Lots of talk about profitability but very little intention of going public. These are the emerging trends we're keeping an eye on for these three key tours and activities online platforms.
U.S.-headquartered Viator, Germany-based GetYourGuide, and Asia’s Klook all made significant moves over the past year. Their biggest competitor was offline bookings, given that only 30% of the $1 trillion tours and activities market is sold online, according to Skift Research.
As these companies’ valuations and bookings soar, Skift notes their 2023 milestones below and also spotlight key developments we’re eyeing for 2024.
Viator Bets on Profit
Tripadvisor has said its experiences brand, Viator, will hit full-year profitability on an adjusted EBITDA basis in 2024.
Viator’s growth in experience sales and Tripadvisor’s AI-based experiences and dining planner have helped. CEO Matt Goldberg said Viator saw a 41% increase in revenue between June and September, accounting for nearly half of Tripadvisor’s quarterly revenue.
Tripadvisor’s AI-based trip planner Trips, launched in July, also led to higher customer engagement and revenue. Goldberg said that users who create “Trips itineraries” generate three times more revenue than those who don’t.
Tripadvisor and Viator offer 300,000 bookable experiences in 250,000 destinations between the two brands. Most of these experiences come from Viator. Ongoing investments in marketing to acquire new customers had weighed on profits – adjusted EBITDA was negative $15 million across the first three quarters of 2023.
Viator’s listings-management program, Accelerate, boosted Tripadvisor’s third-quarter results. The company expects to see more of this in 2024 partly because it has since upgraded the Accelerate tool, with changes made widespread in November 2023.
Sarah Dines, Viator’s chief commercial officer, said the Accelerate program has “played a critical role” in the record-breaking growth seen in the third quarter and the $3 billion in gross bookings generated on the platform this year.
One of the main differences between the new Accelerate and its first version is a change from a visibility score — which some operators called confusing — to an advertising impressions metric.
If an operator pays a 26% commission, it might generate 60 ad impressions a month. But if it paid a 31% commission, it might generate 180 ad impressions a month.
Dines said that enlisted operators had found the updated Accelerate interface more helpful. “This reimagined version delivers what operators asked us for: a clearer view of what you get for what you give,” said Dines. “We’ll show you the ad impressions you can expect to receive for the commission you’re offering. And how that compares to competitors.”
“The majority of [revenue] has gone back to operators,” she said, “with the remainder invested in our marketing efforts to drive demand and our platform to improve the traveler experience and help operators get even more bookings.”
GetYourGuide Taps Into AI
In 2023, GetYourGuide again retained its title as the most heavily funded travel experiences platform. The company raised an additional $194 million in June, pushing its total investment over $1 billion — and its estimated valuation to $2 billion.
Offering 118,000 experiences in 150 countries, GetYourGuide sees its core focus as spotlighting rare experiences, with generative AI tools expected to improve the discoverability of these tours and attractions for its customers.
CEO Johannes Reck sees search evolving to richer content, eventually leaping beyond boring text search boxes. Reck expects his team to find savvier ways to gather customer data. GetYourGuide will train its AI large language search models on this enhanced customer data to pinpoint traveler preferences. The data may also be fed back to tour operators to help shape future experiences.
However, GetYourGuide’s prototype AI-generated itinerary doesn’t quite capture this vision. So, expect more testing in 2024.
Investors also remain curious about GetYourGuide’s plans to go public. But an IPO is unlikely to happen in 2024.
Nils Chrestin, chief financial officer, said the company can unlock “unforgettable memories and experiences for its customers and be a reliable partner for its suppliers” while remaining a private company.
“It is certainly an option for us,” Chrestin said. “But at this point, it’s neither a necessity for us to fulfill our vision and long-term goal to become the undisputed global market leader.”
Klook Looks to Gen-Z
Klook closed the year with a $210 million raise in December and over $3 billion in annualized bookings year to date. As Southeast Asia’s largest experiences marketplace, the company also hit profitability this year, according to CEO Ethan Lin. As a private company, Klook doesn’t disclose its financials.
Lin added that Klook is now servicing twice as many new customers as it did in 2019.
In 2024, Klook aims to continue its investment in tech and AI-driven travel planning tools.
Kai, an artificial intelligence chatbot, and the Klook Kreator program for social media influence and connection, each cater explicitly to its younger demographic. (Its customers have an average age of 27 years.)
Lin expects tours and experiences to evolve to meet the adventure-driven, fast-paced preferences of its mainly Gen Z customers, who he described as “experience hoppers.” This type of traveler uses city passes, for example, to see as many places as possible in a single day to maximize their photo-taking opportunities to share with their friends.
Klook stands out for having a broader array of inventory that goes beyond day tours, such as food-themed walking tours, for which its rivals are best known. It has tapped into demand for mega events and festivals, such as by being a preferred partner for the recent Taylor Swift concert held in Singapore, where 60% of the audience crossed inter-regional borders to attend, said Lin.
Klook has also been selling tickets to theme parks and attractions, cashing in on interest in travel experiences linked to entertainment and pop culture. The agency has secured launch partnerships for Disney Hong Kong’s Frozen theme park and the Warner Brothers Studios opening in Japan.
The online agency has also built up its inventory in outdoor activities and adventure tourism, such as through PADI diving and certification partnerships that act as a drawcard for younger or sporty travelers.
While an IPO is considered a future milestone, Lin added that the company is currently focused on strengthening its market position and ensuring readiness for when market conditions are favorable.
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Photo credit: A group of adventure travelers river rafting. Shivoham Yoga School / Flickr