Future of Tours and Activities Tech and Marketing

by Jeremy Kressmann + Skift Team - Jan 2016

Skift Research Take

Industry consolidation and innovation is ramping up as the tours and activities sector finally comes online. But a range of technical and logistical challenges still hold the sector back. How are tour operators adapting, and what strategies are helping them thrive in this dynamic environment?

Report Overview

The tours and activities sector remains one of the digital travel industry’s greatest untapped markets. Consumers spend somewhere between $100 billion to $200 billion annually on tours and activities according to some estimates. Now the sector’s huge potential has caught the eye of the travel industry’s biggest companies like TripAdvisor, Expedia and Airbnb, which are ramping up investment, acquisitions and innovation.

Yet even as competition in the online tours and activities sector ramps up, the market faces a range of challenges. The biggest obstacle is making more tour products available digitally. Research suggests as many as four out of 10 tour operators don’t sell their products online, and one in five don’t have a website. Another issue is consumer behavior. Many travelers wait until they arrive in-destination to make tour purchases, and increasing consumer reliance on mobile devices is putting greater emphasis on tour operators to build mobile-friendly experiences. Trying to standardize products in a highly fragmented tour category is yet another challenge. Tour suppliers sell everything from group trips to theme park admission tickets to airport transfers, complicating efforts to properly merchandize products and help customers comparison shop.

Despite these challenges, a number of new tour business models, strategies and technologies offer potential solutions. A growing number of peer-to-peer tour business models are helping small entrepreneurs bring inventory into the digital age, while more tour operators are figuring out clever ways to use mobile to help improve the tour experience for travelers. Perhaps the biggest insight is that tour operators are finding success selling tours to in-destination locals, not just to travelers.

Skift’s “Future of Tours and Activities Marketing” report reviews the potential size of this growing industry, evaluates the primary obstacles facing tour companies as the industry consolidates and offers a variety of examples of how tour operators are thriving in this dynamic sector.