T&A's love-hate relationship with the internet continues. They love the online reviews, but are reluctant to use the internet as a distribution channel.
Last week we launched the latest report in our Skift Research Reports service, State of Tours and Activities Tech 2017.
In this research report we explore the latest developments in the tours and activities segment. While the migration towards online has begun, some companies are still wary about the internet as a distribution channel. Although reluctant to make their supply available online, internet reviews were providers’ favorite marketing channel.
Below is an excerpt from our Skift Research Report. Get the full report here to stay ahead of this trend.
Although tours and activities providers are warming up to the idea of selling their offerings online, online travel agencies (OTAs), travel booking technology companies, and other distribution channels still face challenges engaging, simply because many tours and activities providers still don’t seem convinced that online booking is the way forward. Interestingly, this is not because of the additional cost of working with OTAs versus selling tours oneself.
In fact, while many OTAs and tours and activities marketplaces charge around 20 percent commission, travel agents and inbound tour providers often charge equal or higher rates; around 68.4 percent of tour providers feel that commission rates are fair, according to Rezdy.
Some tours and activities providers view tours and activities marketplaces/OTAs as not impactful enough, ranking them as the third-least effective marketing channel (only printed media and word-of-mouth were ranked as less effective options). On the flipside, review websites were ranked as the number-one most effective marketing channel, presenting great opportunities for OTAs who wish to tie up with peer review websites.
Not surprisingly, Viator may very well continue to dominate, especially now that it has been acquired by TripAdvisor, the undisputed market leader for travel reviews and a major driving force for referral traffic. However, while TripAdvisor appeals most to travelers looking to book a trip to a new destination, locals often rely on different review sites — such as Yelp or locally specific platforms — to read peer reviews, presenting an interesting opportunity for partnerships.
Partnerships are equally important for mainstream OTAs, most of which have traditionally focused on flights and hotels without paying much heed to the tours and activities market. “OTAs don’t want to take on the complexity and effort involved in working directly with thousands of SMB tour operators,” says Ruzwana Bashir, co-founder and CEO of Peek. “So they see the opportunity to partner with platforms like Peek that have already aggregated inventory across tour operators, and can also provide direct API integrations to enable updates on availability in real time with instant booking confirmation.”
While traditional OTAs provide huge potential for distribution channels and tours and activities marketplaces, there are plenty of other potential partnership channels that distributors may wish to explore. These include guidebook websites, travel magazines, blogs with large followings — pretty much anywhere on the web that travelers visit to inform their travel-planning decisions. Viator already does this with a large number of channels, such as Lonely Planet, which has been offering Viator’s tours on its site for over a decade.
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Photo credit: Viator is one of the more sophisticated booking sites for tours and activities companies. Viator / Viator