Do locals spend more money on at-home activities than travelers spend on in-trip activities? The answer isn't as pressing as the fact that most of the world's activities are still up for grabs by booking platforms.
Hundreds of the travel industry’s most-forward-thinking executives will gather for our third annual Skift Forum Europe in London on April 30. In just a few years, Skift's Forums — the largest creative business gatherings in the global travel industry — have become what media, speakers, and attendees have called the “TED Talks of travel.”
Focusing on responsible travel practices and other key issues, Skift Forum Europe 2019 will take place at Tobacco Dock in London. The Forum will feature speakers, including CEOs and top executives from British Airways, IHG, Thomas Cook, Booking.com, TripAdvisor, Silversea, Uber, and many more.
The following is part of a series of posts highlighting some of the speakers and touching on issues of concern in Europe and beyond.
By and large, travelers are no longer forced into booking tours and activities on site, on paper, with cash, just moments before taking part in them. Booking online is now common — not necessarily far in advance — but do people consider activities to be a “lead product,” or worthy of as much consideration as flights and hotels?
Activities make or break a trip, and should be researched and booked accordingly, said Tao Tao, co-founder and chief operating officer of Berlin-based tours and activities booking platform GetYourGuide. A great many travelers don’t stay in the high-end boutique hotels that are really Instagrammable — they brag about more accessible experiences, like going up the Empire State Building at sunset.
The activities sector is strong these days; TripAdvisor is still a lead player with Viator, which it acquired in 2014 for $200 million. However, GetYourGuide secured a $75 million Series D funding round in November, the sector’s largest single fundraising amount to-date, led by Battery Ventures. GetYourGuide has now raised $175.5 million total since its founding in 2009. Tao wants the company to keep growing under the vision of its founders and said it’s premature to think about getting acquired.
Though GetYourGuide has competitors like Peek or Klook, or even Airbnb Experiences, Tao said there’s ample room for everyone to grow, mostly because the vast majority of the world’s activities aren’t bookable online yet. It’s not the size of GetYourGuide’s slice of the pie he thinks about most; it’s that the pie can be so much bigger.
Speaking of a bigger pie, GetYourGuide seems amenable to going further with sporting events in the future, especially to iconic places like Fenway Park that attract travelers in addition to locals.
At Skift Forum Europe in Berlin on April 26, GetYourGuide’s co-founder and chief operating officer Tao Tao will discuss the future of booking activities.
Skift: Let’s talk about tours and activities as a lead product. For example, I’m planning a trip to the Midwest. Because I am who I am, I have my activities booked well ahead of time — but I’m not most travelers. What do you say to people who question the viability of tours and activities as a crucial product that you book in advance?
Tao Tao: Travel used to be divided into what you book pre-trip, what you book on-trip. I think this entire notion was founded because mobile was not readily available. And so, only what was pre-bookable was going to be digital in a viable business.
That was actually the reason why when we started our business back in 2009, people were saying two things. One: It’s too fragmented. Two: This is always going to be an offline product.
Personally, when I book my activities, I usually book them at the breakfast table. So you could argue, is that planned? Sure, I planned my day. But it’s not the traditional concept of planning.
I think when we think about what it means to lead the trip, it’s not so much about whether it’s pre-planned or booked in-trip, I think we don’t care about that. In fact most of our activities are booked in-trip.
What are the things you actually remember from the trip? If you did take a cooking class, saw the Sistine Chapel, maybe went shark diving, and that creates what we think in the long term is stronger brand attachment than the bed you slept in.
Skift: Agreed. Not that people don’t Instagram their hotels.
Tao: Very few privileged people get to stay in hotels that are Instagram-worthy. However, the majority of us travelers can all take a selfie from the Top of the Rock. I think that’s very accessible to everyone. That’s definitely much more memorable than maybe my two-star motel with 12 square meters.
Skift: So I have two activities booked for my upcoming trip. One of them is not one that you really trade in: tickets to a Minnesota Twins game. The other is touring Paisley Park, which would be something you’d see on GetYourGuide.
