TUI/Musement's new strategic partnership with Booking.com has the potential to reshuffle the powers that be in tours and activities, especially in Europe. But TUI doesn't have a stellar track record in online offerings, and much of the promise will depend on its execution.
Booking.com sent notices to its tours, activities and attractions partners that it is terminating their contracts as of June 30, Skift has learned.
“As separately described in correspondence with Booking.com’s Partner Services representatives, we aim to continue to enable you to offer your supply via Booking.com through our strategic partnerships and look forward to displaying your attractions in the future,” the Booking.com notice said in a addition to the termination disclosure. “Thank you for your valuable partnership with Booking.com.”
The contract terminations are a precursor to Booking.com handing the keys to much of its experiences business to TUI’s Musement and eventually additional strategic partners, as Skift exclusively reported in early March, and as announced by Booking.com and Musement this week.
The strategy shift began late last year. Before then, Booking.com had been trying to build its own tours and activities business, anchored by its 2018 acquisition of tours’ distribution provider FareHarbor, and found the competition too stiff, and the build-your-own strategy too tough.
The deal to sign TUI’s Musement as Booking.com first new strategic partner in the experiences sector is a big win for Musement, which may now be able to start to challenging bigger players such as Viator, GetYourGuide, and Klook, especially in Europe.
According to a source close to Booking.com, one factor that contributed to the Booking.com-Musement deal coming together was that Musement would be required to share tours and activities supplier leads with Booking.com’s FareHarbor, a tactic that would be reprehensible to some operators.
“The problem comes in when Musement is sharing thousand of leads with FareHarbor, including contact people and booking system details), and FareHarbor contacts those suppliers and convincing them to leave the Rezdy’s and Bokun/Tripadvisor and those players,” the source said.
Bob Gilbert, formerly head of business development in the United States for FareHarbor competitor Rezdy, expressed similar concerns.
“There were many concerns voiced surrounding the Fareharbor acquisition by Booking.com just over two years ago,” said Gilbert, CEO of Captivation Marketing, which counts Rezdy as a client. “One major concern was the internal sharing of supplier information between the two businesses. That was vehemently denied.”
But Gilbert argued that lead-sharing, after the Covid-19 crisis, is possibly a new strategy.
“I believe tour and activity companies who were skeptical two years ago will be justified in being even more concerned today,” Gilbert said. “My recommendation to those suppliers is to choose your partners very carefully and work with truly independent booking software providers with extensive distribution.”
Asked to comment on Musement sharing business leads with Booking.com’s FareHarbor, TUI spokesman Martin Riecken declined to answer, and instead commented: “We are open to onboarding additional FareHarbor suppliers that are relevant to both Booking.com and Amusement/TUI, and distribute them through our channels.”
Will the transition from direct contracts with Booking.com to pacts with Musement instead include a new business model or terms? Riecken didn’t get into the details. “We already work with multiple partners and intend to contract additional suppliers on the Musement platform and distribute them through Musement, TUI, Booking.com and our other distribution channels,” he said.
Booking.com hasn’t confirmed or denied the lead-sharing arrangement.
[Update: We asked Tripadvisor/Viator how the brands handle the leads’ issue regarding the their in-house tour-tech provider Bokun.
“Operators who sign up for Viator may receive information from Viator introducing them to Bókun as a reservation management center option,” Tripadvisor stated.”Whether operators choose to explore Bókun further has no bearing on their Viator or Tripadvisor Experiences account status.
“Bókun does not share operator or customer data with Viator or Tripadvisor. Viator and Tripadvisor account managers may use aggregated data to assess operations, but we do not share specific Bókun operator or customer data with Viator or Tripadvisor.”]
Arival reported Wednesday that Booking.com will no longer offer direct contracts with tour and activities operators, but didn’t disclose the notice that contracts would end June 30.
“The decision to use another OTA (online travel agencies) to power tour and attraction content indicates that Booking may pursue a more ‘hands-off’ strategy with experiences, an approach it has adopted with other non-accommodation travel products,” the Arival story said. “Booking.com has used Kayak, Priceline, or other travel sites owned by its corporate parent for flights.”
Note: This story has been updated to added comments from Tripadvisor.
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Photo credit: Booking.com has terminated contracts with attractions operator pending a new partnership with TUI's Musement. Pictured is a file photo of a Boston movie walking tour from February 23, 2006. Smart Destinations / Flickr.com