The tours and activities
sector is the most exciting part of travel. The pandemic, which caused the
industry to almost implode, is well in our rearview mirror as the part of
travel, long touted as “the next big thing,” makes progress in fulfilling its
potential and taking its position alongside flights and accommodation as a
fundamental pillar of the travel sector.
Furthermore,
the tours and activities industry is still taking shape – key players are vying
for position, technology innovations continually alter stakeholder dynamics and
there is strong and growing customer demand for experiences.
All this has naturally led to more and more travel and lifestyle businesses
exploring how they can participate, but in a fast-evolving industry as diverse
and fragmented as tours and activities, knowing where and how to sell
experiences is vital.
Online is growing, offline still rules,
omnichannel makes sense
According to research
from Phocuswright and Arival, the pandemic saw a surge in digital
distribution of experiences, with online bookings growing from 17% in 2019 to
30% in 2021.
Dedicated experience online travel agencies are both trying to serve and drive this online
demand, currently representing 5-10% of industry sales, but growing fast at 37%
compound annual growth rate. This was reflected in the earnings reports
of some of the major tours and activities businesses in the last quarter.
Ease of online booking, the growing trend of experiences driving the vacation
decision-making process, and the customer friendly combination of real time
availability, instant booking confirmation and free cancellation, are all
driving growth of online sales of experiences. This is being further bolstered
by leading businesses from across the travel sector, including airlines,
hotels, tour operators, ground transportation companies and OTAs, adding
experiences as an online ancillary to their primary offering.
Having said all this, most experiences – at
least 70% – are purchased offline. Some customers are buying experiences in
travel shops prior to a vacation, but the vast majority are sold in the
destination.
Experiences are still often a last-minute or spontaneous consideration and have
a short booking window. In-destination sales are either direct with experience
operators, or via an in-destination intermediary, such as reps from a hotel or
tour operator or a hotel concierge. New platforms designed to combine the
practical necessities and convenience of in-person sales by reps, with the
aforementioned benefits of the OTA channel, are enabling more businesses to
take advantage of the in-destination intermediary channel and delivering strong
results.
Customers will be sold to when and how they
want to buy, and it is up to businesses operating in the Tours and activities
space to recognize and serve this requirement. For a business to be successful
in tours and activities, it needs to be able to sell profitably at scale, and
the best way to do this is by leveraging omnichannel distribution.
Defining the “why” for customers
There are many reasons why businesses want
to sell tours and activities as an ancillary – it’s a fast-growing part of the
travel sector, enables increased dialogue with customers, and can help drive customer loyalty, to name a few. However, despite being the
best part of travel and what people remember most about their holidays,
businesses need to be proactive in selling experiences to customers.
Naturally, a business’ priority when it
comes to marketing and communication will be to focus on their core offering,
and the more successful businesses are those that have clearly defined and
explained why customers should purchase their products or services, whether it
be hotels, flights or package holidays. Businesses need to extend this
approach to their tours and activities ancillary product and outline why
customers should buy experiences from them – and there are a whole host of
reasons.
- The convenience of booking everything in
one place at the same time. One in 10 travelers wish to book experiences
online with their flight, accommodation or ground transportation – this number
is higher amongst millennials and Gen Z. - Offering a
curated portfolio of high-quality, good value, responsible experiences.
During various research projects carried out between 2021–2023, “High
Quality”, “Good Value” and “Responsible” were consistently identified as travelers’
key priorities for experiences. “High quality” is defined as a knowledgeable
and engaging guide, and small group size. “Good value” is focused on an
affordable price and the number and quality of points of interest included in an experience,
and in one research report was the number one purchase consideration across all
nationalities and age groups surveyed. Finally, “Responsible” revolved around
both limiting any negative environmental impact of an experience and supporting
the local community. - Skip the line and exclusive access at top
sights. Regardless of nationality, or if travelers are in a city or beach
destination, a priority is visiting the must-see sights, which are often
crowded during the peak hours of the high season. Benefits such as skip the
line, or access outside normal visiting hours or to normally off-limits areas,
are popular with customers, and were found in one survey to be the third-most
important factor in the decision-making process, after value and guide quality. - Strong health and safety standards, 24/7
online and call center customer support – there are numerous other potential
reasons “why” a customer should buy experiences from a business, but there must
be a proactive approach to communicating these. Leveraging customer relationship management to deliver email
campaigns, seasonal promotions, inspirational content – all businesses have
channels on which they can highlight experiences to customers to drive sales.
Make tours and activities work for your
business
Customer-centricity is key. A business needs
to identify and communicate why customers should buy experiences with them and
ensure they are then selling them in the channel and at the time customers want
to buy them.
Yes, online distribution is the fastest growing channel, has low
barriers to entry, can be set up almost instantly and will bring sales, but with
the majority of experiences bought in destination, the way to drive sales at
scale is through omnichannel distribution. And yes, as the best and most
memorable part of travel, experiences should sell themselves and to some extent
will, but to drive sales at scale businesses need to proactively promote them
to customers.
Tours and activities is a great sector with
which to be involved; millions of potential customers, across all nationalities
and demographics and a younger generation that is giving more importance to
experiences – interesting times, and, with all this in mind, I stand by
original statement – tours and activities is the most exciting part of travel!
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