – they just didn’t have convenient access to the information, said Emil Martinsek, the chief marketing officer at the Berlin-based online travel agency and marketplace for tour guides and excursions.
“Now you [have] apps that help them really discover the things they wouldn't otherwise discover through a basic writeup in a guidebook,” Martinsek said. “So we view what we're seeing in the market as more a fulfillment of a technology trend that's been supported by a cultural desire to have experiences as a core part of travel.”
Plenty of documentation shows a heightened interest in experiences, especially among younger travelers. In a study of more than 8,000 travelers worldwide, nearly 60% of Gen Z and millennial travelers said they were prioritizing spending on experiences over things, according to research by Arival and Phocuswright.
Yet now that travelers can discover croissant baking classes as easily as organized tours of the Louvre, it’s opened more opportunities for operators to connect with travelers of any age, Martinsek said.
This is a category experiencing explosive growth. ... We’re selling three times as many experiences as pre-pandemic, and we have as many travelers visiting us for experiences as we do hotels.
Matt Goldberg - Tripadvisor Group
“We have a lot of people who are 50, 55, 60, they're retired, their kids are Gen Z or millennials, and frankly, they're into the whole experiences over things,” he said. “It's just that our ability to reach them was so much harder 15 years ago than it is now. If you don’t know what’s available to you, your limited view of travel is, ‘Well, I go to a beach and I relax because that’s the photo that I’ve seen,’ or ‘I go to the Eiffel Tower because that’s what I know to do in Paris.’”
Where people once collected keychains or refrigerator magnets to document their travels, now they collect memories — which they can chronicle on social media accounts, he said.
“If the desire for the experience has always existed, but you didn't know what was possible, social media opens up this whole world of discovery,” he said. “That's really the power of social media. It provides an additional lens of discovery that never existed before.”
Now when travelers visit a waterfall, a selfie set before the plunging waters isn’t enough; they crave a video of ziplining across the face of it.
“The modern way we think about travel experiences is a bit more immersive,” said Turneo’s Marijan. “Yes, you could share sitting on a beach, but that's kind of a little bit boring and standard. So if you do something exciting, this content is a lot more shareable, a lot more engaging.”
Smart hotels and destination management organizations have learned to use that to their advantage, he said.
“When people stay at a hotel and do an experience, no one is going to share anything about a hotel, they'll share experiences,” he said. “We now see hotels or their marketing agencies starting to use content from experiences to promote the hotel and the destination on platforms like Instagram. Because again, like a nice beach and a nice pool is a good Instagram story, but flying with a panoramic flight over islands is a much better way to sell, ‘Hey, you should come to this destination [and] stay with us.’”
Why “Where to go?” still comes before “What to do?”
To address the growing prioritization of experiences, Tripadvisor redesigned its attraction pages during the second quarter, improving product discovery by exposing 30% more travelers to bookable experiences than the same period last year, Goldberg said.
The company also upgraded its core trip planning product, Trips, with a new AI-powered itinerary generator, Goldberg said. The tool gives preferences around activities and experiences equal prominence during planning with more basic inputs — such as destination, travel dates, etc. — to deliver unique itineraries that focus as much on the “what to do” as “where to go.”
In some cases, the question of where to stay has become secondary to what the traveler wants to do. Activity/experiences platform Klook now offers hotel bookings in tandem with some experiences, co-founders Ethan Lin and Eric Gnock Fah said this week at WiT Singapore. One example: a package that includes tickets to see Taylor Swift's concert in Singapore next year.
Yet the experts see limits in how far the industry can go in marketing experiences.
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One factor is the relative dearth of experiences’ online presence. Ben Drew, Viator’s president, highlighted that challenge at Phocuswright Europe in Barcelona in June.
“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.”
GetYourGuide’s Martinsek also estimated that no more than a quarter of travel experiences are available online. Many of the businesses – small, independent operators - are not digital-first, he said, calling it a “final frontier they haven’t crossed.”
“Part of it [GetYourGuide’s role] is helping operators and guides understand the value of reaching out to digital audiences,” he added, “so you’re no longer dependent upon people stumbling across you.”
By the same token, Turneo sees part of its role as working with hotels to uncover niche activities that might be too small to appeal to the broad audience of an online travel agency – but are just right for that hotel’s clientele.
“Hotels can pick out these hidden gems for their guests,” Marijan said. “When a hotel works with us, they'll typically bring their local supply and over 50% of those suppliers are not digitized in an OTA sense. They may have a website, but they're not selling online. So in a way they are now getting digitized. This is almost the first time they're selling something online in an automatic way.”
Yet even when experience operators offer a robust online presence, few travelers book activities far in advance, unless it’s for things like big sporting events, popular Broadway shows – or Taylor Swift concerts.
That’s not likely to change anytime soon – if ever.
One reason is weather. Because so many experiences occur outdoors, many travelers will wait to see a favorable forecast before booking, say, a boating outing or day hike.
“That’s why I think the conversion is never going to be, like, four or five months in advance for most experiences,” Marijan said.
Another reason experiences are booked later: dynamic pricing. Travelers know the longer they wait to book airfare or lodging, the worse their odds are of getting a good price. In contrast, experiences tend to use fixed pricing.
“So the only incentive to book in advance if is if you think it's going to sell out,” Marijan said. “I think five, six days in advance for most things are fine.”
So long as those trends hold true, it may not matter how many more travelers prioritize experiences during the inspiration phase of their planning — online travel agencies will still need to prioritize booking airfare and lodging in their marketing.
Recalling his time at Expedia, Marijan said the challenge for OTAs is their business model is built on converting online visitors to a booking.
“The problem [with experiences] is if you're capturing people four months before they travel and they're going to make a booking five days before they consume the experience, that's really hard to make it work,” he said. “You're investing in marketing four months in advance and then you're counting that three and a half months later they're going to remember to come [back] to your website.
“I just don't know if the economics work.”
Which is why even as experiences continue to become less of an afterthought, visits to Booking.com, Expedia or Tripadvisor are still likely to begin with some form of the question Tripadvisor poses across the top of its home page: “Where to?”
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