Activities and technology – a new relationship with a long-term future
07/17/2015|5:01:51 PM|Tnooz

In an era of constant change and innovation in travel, with new business models and companies appearing every day, there is a great contradiction in the fact that the transfers and activities sector has remained disconnected from the travel distribution ecosystem.

As a highly fragmented market, there are not that many players in the activities sector capable of providing a real global integrated offering.

Instead, the landscape is dominated by small providers, often family-run businesses, many of whom usually operate locally and sell their activities through offline channels, either over the phone or in person at kiosks in the hotel or in destination.

Market potential

Combined with limited or ineffective marketing strategies, lack of sophisticated technology and challenging economics, the growth of the activities sector has been hampered, despite its importance within the travel industry.

The travel industry’s largest players have continued to focus on packages, flights and hotels, ignoring the market opportunity of activities.

The activity segment is made up of a wide range of quite distinct sub-sectors and products.

Tours, activities, attractions, events, ground transportation and multi-attraction passes are the main activity types defined by PhoCusWright’s When They Get There (and Why They Go) 2014 report.

This study explains that, while the dizzying range of products is enriching, it is also a factor that has hindered the establishment of large scale, efficient sales channels.

Mobile makes its mark

But in the past few years there has been a growing recognition that mobile platforms have the potential to revolutionise the way travellers search for and purchase activities and related products.

The activity and ancillary market represents a huge opportunity – Phocuswright says European travellers alone are expected to spend more than €40 billion annually

Furthermore, in an era where the cost of customer acquisition is ever increasing, the transfer, activity and experience sector presents options for cross selling and upselling.

The revenue can then help to lower the customer acquisition cost.

Elsewhere, it is important to consider that for many travellers the choice of destination is directly related to the activities available in that destination. Music concerts, festivals and sports events often rank highest as drivers of destination selection.

For obvious reasons, these types of activities are usually booked far in advance compared with other activity products which tend to be booked just before the trip or in the destination itself on the same day.

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