The online tours and activities space has gained notable attention from the media recently. We have seen articles covering newcomers on the market in addition to discussions of the current issues and challenges within the market.
Tours and activities was one of the main topics at the PhocusWright event at ITB as well, for example. We believe the time has come for newcomers and disruptors to express their position, so here we will attempt to convey our view on the market and its many opportunities and challenges.
NB: This is a viewpoint from Valentin Dombrovsky, vice president of innovation at Excursiopedia and Oliver Nutzel, CEO of Regiondo.
We at Excursiopedia, with a strong footprint in international tours and activities, and Regiondo, one of Germany's main players and a clear focus on local tours and activities and domestic markets, want to consolidate our views.
The tours and activities market differs from other travel markets
A few words about the T&A market for those who have missed previous articles. The market has a number of relatively small providers and quite low online penetration at the moment (23% – compared to 47% for air tickets, 29% for hotels and 33% in car rental according to PhocusWright).
The market is difficult to structure because each activity provided is more or less unique and tour features are not like hotel amenities. So the first step needed to bring the market online is to structure unorganized information to enable the customer to make an informed choice.
It is a general problem of "digitizing information" that needs to be solved in an individualized way which is suitable for this specific case. At the moment there are a few solutions that exist throughout the market.
Current players focus on standard, well-structured offers
We see ourselves playing in the same market as relatively big players such as Viator and GetYourGuide (though the former leads by a large margin). These companies have done a tremendous job bringing traditional T&A services (sightseeing tours, some attraction passes, etc.) online.
They have managed to build structured shopping platforms for such activities by working with large leisure activity providers. In some sense, they resemble Booking.com or Expedia for the T&A market.
But there are also companies that try to respond to the needs of the majority of providers on the market – small companies and individuals that were mentioned before, such as Regiondo and Excursiopedia.
These companies are real marketplaces that help those who need simple solutions for small businesses or individuals – often those which lack a dedicated person to work with online channels. Such companies are comparable with Airbnb to a certain extent, despite the fact that the market they are working on is quite different.
As mentioned previously, the market is characterized by a high level of diversity, a feature that brings fun into travel while also making it difficult to structure.
Marketplaces to aggregate the diverse offer portfolio
Marketplaces are the tools that should help people do business more effectively. Of course, providing an individual with the opportunity to place his offers online in a simple way is a necessary step, but it is only the first of many.
Platforms like ours are here to educate service providers about technology and marketing issues, thus helping them build a sustainable business with the appropriate knowledge and support.
The power of the platform is the power of multiple providers based in different locations all over the world who work together to make travel more enjoyable.
Of course, the platform also enables competition and is beneficial to travelers who are presented with the opportunity to compare different offers, thereby optimizing their overall travel experience.
Technology to reduce complexity and enable online booking
The tours and activities market is complex and defined by many types of activities: entry tickets, regular tours, individual tours, offers based on opening hours or event tickets, etc.
It is crucial for providers (and consumers) to have a common technological solution to bring this data online and be able to manage it and make it “sellable”.
While it is relatively easy to make a listing of airline ticket offers or hotels offers, showing all offers for travel activities on one service alone is a much more challenging task - not to mention also providing the possibility to book these offers online.
This problem, however, is not necessarily that difficult to solve, but it has been difficult for big players in the T&A market to recognize. Further –complications arise when the mobile world comes into play (which is still up and coming in T&A space).
Achieving customer relevance
The fact of the matter is that most customers make decisions regarding leisure activities while they are already traveling. And there is much to be done in terms of building up online T&A services and brands and educating customers (as well as service providers).
We think that we can obtain assistance from OTAs who want to raise their profits by offering additional services to their clients. But there is a need to find the way to sell the right products to the right people at the right time, and we still have much to learn.
There’s also a mobile channel that’s in line with customers’ habits (if we manage to offer kind of “lastminute” booking opportunity), but again the right solution for T&A on mobile is yet to come (and maybe the solution will be brought by some new player on the market).
There is much to be done and we think that it should be done by the community of online T&A platforms with the help of service providers themselves. We recognize and acknowledge the need to implement technological standards that will enable the building of a T&A ecosystem on the market.
We need to gain the trust of tour providers, travelers and other market players. We understand that it may not be simple, but we are confident that we will continue to grow.
Challenges are here to overcome and good news on developments in the online tours and activities market is coming fast.
NB: This is a viewpoint from Valentin Dombrovsky, vice president of innovation at Excursiopedia and Oliver Nutzel, CEO of Regiondo.
NB2: Zipline jump image via Shutterstock.