Tours and activities coming of age but still room for tantrums

Lots of interesting facts and figures in Phocuswright's latest update on the tours and activities sector.

What stands out is that the online T&A market is expected to more than double in gross bookings according to data from Phocuswright.

The research firm suggests gross bookings will increase from $12 billion just two years ago to $27 billion in 2020.

Little wonder then that the large online travel agencies such as Expedia, Priceline, TripAdvisor and Ctrip, have been strengthening their presence in the sector in recent years.

That's not to mention Google which hasn't exactly shown its cards yet but developments such as its Trips app perhaps hint at the direction.

Helping to drive growth will be the startups springing up around the sector. The Phocuswright data reveals that about 200 newbies have launched since 2003.

In addition, some $765 million in capital has been raised.

A glance through the tnooz archives brings up names such as Hong Kong-based Klook, which unveiled its service about two years ago and announced its Series B funding of $30 million earlier this year.

Another name hitting the headlines is BeMyGuest, which attracted undisclosed Series A funding earlier this month, saying it has now raised a total of $11.5 million.

Asia will likely be one of the battle grounds for tours and activities.

A Phocuswright report from late 2015 shows Chinese travellers more likely to book their tours and activities in advance and via mobile.

Distribution giant Amadeus announced a destination content marketplace for Asia earlier this month with a partnership with Veltra.

But, some of the old challenges persist, namely fragmented product and, a lack of a technology foundation.

The latest Phocuswright data says suppliers are waking up to digital with 45% saying they now use a third-party reservation system compared to just 14% in 2011.

The data also points to an increased desire for direct sales with more than 50% of suppliers saying they're planning a mobile website which enables bookings this year.

But, it doesn't look as if there will be a tipping point in online sales any time soon with just 15% of T&A products sold online last year and an expected 20% by 2020.

The idea of a GDS for tours and activities was recently floated on tnooz but there's more to it than that.

Experts in the field will ask who best to develop one, is it really needed given existing marketplaces as well as the varying levels of partnerships already between suppliers and distributors and suppliers and tech providers.

And, what of suppliers and other suppliers, say hotels and airlines, those deals are floating about too.

So, the conclusion - nothing earth shattering but it's changing, it's complicated, it will take time and it will (hopefully) be rewarding.