Executive Q&A: Why the Future of Smart Travel Distribution Must Include Tours and Activities

Despite its sheer size, the tours and activities sector has often been an afterthought for travel agents and online travel agencies, especially compared to air and hotel bookings. While tours and activities do tend to garner high commissions, the space has been faced with a number of challenges: a main one being relevant, timely, and quality inventory.

Livn has set out to harmonize the traditionally fragmented tours and activities sector. The Livn API provides structured product content, availability data, metadata, terminology, and pricing, and it enables a unified way to book tours and activities products across the world. It focuses on automation, delivering real-time and immediate availability — two things that travelers will undoubtedly demand more of as travel starts to rebound after Covid-19. SkiftX spoke to Mark Rizzuto, CEO of Livn, to learn more.

SkiftX: Why should online travel agencies, travel agents, and travel resellers explore distribution beyond air and hotels?

Mark Rizzuto: The first reason is that commission rates have fallen for air and hotels because those suppliers have typically managed their own distribution structures. This hasn’t yet happened in the tours and activities sector, which can still garner high commission rates for online travel agencies and other resellers.

The second reason to focus more on tours and activities is that generally speaking, activities and experiences are what drive hotel and airfare bookings and the overall journey. People don’t go to Cairo to fly EgyptAir. They go to Cairo to see the pyramids or take a cruise down the Nile.

Additionally, local experiences are going to fuel consumer demand as travel picks up again, and tours and activities will play a big role in how people look at the destinations they feel comfortable traveling to.

SkiftX: Why does this make sense for travel e-commerce?

Rizzuto: There’s a series of about six phases for every traveler journey: the dreaming phase, the planning phase, the booking phase, the anticipation leading up to the trip, the actual en route journey, the time spent in the destination, before it goes back to dreaming when the traveler begins planning the next event. Each of these phases offers an extraordinary opportunity to meaningfully engage with customers from an e-commerce perspective. It’s about selling the right product at the right time, in the right way.

I also think a number of brands and industries are looking for secondary revenues, or are interested in being one-stop-shops for all experiences pertaining to a trip. Despite challenges, the OTAs have been the market leaders in structuring tour and activity programs. Other travel companies, such as airlines and hotels, are finally getting in on this as they realize that they should work to maintain an ongoing relationship with customers beyond the current sale.

SkiftX: What are some trends you’ve seen in the tours and activities sector lately?

Rizzuto: Obviously, the market leader has been Viator, and it has largely dictated what distribution looks like today. But the company has its own challenges — they recently announced that they’re enforcing new standards that would make it more user-friendly and efficient, opting for quality over quantity. Basically, they’re trying to clean up what has been a very messy space.

We also know that many of the tours and activities products on the typical OTAs — which are common search points for mobile users — are blocked out and can’t be sold within three days of departure due to lack of connectivity to last seat inventory.

Additionally, we’ve seen proprietary players enhance their own business models through a number of different methods, such as attempting to aggregate tours and activities by purchasing reservation platforms. But they are realizing they need more than one single reservation system to build up their distribution ecosystem, and many of these strategies have been reversed or have unraveled in the last few months. For example, in June, Booking.com sent notices to its tours, activities and attractions partners that it is terminating their contracts.

So to me, the biggest change in the space has been the focus of quality ruling over quantity, which hasn’t typically been the thinking.

SkiftX: How does Livn fit into the current tours and activities ecosystem?

Rizzuto: Our biggest differentiator is that we’re an open connectivity hub that anyone can use. We’re not a privately owned solution, and we’re not an OTA that built the technology for ourselves, nor do we own or manage any tour reservation system. We are the only company that allows travel companies to use our technical infrastructure to transact — connecting buyers with resellers of tours and activities — without interfering with their existing commercial agreements. Instead, Livn charges its resellers a small transaction fee for each booking that passes through the API. Instead of being tied to our rates — although we offer that option —
companies can use their own negotiated rates with tour operators.

In terms of content, we only offer live inventory. We made this decision when we entered this business in 2011. We also ensure that the content has a consistent look and feel, from the way the product is described, the imagery quality, through to how it’s geotagged. It’s also all geared toward mobile experiences. Our single API platform is connected to 23 reservation systems as of today, and we aim to triple that number by the end of next year. We’re so confident about our industry solution that we are using this time during Covid-19 to double down on our business.

SkiftX: Can you provide a specific use case for how Livn would work for a distributor?

Rizzuto: We just signed a long-term partnership with the Flight Centre Travel Group, one of the world’s largest travel agencies. We are their sole tech connector for their tours and activities bookings in an enterprise deal for their corporate divisions, online and mobile business models, and brick-and-mortar retail business.

Previously, Flight Centre travel agents made bookings via website portals, phone, and emails which were not integrated with invoicing or reporting systems. They had some APIs integrated into certain systems, but no two were the same. Their travel agents were going to multiple portals to transact and needed a code to go into each portal — the entire operation was very labor-intensive for both their in-house teams and tour operators.

Enter Livn. Our API enables a direct communication channel with the tour operators they work with, and they securely transact with them and continue to use their own negotiated rates. We’re simply the technology facilitator underpinning that commercial relationship based on automation and the ability to see live, available content.

SkiftX: How will this all help individual travelers?

Rizzuto: It all comes down to providing a mobile-first customer experience and enticing the customer with a rich suite of relevant products, led by strong — yet protected — customer data and trusted transactions. The traveler will be able to confidently price and book tours at any time before or during their trip, including on the same day of the activity. The key really is focusing on real-time availability and stabilizing the distressed inventory environment, which should garner better prices for the customer in turn. Fixing this aspect of the tours and activities sector will greatly improve the overall experience for travelers.

SkiftX: How do the effects of Covid-19 fit into all of this? Do you expect this solution to help with recovery of the sector?

Rizzuto: We’re all looking into our crystal balls right now. In my opinion, it’s going to be local, local, local for the next 12 to 18 months. Of course, there’s also a new demand for safe and hygienic experiences: social distancing, sanitization, masks, etc. There is also a shift occurring to digitization and automation, meaning less of a reliance on paper tickets and cash payments. Currently, many tours and activities don’t fit into those standards.

Fortunately, these customer-led demands all come at a time when the industry is finally starting to show signs of cohesion and standardization. At the same time, global economic pressures are forcing organizations to replace cost and operational inefficiencies with technology. The sector is transitioning into the same easy, reliable and accurate realm the industry has enjoyed for airline, car, and hotel sales, and Livn is uniquely placed in this space.

To learn more about how you can connect your business to a global network of tours and activities in real time, click here.

This content was created collaboratively by Livn and Skift’s branded content studio, SkiftX.

Check out Skift x Livn’s Tours & Activities 2020: A Year in Review content hub for related content.