Since the turn of the millennium the industry has been focused on flights, hotels, car hire. Flights, hotels, car hire. Worth repeating so you remember how dull it is.
As you might expect me to say, it's not where the cool kids are - we all hang out in T&A... or tours and activities (before you ask)
Now, I have listed many of the T&A players previously in this HUGE list (with over 70 companies mentioned, including my own, TourCMS).
Within this niche the action at the moment is in the person-to-person (P2P) tour and experience marketplaces. These are where individuals offer services direct to consumers. A bit like AirBnB/Wimdu et al, but for tours.
Here are the 29 companies currently making moves in the sector (with a description in their own words). Our analysis follows...
- Gidsy (not yet launched) - "Gidsy is a community marketplace for authentic experiences. Besides booking fun stuff to do, anyone can host activities. Think unique walking tours guided by locals, nature hikes with wild cavemen and exclusive pop-up restaurants hosted by top chefs."
- GuidedByALocal - "An online community of locals guides and travelers around the world"
- GuideMyTour (not yet launched) - "The site connects enthusiastic guides from all backgrounds with visitors who want an interactive exchange when they walk or visit."
- Indie Tour Guide - "With the help from a certified local guide, travelers can gain insider access to their destination with one of kind, customized tours that address their interests and provide a richer travel experience"
- GuideHop (not yet launched) - "A place where professional guides, instructors, and locals can share their passions, find new ones, and make a few extra bucks along the way."
- LeapLocal - "Putting travellers in touch with recommended local travel guides"
- Localyte - "Connects travelers with Localytes: local people and services in travel destinations"
- Omoly - "Represents a group of passionate guides who love to share his or her hobbies, interests, and life style with willing participants"
- Shiroube - "Explore untapped local scenes with local guides"
- Skyara - "A marketplace to offer fun things to do, meet new people, and share experiences"
- Tourbie - "Personalizes your trip by connecting you with locals so you can have real, memorable experiences"
- ToursByLocals - "Take a private tour with a knowledgeable local person as your tour guide"
- Tripbod (additional service, soon to be launched) - "Connecting people who want to go on trips with local experts"
- TripColony - "What is the best way to travel? To have connections in the places you are visiting"
- TripFlock - "A planning and collaboration platform for travelers, travel people and travel businesses. TripFlock is not a web site. It’s part operating system, ecosystem, apps marketplace and desktop rolled into one very cool travel platform"
- Tripping - "Want to step off the beaten tourist path and step into local culture? You can use Tripping to meet friendly local people, all over the planet" [TLabs Showcase - Tripping]
- Sidetour - "Authentic Experiences. Real People"
- Synotrip - "Whether you want to travel yourself, choose your own tour guide, or get a tailor-made tour, Synotrip is here to make it easier for you to plan your tour"
- Vayable - "Connects explorers with great people who want to share the things they love to do" - [TLabs Showcase - Vayable]
- Yowtrip - "A network of city ambassadors. We connect you with locals at your next destination!"
Right. In other words: lots!
Now, six months ago I could count the number of companies in this sector on one hand. Now we have 29. Umm - big change, wouldn't you say?
Okay, this is fresh, new, interesting and, at least to begin with, quite innovative. But before we get excited about things that are new and shiny, lets try some analysis.
How do they work?
Some target professional freelance tour guides, some recruit individuals off the street and some run a mixture. Some also feature individuals who, actually are "fronts" for established local specialist tour operators/experience providers. Not really individuals at all.
Another way to categorise these companies is whether they focus on just one region (eg New York) or have launched on a global basis.
Although interesting, it is not the most important part
What is critical is the model.
None take responsibility for the transaction. All pass through the transaction through to the ultimate supplier (the individual).
Money tends to flow via the central website (taking 10-20% or a "deposit" is paid to the website and the balance is paid to the supplier, the individual, on the ground).
But will this model work?
On the surface the model looks OK. However there are challenges that need to be overcome.
One such example is the narrowness of the seam of suppliers that these websites are fishing in. If you don't have any suppliers, you won't have anything to sell. (Reminder: I am planning a webinar on sucking eggs, all welcome)
At the high volume end, these P2P websites are not working with the traditional five-10 employee, local specialist experience/tour operators.
These operators can handle scale on days where demand is high. Individuals can probably sell two groups maximum a day. Selling as much as you can on the peak days helps balance those days when you sell nothing.
At the lower volume end, P2P websites are constrained by working with individuals who are prepared to pay for their own public liability insurance.
What, I hear you say? Yes, public liability insurance.
As per the New Orleans Tour Guides Association [good background reading], tour guides often need insurance for scenarios such as:
"You are leading a walking tour of the French Quarter. When leading the group across a street, a passing vehicle runs down and injures one of your guests".
Insurance isn't too expensive (I have seen a quote for £100 GBP ($160) per-year per-tour guide), but this certainly creates an overhead for the occasional, amateur, tour guide.
As per this report via the Telegraph (UK), one amateur tour guide was even quoted £600 ($1,000) for public liability insurance.
This is model-busting, especially for the occasional amateur tour guide wishing to sell an experience once a month where they may only make a few hundred dollars a year.
The P2P marketplaces themselves may not be liable for this, but these liabilities exist in the ecosystems they are creating and hence need to be covered by someone. Creating an ecosystem where your suppliers are not covered for their liabilities will, frankly, not be sustainable in the long term.
These public liability challenges also introduce issues with working with the existing (and new) tour and activity distribution players. I know of at least one which, until the public liability insurance issues are resolved, will not distribute this kind of product, ignoring the generally positive feelings towards the actual products themselves.
The majority of the amateur-focussed P2P marketplaces listed above fail to mention public liability insurance on their tour guide sign-up pages. They make it sound like anyone can offer a tour in their local city when actually this is not the case at all, at least not until they pay for insurance.
Wrap-up
So let's take one step back. These marketplaces may have got the wrong SOLUTION but are absolutely addressing an existing consumer PROBLEM.
Consumers want in-destination experiences rather than generic bus tours. They want memories. They want stories they can share with friends and family on their return. They want something a little out of the ordinary.
Frankly, traditional in-destination tour operators don't achieve this particularly well, although they do comply with local legislation and insurance requirements.
There are, on the whole, very competent, fresh thinking, web entrepreneurs behind these new P2P marketplaces, having correctly spotted this consumer problem, but have come up with an inappropriate solution that just can't be sustained over the long term.
I believe ultimately this sector will end up with professionally delivered experiences rather than the focus being on the P2P aspect.
A few of the marketplaces listed above are already working with professionals hence will move to this quite naturally. The focus on experiences rather than tours is quite right.
P2P will probably be here to stay for accommodation, but for tours and experiences, things are not so clear.
Interesting times ahead.