By Aisha Al-Muslim
Booking companies and hoteliers are trying to sell travelers more online than just a place to stay, an airline ticket or a car rental. These web-based firms also want customers to purchase experiences such as parasailing excursions, food tours and aquarium adventures.
The amount spent by travelers on tours, attractions, events and activities while traveling has swelled 21% since 2014 to $159 billion, and companies like TripAdvisor Inc., Expedia Group Inc. and Booking Holdings Inc. are trying to get customers to buy more of them online.
Currently, about 80% of experiences are booked offline through walk-ups, phone, traditional travel agencies, and hotel concierges, according to travel-research company Phocuswright.
Travel sites and hotel chains like Hyatt Hotels Corp. H 1.64% and Marriott International Inc. MAR 1.60% could potentially earn more revenue from commissions paid by suppliers after a customer books an experience, or from higher advertising spending by businesses looking to capitalize on the growing demand. “These tours, activities and attractions, which have always been there, have suddenly got a little bit of a rebrand because it is kind of the last area of travel that has yet to be fully digitized,” said Caroline Bremner, head of travel and tourism research at Euromonitor International Ltd.
Los Angeles resident Fatimah Satya spent weeks scouring the internet for excursions for her European vacation. Through Airbnb Inc.’s Experiences and TripAdvisor’s Viator, she and her husband were able to book a tour of the Devil’s Pulpit in Finnich Glen, Scotland, and rely on the websites for tickets, directions and communications.
“It is easier to keep track of your trips on the app,” said Mrs. Satya, 30 years old. “I don’t know how people did it before that.”
Typically, travel agents often connect tourists with things to do and other services. But now, the same online companies that disrupted the travel-agent business for trip reservations are looking to grab the excursions segment of the industry as well.
Travel agents aren’t concerned about digital competition because they offer customized itineraries and concierge-style services for clients, said Erika A. Richter, a spokeswoman for the trade group American Society of Travel Advisors. “There is a market that we serve that will always come back to travel advisers for the level of customer service that only a human being can offer,” she said.
Travel agencies handle the largest share of global travel bookings, representing 30% of the total in 2017, according to Phocuswright. However, bookings made directly through websites are expected to slightly overtake travel agencies by 2021, Phocuswright said.
“Activities remains one of those markets that is still essentially there for the taking for players who can make that experience much better,” said Mark Okerstrom, chief executive of Expedia, which offers experiences at 1,800 destinations and recorded more than half a billion dollars in activities bookings in 2017.
Lovis Williams of the Bronx, N.Y., didn’t want her inability to drive to limit her Southern California vacation with her 7-year-old daughter, Cyan. So the 31-year-old turned to Viator to book tours of beaches and Palm Springs, and Expedia for a Hollywood tour. “I just found it easier to navigate on my own and figure out what I want to do as opposed to what the hotel is pushing,” Ms. Williams said.
TripAdvisor said booking experiences are its fastest-growing revenue stream, making up roughly 50% of the site’s nonhotel revenue of $360 million in 2017. It has more than 140,000 experiences ranging from macaron-making lessons in Paris to three-day expeditions in the Amazon rain forest.
Earlier this year, TripAdvisor bought software company Bokun to give tour operators that were previously offline the ability to offer bookings online. In November, TripAdvisor launched a new version of a Facebook -like travel feed that gives users trip-planning ideas.
Booking.com in August launched “Booking Experiences” in the U.S., providing opportunities for travelers to book activities from a recommended list. It hopes the efforts will create loyal customers, said Ram Papatla, vice president of booking experiences.
Home-sharing company Airbnb offers more than 15,000 experiences across more than 1,000 cities, after launching its experiences business two years ago with local guides in a dozen cities.
“The idea is that one day we believe that Airbnb can be the place where you can go with your entire trip,” said Joe Zadeh, head of Airbnb’s Experiences business.
Lateshia Dowell, 31, of Farmington Hills, Mich., booked several activities through Airbnb ahead of a weeklong trip to Italy in October. In Rome, Ms. Dowell, a social media marketing entrepreneur, had a session with a local photographer, visited a pasta-making class and went on a bar crawl. She also booked a pizza tasting in Florence and wine tasting in Chianti.
“I needed to properly plan to make sure I made the most of my time in the country and wasn’t alone or bored,” Ms. Dowell said.
Several hotel chains including Hyatt and Marriott are also accelerating investments in the experiences space.
Marriott’s acquisition of Starwood Hotels & Resorts two years ago helped it enter the travel-experiences business. After investing in travel experiences aggregator PlacePass last year, Marriott-the world’s largest hotel company-now offers more than 110,000 attractions and tours through its “Moments” website to anyone, regardless of a hotel reservation.
“People want Instagram-worthy kind of moments,” said Ericka Acosta, a Marriott spokeswoman. “We see people are traveling for these amazing experiences.”
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