Should operators of tours, activities, attractions, and experiences be raising their prices? Yes, says new data. What's more, this sector may sparkle the most among travel verticals in the industry's recovery.
New research suggests that tours, activities, and attractions will be one of the brightest spots in the travel industry’s recovery. Consumers say that price is the last thing they’re worried about when shopping for travel experiences this year — in a sharp switch from the past.
Travelers intend to spend 31 percent more than usual on attraction tickets this year and up to nearly double as much as what they’ve spent on walking tours in the past, according to data discussed at the ITB Berlin travel trade fair on Tuesday.
“It’s really clear that travelers want a lot more out of their experience in 2022, and they’re willing to pay for it,” said Douglas Quinby, founder and CEO of Arival, which surveyed 1,000 U.S. travelers.
Despite inflation worries driving headlines for other industries, travelers are eager to make the most of their first big trips post-pandemic. They’re signaling an intent to spend more than usual on in-person experiences.
“As context, when we asked travelers in 2019 what were the factors that drive your selection of one tour or activity over another one, itinerary or content was number one followed by price,” Quinby said. “When we asked about their intent in 2022, price basically dropped to the last consideration, with everything else mattering more.”
Bookings are recovering in the most popular U.S. and Western European markets, according to Emil Martinsek, chief marketing officer of GetYourGuide, when speaking on a panel at ITB Berlin.
“We’re seeing about 40 percent growth in revenue per customer compared with 2019 as they book travel via our platform,” said GetYourGuide’s Martinsek.
Data Shows That a Recovery Is Underway
Interest in day tours, such as a walk around a city center, has jumped. The survey found that 47 percent of surveyed travelers in 2019 intended to buy walking tours, compared to 71 percent for travelers planning trips this year.
“New York City is at 90 percent of 2019 booking levels via GetYourGuide,” Martinsek said. “San Francisco is at 94 percent, and Paris is at 75 percent. So you see a return to cities.”
Traditional iconic travel sites are also seeing a revival of interest.
“We’re seeing very high demand for places like [Germany’s] Neuschwanstein Castle, the [U.S.] Grand Canyon, French wine country, and Stonehenge [in the UK],” said Brad Weber, president of Gray Line Worldwide.
Shifts in Consumer Behavior
Another change in traveler behavior during the pandemic has been how they buy tickets. In 2019, the typical consumer going to a museum or other attraction would walk up same-day to the front door and buy a paper ticket. Now consumers are going online, often on their phones, to book tickets ahead digitally.
“We’re seeing 10 years of shifts in consumer adoption of online booking packed into an 18 to 24 month period,” Quinby said.
Attractions and other operators need to level up their digital games in response.
“We’re seeing a lot more early research but late booking, meaning that people are doing online research more often and earlier than before,” said Weber of Gray Line. “But they’re still booking last-minute.”
Some customers are also being more demanding and particular than in the past.
“We’re getting more pre-trip engagement from people booking with us where they’re reaching out after going deep on the online reviews and asking to guarantee they’ll get a particular guide or visit a particular vineyard on a wine tour,” Weber said. “Despite our reduced staff sizes, we’ve learned in the pandemic to be more agile and to make more decisions and adaptations on the fly.”
Enterprise Software Remains a Sticking Point
Not all operators of tours, attractions, and experiences have adapted the latest technologies, which may mean they are leaving some money on the table as consumers switch from walk-up bookings to digital channels.
“We really need to advance and encourage operators to use reservation systems to connect via APIs as opposed to, you know, pen and paper or other older methods,” Quinby said.
As consumers act more spontaneously, operators need to have systems to capture demand on short notice.
“Operators need to ask how they can deliver more real-time availability, pricing, and content,” Martinsek said. “You want to give online sales channels what they need so they can give consumers the flexibility they’re seeking.”
But the most immediate consideration for operators remains a need to focus on pricing first.
“Should the experience sector be raising prices?” Quinby said. “Probably the answer there is yes, especially given all of the inflationary pressures that we’re seeing that are driving up operational costs.”
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Photo credit: An October 13, 2021, hike in Barcelona along the Costa Brava Camino de Santiago in a walking tour led by Spain's Fresco Tours. Source: Fresco Tours via Flickr / Creative Commons. Flickr / Creative Commons