TripAdvisor and Booking Holdings are seemingly playing nice and fair with the tours and activities companies for now, but what happens five years from now when competition gets more intense and extracting profits is more of a mandate? Will push come to shove?
When large online travel companies such as TripAdvisor and Booking Holdings own the software companies that bring tours and activities operators online, should the tour operators look for independent providers instead?
GetYourGuide, the largest tours and attractions company in Europe, cautioned last week that the consolidation of such ownership under TripAdvisor and Booking Holdings last year represents a grave threat to tour operators, but a TripAdvisor executive accused GetYourGuide of engaging in “fear-mongering.”
Ben Drew, TripAdvisor’s vice president of business development and strategy, rentals and experiences, told Skift Wednesday that GetYourGuide’s accusations “were unfounded,” and that it is actually advantageous for operators that TripAdvisor brought Bokun in-house last year because its investments in the company ensure stability.
Drew said Bokun now operates on three continents, instead of merely from its former Iceland base, and its number of employees has increased five-fold. That would bring its staff roster to around 100.
Bokun’s difference in scale post-acquisition “is enormous,” Drew said.
Drew pointed to high-profile insolvencies — presumably he had Zerve in mind — among tour operator tech and distribution providers, arguing that TripAdvisor’s investments in Bokun diminish that threat.
Have No Fear
Johannes Reck, co-founder and CEO of Berlin-based GetYourGuide, isn’t buying TripAdvisor’s arguments.
“We’re not fear-mongering, we’re stating the obvious,” said Reck. “TripAdvisor and Booking.com are running these systems at a loss in order to capture and monopolize data from tour operators. This is not in suppliers’ best interest, so we’re offering them a way out.”
Reck has advised tours and attractions operators about the risks inherent in transferring company data to a single online travel company.
GetYourGuide has unveiled a preferred partners program, offering the services of Rezdy and Bookingkit at “up to 40 percent savings for GetYourGuide suppliers.”
Drew of TripAdvisor said Bokun does not share operator or customer data with account managers although aggregated data is accessed by managers to assess operations. Nor does TripAdvisor give listings preference to Bokun-connected operators over tour companies that might connect through to TripAdvisor or its Viator tours and activities brand through FareHarbor or Peek, for instance.
Drew charged that GetYourGuide’s new preferred partners program suffers from a lack of transparency about the relationship between Bookingkit and Rezdy, and GetYourGuide.
“Our Preferred Partners program is fully transparent,” said Reck. “GetYourGuide does not own an equity stake in either Rezdy or bookingkit — and the advantages for suppliers are equally clear. We’re offering competitive pricing incentives, and our tech teams are already collaborating on developing new features, troubleshooting known pain points and finding solutions to improve connectivity quality across our space.”
Drew argued that GetYourGuide “is a little late to the party” in terms of TripAdvisor having acquired Bokun, and Booking Holdings having picked up FareHarbor in 2018.
There have been whispers that perhaps GetYourGuide is advocating independence for the software companies that bring tour operators online because GetYourGuide can’t afford to make an acquisition. Booking Holdings, for example, paid $249 million in cash and stock for FareHarbor last year; TripAdvisor’s purchase price for Bokun was much lower.
However, GetYourGuide has raised more than $650 million in venture capital funding.
“I think any reasonable observer would agree we can afford to buy one of these systems if we chose to,” Reck said. “But we’re not going down that path, because it’s not in the interest of customers or suppliers to be locked into a specific ecosystem.”
Drew of TripAdvisor argued that GetYourGuide’s new stance has had little impact in the market, adding that these kinds of competitive eruptions happen from time to time.
What both companies would agree on are that these are early days for the sector. TripAdvisor estimates that perhaps 80 percent of tours and attractions operators still conduct their businesses offline, and that many will transition to online booking options.
Whether operators decide to hitch their fates to the TripAdvisor or Booking Holdings-owned tour tech companies or opt for independent providers is the crux of the argument.
Correction: We corrected the story headline, which originally referred to TripAdvisor and GetYourGuide as partners. Their partnership ended several years ago.
Correction: Booking Holdings is the large online travel company that owns a tour software company, FareHarbor. Not Bokun.
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Photo Credit: Pictured are tourists in Rome. TripAdvisor and GetYourGuide have been debating the best connectivity and distribution strategies for tours and attractions operators. Associated Press
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