The Digital Battle for Tours and Activities

Having worked in the tours and activities industry for many years now, I can confidently report that the last 24 months have seen some of the industry’s most exciting and interesting developments.

As these huge changes appear on the horizon, every online travel agent (OTA) and booking platform — both big and small — is positioning and preparing itself. But who will ultimately dominate the market? With this blog, I’ll look at the big three OTAs, Google’s entry into the tours and activities sector, and I’ll explain how suppliers can make sure they’re ready for the changing digital environment.

[Don’t wish read? Watch the video on this topic instead.]

The Big Three: Airbnb, TripAdvisor, and Booking.com

Overall, we’re seeing the biggest tourism influencers expand their services into other areas and niches. Airbnb, for example, has dominated the accommodation sector and has recently moved into offering local guides and activities. TripAdvisor, currently one of the most influential decision-making platforms in the industry, has acquired Viator (now TripAdvisor Experiences) and Bókun; this allows TripAdvisor to offer customers a more seamless booking process. Booking.com also acquired FareHarbor, allowing it to offer its customers tours and activities after booking a hotel. And this is just the start…

But why are the big three buying these companies and expanding their products and services at such a fast rate? The answer is simple… Google.

Google’s big plans for Tours and Activities

The average Google user isn’t aware of this, yet, but Google is integrating directly with booking platforms and ‘schedulers’ to provide their customers with the ability to book directly in Google’s search results. This means that users can search for a tour or activity and book it without even clicking off the Google results page to visit the website! A full list can be seen here. Booking Platform Peek Pro is one of the first providers to be integrated into Google’s new system. You can read a little more about this and see an example in my previous article.

These changes by Google will put the control back into the suppliers’ hands (the tour operators’ hands). It also means that the high commissions the OTAs currently take from suppliers will be bypassed. Whether or not this is good news to you depends on how much (or how little) you rely on OTAs to sell your tours and activities. 

OTAs are important to suppliers because they open up their products to a large number of potential customers that may not have found them in the first place. However, relying too heavily on OTAs can dilute your brand. Most OTAs also retain ‘your’ customer information. This means that you do not actually have access to customer data (emails, demographics, contact numbers, etc).  As OTAs keep this data about your customers, you don’t own the rights to that information. And, in today’s business world, data is king, helping you make informed marketing decisions for your business. 

Google’s big changes are obviously striking panic in many OTAs; is it any surprise that they’re acquiring booking platforms? They are trying to make themselves as big and influential as possible — transforming themselves into comprehensive tourism hubs.

TripAdvisor Experiences Will Be Integrated with Google

What I do find interesting is that the likes of TripAdvisor Experiences will also be integrated into Google’s new system. For me, having an OTA integrated with Google in this way is more bad news for suppliers. Think about it for a second…

Google will eventually update Google Ads (formally Adwords) to allow suppliers to have sponsored listings that will be bookable on the search engine results page (SERP). For suppliers hooked up directly through the likes of Peek Pro, this is great news, but for those who rely on an OTA for most of their business, you are, in effect, paying twice: first for the cost-per-click for any Google Ads, then you’re paying the high commission to the OTA. This, combined with operating costs and other outlays, means suppliers will be receiving even less revenue from the products they sell. This will almost certainly drive up prices for the end consumer, as this is the only way for suppliers to make enough to sustain their business.

This would be very bad news for tour and activity providers and we must do everything we can to prevent it from happening. Suppliers must take back control of tours and activities or it will eventually become what the hotel industry has become: a faceless entity run by a handful of large organisations with suppliers at their mercy. When was the last time you booked directly with a hotel and not through the likes of Airbnb or Booking.com? 

Will Someone, or Some Business, Save the Day?

My hope is that Google will help bring back some control to the suppliers. For a period, I believe it will. However, I strongly believe it will take another outside player to really shake up the industry and help bring that control back in a meaningful way.

I have already written about my thoughts on Facebook. You can read the article here. I feel Facebook is in a prime position to completely dominate the tours and activities sector. With over 2 billion users, suppliers could better target the customers they want within their destinations. Users don’t like to leave Facebook so it seems obvious — and perhaps inevitable — that Facebook will add its own fully integrated booking process within the platform. If Facebook were to do this, it would help suppliers sell their tours and activities directly through their Facebook business pages. This could be a huge blow for OTAs — perhaps even a killing blow!

Amazon is another player who is not scared to go into different sectors. I would not be surprised if they made moves into the tours and activities sector. They already tried this (sort of) with Amazon Tickets. While Amazon Tickets failed after not securing a deal with Ticketmaster, it shows that they are interested in moving into the tourism industry. Nothing will stop Amazon’s plans for world domination…

What Can Suppliers do in the Meantime?

For suppliers, real change will only happen when they come together and say ‘enough is enough’ when they take back control of their businesses and their industries. Of course, some suppliers may not care and will be happy to make money and pay the ever-increasing commission to OTAs. Most, however, appear to be worried about their bottom line, and the ever-changing digital marketing landscape for the tours and activities sector.

I strongly believe you can strike a good balance of marketing yourself, generating more revenue in the long run and creating a more sustainable business, while dipping your toe into the world of OTAs. Just do not allow your entire business to rely on them. Take advantage of OTAs without sacrificing control of your business. 

Take steps NOW to generate your own revenue through your website and social media channels. This is one way to take back as much control over your business as possible. Do this while the big guns fight it out amongst themselves and wait for the dust to settle. If there’s going to be one winner in the tours and activities sector, let’s all make sure it’s the suppliers!

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Chris and his team will send you a weekly email offering high-value insight and advice about a variety of marketing and business development topics related to the tourism industry. We address specific destinations, tours and activities, and the hotel industry. We also provide important travel industry news and updates.

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