Skift Take

It seems like everyone in hospitality (and travel in general) is looking at the tours and activities space these days.

Marriott International wants to connect its loyalty members to even more in-destination experiences, and to do that, it has made an equity investment in a tours-and-activities metasearch platform, PlacePass.

The Cambridge, Mass.-based, two-year-old startup lists more than 100,000 experiences in 800 destinations worldwide from various vendors and eventually, all 100 million members of Marriott’s three loyalty programs — Starwood Preferred Guest (SPG), Marriott Rewards, and Ritz-Carlton Rewards — will be able to access those experiences through Marriott’s various direct channels, including its sites and loyalty apps.

While special experiences have long been a cornerstone of the SPG program’s Moments, and most recently with the Marriott Rewards’ Experiences Marketplace, this investment in PlacePass signals Marriott’s desire to get even more involved in the largely fractured and untapped area of in-destination tours and activities. These bookable activities from companies such as Viator and GetYourGuide through PlacePass will augment the number of experiences already being offered to Marriott’s loyalty members.

“Today and more than ever, travelers want more memorable, personalized experiences,” said Stephanie Linnartz, global chief commercial officer for Marriott International. “That’s what consumers want today. When we think of Marriott now being a company with 30 brands and more than 6,000 hotels worldwide, we have more breadth and depth in offering different experiences at the hotel level. Different brands and location.

“Building upon that, we want to build on the loyalty platforms, including SPG Moments and Marriott Experiences. Last year alone, consumers used points for over 6,000 events or experiences in those programs. With this, we’re getting deeper into local experiences, and we’re building on the track record of the Starwood acquisition by making this investment in PlacePass.”

Marriott and PlacePass did not disclose the amount of Marriott’s equity investment, but PlacePass co-founders Ethan Hawkes and Emily Bernard, who serve as CEO and chief brand officer, respectively, said Marriott is leading the company’s Series A round with participation from seed investors, and that the round has not yet closed.

“The amount gives us enough runway to build on this,” Hawkes said. He also noted that Marriott “found us” and that the two companies began communicating toward the end of last year.

Why Marriott — and Everyone Else — Wants a Piece of Tours and Activities

As Skift noted in its 2017 Megatrends in Travel, this is a pivotal year for the tours and activities space as more companies look for investments and expansion into this potentially lucrative, but rather fragmented, business. Last year, perhaps the biggest news in this space was the launch of Airbnb Trips in November, offering curated peer-to-peer travel experiences.

Tours and activities make up a substantial piece of the travel spend pie but in many markets, it can be a challenge for consumers to find experiences to book, both before and during their actual trips. And it’s also a challenge for suppliers to make sure they’re marketing the right types of trips to travelers as well.

Olan O’Sullivan, vice president of marketing for TrekkSoft, a Swiss-based company that helps tour operators and activity providers with online bookings and management software, said Marriott’s choice to invest in a metasearch platform like PlacePass is an interesting move.

“No one has cracked metasearch in the experiences level of inventory — a lot of it isn’t in these kinds of platforms like you would have in a hotel,” O’Sullivan said. “The customer has to do a lot of work, and the buying profile is different. You typically book three paid experiences, with one booked in advanced and the final two booked when they actually get there. The challenge is when they arrive because a lot of companies aren’t live, meaning they can’t make a live booking within 48 hours of that tour.”

Hawkes said, “This is going to be a hot space in travel over the next 10 years. The shift from offline to online in tours and activities hasn’t moved there yet completely, but it’s happening incredibly rapidly now. The industry is quickly maturing and there’s this massive shift of $150 billion moving offline to online, and changing how customers expect to find and book things to do. What we’ve been able to do with this aggregated product of ours wasn’t possible much earlier because the systems weren’t sophisticated enough to enable it. That’s changing really rapidly now, and this is helping to reinforce customer behavior of booking online.”

O’Sullivan added, “This is a sensible route for Marriott if PlacePass has significant inventory. They themselves will not be great at selling experiences. They [Marriott] are selling accommodations, and using a platform that can provide them with a lot of inventory is a smart way to go about it. The challenge for metasearch provider is to get more access to inventory and that inventory isn’t always available.”

Linnartz said that the scale and inventory of experiences displayed on PlacePass was a big draw for Marriott.

“Because of their structure, they are able to scan hundreds of travel and tour operator websites to find the best price, and they’re adding new experiences every week,” she said. “That scale and depth and grasp of activities — that what’s really important for a company like Marriott. Because we’re so big and diverse, we need a partner who’s big and diverse enough, so wherever possible, we can offer them something in the destination they are going to. Size and scale. As you can imagine, we do our due diligence, and the PlacePass team is a fantastic team of individuals and a well-run organization, that goes without saying. They are a very sound company, too.”

How This Will Work

Details of how this integration will eventually take place are still being worked out, said Bernard and Linnartz. The basic premise, however, is that all loyalty members will be able to book tours and activities via PlacePass through all of Marriott’s proprietary digital channels, either before their trip or during it, and possibly using loyalty points as well. Concierges at each of its hotels will also be able to book guests’ activities, too.

Linnartz said Marriott wants to make sure that it markets the right kinds of tours and activities from PlacePass to the right loyalty members, too.

“We will increasingly use data on consumers to offer them up things that are very personalized to them,” she said. “We know about our loyalty members, and we know information about our top customers. This won’t just be a link to 100,000 activities. We’ll help curate that list and offer things up to people based on where they are going, and based on what we know about them. We will have a highly, highly personalized experience when you come to our website and interact with our ecosystem.”

You won’t have to be staying in a Marriott property to have access to these activities, either.

“We want people to engage with us even if they’re not staying in a hotel,” Linnartz said. “Let’s say you have a lot of loyalty points and want to do something in your own hometown. You can go into the app and use it to book and experience.”

Linnartz also noted that SPG Moments and Marriott Rewards Experiences aren’t going away either, as noted by newly appointed SVP of loyalty, David Flueck, who said experiential travel will be a cornerstone of the combined Marriott loyalty program scheduled to debut by 2018.

“Eventually, when we put all the loyalty programs together, those two platforms [Moments and Experiences together with PlacePass] will come together,” Linnartz said. “Guests will have both options and plans are to use points across both.”

Marriott is hopeful this investment will lead to even more partnerships and an even bigger loyalty membership base — it’s all a part of its master strategy plan centered around loyalty.

“Something like this is another example of creating stickier value to our customers and this is a big opportunity to deepen our relationships with our 100 million members. The more we can grow our membership base, the more we can attract partners. It’s a snowball effect. It goes back to why we thought the Starwood deal was such a good deal for Marriott International.”

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Tags: marriott, metasearch, tours and activities

Photo credit: Whale watching in Akureyri Fjord, Iceland is just one of thousands of tours and activities people can find via PlacePass, a metasearch platform for tours and activities. Zeb Goodman / PlacePass

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