This is the first in a four-part series on how the hospitality industry can capitalize on the growing tours and experiences marketplace.
Over the past few years, there’s been a greater focus on experiences in the tourism industry, particularly among younger travelers. Planning a trip isn’t just about finding the best hotel or homeshare in New Orleans but booking the best swamp tour or Cajun cooking class to go along with it. The global tours and activities marketplace is worth about $150 billion annually, with venture capital investors betting on it as the “next great untapped market in online travel,” according to Skift. According to the article, tours are in the same position that online hotel reservations were in 15 years ago: There’s tons of opportunity for digital platforms to revolutionize how tours are marketed and sold, hence the influx of venture capital investment.
Increasingly, booking these experiences has transitioned from the sole purview of traditional tour companies and operators. Hotels, Airbnb and booking sites like Booking.com and Expedia now have a larger piece of the pie, all offering experiences in addition to accommodations. In 2017, Marriott invested in a tours and activities platform, PlacePass, and as part of that, it recently relaunched its “Moments” marketplace, which sells tours, excursions and cooking classes.
As travelers look to seamlessly bundle accommodation bookings with tours and experiences bookings, hotels and booking sites need to focus on personalization: delivering the right offer to the right traveler at the right time, with personalized content that will ultimately engage them. For example, Expedia’s Things To Do feature lets travelers easily book tours, attractions and ground transportation online. After renting a car or booking a hotel in Toronto, Expedia suggests you complete your trip planning by making it fun and exploring activities in and around the city. And, after a traveler books a Tuscan villa on Airbnb, she’s prompted to purchase Airbnb Experiences in the area like truffle hunting or wine tastings led by locals.
To make that personalization successful, marketers need to understand the traveler’s buyer journey: A number of people will book activities when they’re booking hotels or flights, and others will book them a few days or even a few hours before. Understanding traveler preferences should ultimately inform content and messaging and how to engage with them at different points in time. To send travelers the right offers, you need the right data and analytics. For example, Amazon or Netflix can, at any time, put a recommendation in front of you that’s applicable. Hotels and travel sites should similarly bring their data together to make this a reality, but without violating privacy or risking data security issues. You also need the right technology and digital solutions to serve up the right offers.
In upcoming blog posts, we’ll delve deeper into the traveler’s buyer journey, data and analytics and technology and digital solutions, but for now, there’s no sign of this trend stopping. Tours and attractions is a billion-dollar industry that will keep expanding online, and it’s especially crucial to attracting younger travelers. Hotels and booking sites need to think about how to personalize their offerings to get on board—or risk losing a critical segment of the market.