Due to be released in the second quarter of 2017, the Phocuswright Special Project "Global Travel Activities 2014-2020: Tours & Attractions Come of Age" dives into the issues and trends transforming tours and activities. As sponsors of the project, TrekkSoft has had a first glimpse at the findings. Phocuswright research is always top-quality, and with this report they deliver yet another catalyst for a major industry shift.
Their data is brought together for an insightful analysis into use of tech, distribution channels, marketing and advertising, as well as key inhibitors and opportunities for the sector. Although much of the final report will be high-level, there are some key trends that expose opportunities for forward-thinking tour and activity suppliers to get a step ahead of their competition.
As the third largest segment in travel, and if we are honest, the main driver of the recreational travel, there are still huge opportunities for tours and activities that many suppliers are still yet to pick up when it comes to online selling and distribution via online travel agents.
We have highlighted some of the key steps you, as a supplier can take, to help yourself and the industry to step it up.
Our observation: Tours and activities needs to fully emerge from the Stone Age
Small suppliers form the backbone of the tour and activity sector, and for those of you in this segment, business is still overwhelmingly manual. Phocuswright shares how 55% of tour and activity suppliers do not have a third-party reservation system, and of those who don’t, 67% use email or calendar to manage their bookings. Stone age thinking comes with all sorts of challenges for suppliers, the consumer and, further up the chain, distribution channels requiring live inventory. As a crucial first step, suppliers need to get online with a booking and management system like TrekkSoft.
There's a long road ahead, but 2017 has the rosy glow of new year resolutions that we hope will be seen to fruition. Tour and activity suppliers cite "growing online sales" as their number one priority, and 3/4 say they will have live online booking within the year. Even more powerful is to aspire towards a mobile site with live booking, as many of these suppliers are doing. Online tours and attraction gross bookings will more than double from $9 billion in 2015 to $21 billion in 2020. And suppliers need to be ready: online and on mobile.
A glimpse at the opportunities for your company
1. Profit from tours & activities tech investment and innovation
Since 2005, Phocuswright has noticed a huge influx of investment and innovation in travel activities. This includes more than 90 online resellers, 42 P2P marketplaces, and over 20 B2B reservation software startups. The choice for suppliers is growing, be it in the booking and management software they choose or the OTAs they use.
Suppliers should be staying on top of what the industry giants are up to and what they're offering. By choosing a software provider with a built-in channel manager, it's easiest to hook up to the OTAs that are winning the attention of consumers.
2. Get easy wins from live inventory
At the moment, the industry is largely missing the last-minute boat. But when a tour and activity company uses a system like TrekkSoft to manage their bookings and business management, they enable all-important live inventory. This means that bookings are updated in real-time across channels and devices, which solves one of the largest challenges preventing the industry from moving forwards: manual distributor connectivity.
Once suppliers have made the simple step of setting up live inventory, they immediately open up new channels to balance their distribution network and avoid the risk of putting all of their eggs in one basket. Live inventory allows suppliers to cross-sell with local partners, enable agent sales, and sell last-minute on OTAs such as Viator and Expedia Local Expert (the two most commonly used online travel agents in both Phocuswright's findings and our TrekkSoft distribution research in Autumn 2016).
3. Automate voucher validation to keep fraud at bay
Most suppliers are manually validating reservations, which is not only tedious but a risk. Without the QR code of an e-ticket and mobile voucher, it's all too easy for fraud to raise its head and cost suppliers money – especially if providers or agents photocopy or accept a ticket and validate it (or not) later.
Phocuswright have found that the larger suppliers ($1m+ revenue) are being hit hardest by fraud, among which 38% reconcile later. Geographically, emerging markets are worse off. The solution again is tech. Using a system like TrekkSoft enables automatic reconciliation for tickets and voucher codes: the best solution for holding on to honest bookings.
Our initial key takeaways from the Phocuswright findings?
One, suppliers need to see the urgency of investing in tech and working with online resellers, even if they think "we're doing just fine without it". This is especially the case for smaller suppliers and those in emerging markets. Consumer behaviour has shifted online (and increasingly last-minute and in-destination when booking), and suppliers have to be fighting against inertia and "how we've always done it". Tech is the enabler here.
The TrekkSoft tools to grow your online sales
1. Find out which online travel agents you can profit from in our industry report, The Tours and Activities Distribution Landscape of Today
2. Get online, set up your all-important live inventory, and prevent voucher fraud with TrekkSoft. We're offering a 15-minute consulation to discuss your business goals and show you how to maximise your results, or you can get started with a 14-day free trial now.
Written by Lucy Fuggle
Lucy is Head of Content Marketing at TrekkSoft. She tries to read a book a week, travel solo every month, and share ideas on lucyfuggle.com. You can usually find her in Switzerland's Berner Oberland.