Skift Online Travel and Distribution Summit: Tours “at front-end” of recovery

Tours, activities and experiences are best placed to recover from the pandemic, and everyone at the Skift summit has been taking an interest

“The recovery for [experiences] travel is at the front-end,” Greg O’Hara tells Skift. “Because as we measure demand and intent, it’s what people are looking to do with their families this summer. There’s going to be a lot of domestic travel.”

O’Hara, in conversation with Rafat Ali at the Skift Online Travel and Distribution Summit, is explaining why his company, Certares, invested in the tour company G Adventures. He’s bullish on experiences.

“I think the trend of active vacations is on target,” O’Hara continued. “And I know — even myself — I’m taking different vacations than I used to take. You know, I’m not going to sit on the beach anymore.”

The Skift Online Travel and Distribution Summit had more of a focus on tours, experiences and activities than expected. It was the one sector everyone had an opinion on. For all of that, there wasn’t really anyone from the sector on to speak or discuss what was happening in detail.

Kayak think tours, activities and experiences have reached the “maturation phase”

Steve Hafner, CEO of Kayak, on the experiences market: “It is a bit overhyped.” Fair play to him, it could appear to be a bubble. However, it’s something that Kayak is actively working on by beginning to sell experiences content.

“It’s now at the maturation phase where we can add a metasearch layer on top of it,” Hafner told the Skift summit. “Those providers are usually small, local operators. They publish their content to multiple platforms, and those platforms often set the price. 

“So we think a metasearch platform that spans all of that and provides a consumer with a complete picture of what to do and lets them pick where to buy it from and at what price — we might be at a point where that can get some traction.”

Metasearch referrals could have a huge effect on the tours, experience and activities industry, as they have on flights, hotels and car rentals. This means sales occurring significantly further up the travel funnel than many operators would be used to. And it means higher expectations.

For the tours, experiences and activities OTAs, it’s not necessarily a good thing. It means higher volumes, but also new fee structures and new levels of customer service. Large metasearch companies often use customer service SLAs as a way to ensure quality from OTA suppliers and as a requirement for access to the platform.

For operators, it will mean the lowest price distributed across the OTAs will be the one that sells and that there’ll be an extra layer of commission on top. Poor reviews will mean being delisted at the point where consumers are at their most inspired and willing to spend. 

The distribution technique itself won’t change unless metasearches allow operators to open a direct channel. This would be a good thing but it will only happen once an operator can provide a certain volume that’s worthwhile to the metasearch.

Tripadvisor: “That notion around quality really matters”

Tripadvisor has an incredibly interesting beta taking place right now — a subscription service for travel. Lindsay Nelson, Chief Experience Officer & Chief Brand Officer, said this will take the form of savings on hotels, discounts on TripAdvisor experiences and perks similar to those from a credit card. 

Whether Tripadvisor are taking the direct hit on those discounts in exchange for the $99 sub wasn’t drilled into. 

As a note, the B2C subscription programmes I’ve been involved in have failed to take flight, but perhaps the market wasn’t yet there for them.

Seth Borko from Skift asked why Tripadvisor had made it harder for tour companies to get their inventory online. Nelson’s response was as to be expected: quality and control. “That notion around quality really matters,” she said.

“I don’t know if it’s a strategy shift but it’s certainly really important to us today.”

Quantity is no longer the issue. Every OTA can sell as many tours of a certain destination as there are tours available. The ones they want to sell are those that have repeat business and those that don’t harm their own brand.

”As a travel guidance company, I think we take that especially seriously,” Nelson said. ”We focus on how we make sure we have the best experiences, how we take a point of view on what good looks like. 

“[We provide] the information that’s important to travellers and making decisions about how to spend their money. And if that means that we introduce some additional steps and how we think about making supply available. I think, ultimately, it’s in the best interest of the customer.”

Experiences are so hot right now

Everyone at the Skift summit thought that experiences are the hot thing in travel right now. Even Steve Hafner’s “overhyped” was immediately followed by how he expects Kayak to capitalise on the sector.

It may not feel like it right now because booking windows are going to be incredibly short this year. However, tours, activities and experiences are one of the few hopes for travel in 2021. They’re the only things people will be able to do domestically in-destination. That’s what the big companies are banking on.