After missteps in thinking it could grow its own attractions business and catch larger competitors, Booking.com's relaunch is the next stage in its evolution. The tours and activities sector is a lot more competitive now than it was even two years ago when Booking acquired FareHarbor. Hence, the need to reboot.
Booking.com has quietly rolled out its new attractions business in partnership with Tui’s Musement brand, Skift has learned.
In a July 31 memo obtained by Skift, Booking.com Vice President of Attractions Lawrence Hester informed staffers that its new attractions’ homepage went live a couple of weeks earlier with 400 attractions in 20 destinations. Musement powers Booking.com‘s relaunched attractions category.
“So in March, we paused all of Attractions’ online presence,” Hester wrote after noting that the pandemic forced the “complete shutdown of attractions, tours and activities in most countries around the world.”
Prior to partnering with Musement in March, Booking.com offered thousands of attractions on its own globally. It had started to restructure its attractions business late last year because it realized the “build-your own” strategy was way too slow, and wouldn’t enable it to approach the scale of much-larger competitors such as Viator and GetYourGuide.
Hester said in the memo, which was entitled “We’re Back! Attractions Relaunch on Booking.com,” that Booking.com only onboards new attractions once “we are 100% confident” that Musement has checked to ensure that operators are following health and safety protocols.
“While this has meant smaller numbers of attractions available in this phase of the rollout, we expect the number of destinations to increase in the current weeks,” Hester wrote.
Hester informed employees in the internal memo that the relaunch will eventually provide greater choice to customers, expand the number of destinations, and feature “compelling offers through competitive pricing and prime attractions.”
The Upside of Attractions
Speaking in September at a Deutsche Bank conference, Booking Holdings Chief Financial Officer David Goulden said the attractions business is not nearly as profitable as accommodations, but attractions are strategic because they can increase repeat visitor numbers.
“The core strategy is to extend our lead in accommodations,” Goulden said. “That’s where we make our money. That’s where we’ll continue to make our money — most of our money even as the connected trip gets rolled out into its full phases. We view these other verticals as providers of incremental margin, but importantly, it’s that loyalty and the frequency that they will create.”
Booking.com had terminated its contracts with tours and activities operators June 30, and referred them to Musement to sign new agreements.
With the relaunch on Booking.com, when you book an attraction, such as a one-hour canal cruise in Amsterdam, the entire user experience takes place on Booking.com, although the confirmation email from Booking.com says it is “Powered by Musement.”
There are two facets to Booking.com’s attractions business — the traveler-facing tours and activities offering, now powered by Musement, and the behind-the-scenes attractions software and connectivity business operated in-house by Booking’s FareHarbor.
It’s unclear how the attractions business would be impacted by Booking.com’s Tuesday announcement that it began the process of cutting up to 25 percent of its workforce. When it comes to the FareHarbor unit, though, it doesn’t seem to be impacted by the job cuts, although there is a hiring freeze, according to a source close to the company.
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Photo credit: A tour boat in Amsterdam, the Netherlands, as seen on October 21, 2015. Booking.com now offers tours like these through a partnership with TUI's Musement. Mike Bonitz / Flickr.com