Viator is one of the most prominent players in selling tours and activities online. Still, most consumers remain unaware of its extensive offering, underscoring the opportunity for the experience economy in 2024.
Viator drives the experience booking offering of its parent company, Tripadvisor, with a portfolio of over 300,000 offerings. Still, its market research shows that most leisure travelers are unaware of the brand.
“Most of them don’t know it even exists, never mind the name Viator. So that is the challenge,” said Ben Drew, Viator’s President. Drew joined Skift Head of Research Seth Borko Tuesday to unpack the experiences sector at Skift’s 2024 MegaTrends reveal in New York.
For Drew, changing that perception is crucial, even if it means working with competitor platforms like Google and other online travel agencies.
“They certainly send us a lot of traffic and they are very good at presenting our product options,” said Drew. “On the other hand, they’re also somewhat competitive to us because we also are a search and discovery platform. So we have taken the decision to partner with them, to cooperate and sort of helped shape the product that they’re using.”
“We have this incredible opportunity to shape how travelers see this entire category,” said Drew. “It’s not just our opportunities, it’s the opportunity of every player in the experiences space.”
1% of a Billion-Dollar Experiences Sector
Viator generated $1.1 billion in gross bookings in the third quarter. However, Viator estimates it captures only about 1% of the experiences sector — forecasted to be $300 billion by 2025.
Viator hasn’t been profitable, but Tripadvisor CEO Matthew Goldberg indicated in the last earnings call that Viator is poised to reach full-year profitability by 2024.
“The reason it isn’t profitable today is because we are making a conscious choice to invest in growth,” said Drew. “Whether that’s through marketing or through product or through any other of the levers we have at our discretion, we’re making a conscious choice to pull those levers, and that’s resulting in the growth.”
“This is a long-term game; a big business will be built in this space. We think we’re the ones to do it, and we see long-term margins that are comparable to OTAs. So it’s well worth investing in,” said Drew.
Experiences Driving Travel Decisions
One key trend Viator sees is the importance of experiences in shaping travel decisions. Drew highlighted a change from last-minute booking patterns to an earlier booking window and a willingness to travel long haul.
“We’re seeing people willing to take longer haul travel and book it further in advance, which is a great sign for the health of the market as well because it means there’s confidence in their ability to take long haul trips,” said Drew.
“We’re seeing early booking windows, so the distance between booking and travel is lengthening. That’s an interesting trend actually because largely we saw it going in the opposite direction. Historically, people in destination were booking last minute, on either their mobile, web or the app.”
“We’ve seen this year it’s going in the other direction, and long haul is part of that,” said Drew. “But also this idea that experiences is starting to define where and when people travel is taking hold a little bit, and experiences are a key driver of why people traveled in the first place.”
Added Trends Viator is Seeing:
- Regional Destinations – Asia-Pacific Focus: There’s significant growth in Asian destinations, particularly Japan and Taiwan. This growth reflects a combination of pandemic recovery and organic market expansion.
- Outdoor and Adventure Experiences: Post-pandemic, outdoor destinations, including Alaska’s national parks, continue to surge in popularity as travelers seek experiences like rock climbing in nature.
- Urban and Cultural Experiences: A renewed interest in urban exploration. This includes famous city landmarks and cultural attractions.
- Famous Attractions in Major Cities: Despite the rise in unique and offbeat experiences, traditional tourist attractions, like the Louvre in Paris, continue to be popular among travelers.
- Learning and Skill-Based Activities: Categories such as cooking classes and photography workshops have emerged as hot trends. These experiences allow travelers to learn new skills while enjoying their vacation.
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Photo credit: Viator President Ben Drew (left) and Skift head of Research Seth Borko (right) at Skift's 2024 Megatrends in New York. Source: Skift Skift