Tao: Paisley Park, for sure. The Twins game, who knows when? So I think you have to limit the scope. We’re not in the business of selling only major attraction tickets and hop-on hop-off tours. We’re in the business to try to capture as much of the fun part of your trip as possible.
Skift: So you’re open to getting more into sporting events?
Tao: Not currently. We do have some of those. I know we have some Premier League games in some cities. Because ultimately it has to be a touristic thing. So if I’m in Berlin and somebody comes to Berlin, I don’t expect them to want to watch the Berlin games. They’re just horrible. But if somebody goes to Munich, or Milan, or London, or Barcelona, then sure. A Barca game is as iconic as the Sagrada Familia, probably.
Skift: Some people question how much money you can make selling activities just to travelers, without focusing on locals. What do you say to the idea that travelers aren’t lucrative enough?
Tao: There are two answers. One is market research, one of which you guys have done. We’re trying to be very data-driven. If all of the market research says it’s a big market, then okay.
I would actually claim that the travel market for activities is much bigger than the local one. So first of all, not everybody lives in New York City. Some people do live in … I’m not gonna shame cities now. So some people live in other places. And they don’t have as much. Also I’d ask people to think about the last six weekends, what did you do? There will be a lot of drinking, a lot of eating, and maybe a movie. If you have kids then there might be a zoo visit, too.
That’s not a lot of activities. I do more in one road trip than I did in the last eight weeks in Berlin.
Skift: What do you think of Airbnb Experiences and do you consider that a threat?
Tao: TripAdvisor, Expedia, GetYourGuide, Airbnb, all the startups, everybody together comprises maybe 2 percent market share of the global market, in terms of what is actually transacted.
None of us should be worrying about taking some market share from each other, but rather how to grow the 2 percent to 20 percent, and the 20 into 60 percent, and then each of us taking 10 percent. Or half taking 60 and everybody else maybe not take anything. I think: how can we increase the pie?
On the purely competitive side, I think Airbnb is very much focused on a subsegment of the broader activities space. I would say very focused on this experiential personal learning, a little bit off the beaten path, but certainly a very authentic type of experience. Whereas we try to offer both the iconic experiences like the Eiffel Tower visit or Empire State Building visit and those authentic experiences.
Skift: You just secured a massive funding round. What do you think about the possibility of GetYourGuide being attractive to a larger player like TripAdvisor for acquisition?
Tao: One angle is we have a fiduciary responsibility to shareholders. Which means that you cannot just say, “No, we will never be for sale.” That would be irresponsible. I think with that said … going back to the fact that less than 2 or 3 percent, depending on how you cut the market, is transacted online and aggregated, it’s so early for anyone. Given our funding, our growth rates, everybody sees themselves in the pole position, but we see ourselves in the pole position.
I think it would be premature. And I try to think about the opportunity we can realize on our own versus the opportunity we can realize within another corporation. I think there are very positive examples of booking on companies like Priceline. According to the largest business, that is a possibility. I do think, however, there are more counterexamples of where a company has maybe rather slowed through an acquisition.
As founders, we would not want to compromise on our ability to shape our vision, which is re-transforming this entire space. And so I don’t think we would foreclose any of these options in general. But I think our goal certainly is to remain independent and build the largest company that we can. And part of the reason for funding is that we need to do that.
Skift: In November, GetYourGuide’s CEO said the company is profitable and the plan is to remain independent for now, but maybe go public later on. Can you say anything about where exactly you are on the road to an initial public offering?
Tao: Generally we wouldn’t comment … So even if we were to go public I think in half a year, I think we wouldn’t say it. … There is the question of timing. And I think right now it’s a really great market for fast-growing private companies. We want to make sure that we always weigh the pros and cons of a public listing.
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Photo Credit: Tao Tao, co-founder and chief operating officer of GetYourGuide, will speak about the future of the tours and activities space at Skift Forum Europe in Berlin on April 26, 2018. GetYourGuide
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