An overview of six key trends impacting operators and suppliers of in-destination experiences, based on research and insights from Arival
Travel is back, and the in-destination experiences sector — what we at Arival call the Best Part of Travel — is rapidly expanding.
The experiences sector is projected to surpass pre-pandemic levels by 2024, with some regions and individual operators already reaching that benchmark this year. Travelers are on the move, but the way they discover, plan and book travel has changed significantly: and that matters for operators and suppliers of tours, activities, attractions.
Here at Arival, our mission is to help advance the business of those creating amazing in-destination experiences. We conduct research, provide insights on travel trends, technology and practical how-tos for operators of tours, activities and experiences.
Here are a few of the top trends and issues we’ve been paying close attention to so far in 2023.
1. Generative AI Arrives in Experiences
At the beginning of 2023, ChatGPT was just over a month old and already had over a million subscribers. Innovators throughout the experiences and travel tech space quickly recognized the potential in leveraging artificial intelligence for operators of tours, activities and attractions, and wasted no time getting started.
Myriad companies have already developed AI-enhanced tools built specifically to help operators with optimizing tour descriptions, booking automation, guest communication and even helping guests to write reviews. Arival has been keeping a close eye on generative AI developments: check out our list of the tools and resources built specifically for experience operators here.
2. Get Online & Get Mobile or Get Left Behind
The ability to book online is one of the top deciding factors for travelers when booking experiences, and mobile bookings now account for over two in five direct bookings for tours and activities and over half of direct bookings for attractions, according to Arival research (The 2023 Experiences Traveler, The Outlook for Operators).
Ability to book online is the second most important factor influencing traveler purchase decisions. Arival 2023 Experiences Traveler]
In spite of the clear growth of online and mobile bookings among travelers, nearly half of all operators and three in five small operators do not have an online booking system, according to Arival’s Technology and Connectivity report.
Part of our mission at Arival is to help advance the business of experience operators, and we’ve developed — and are continuing to develop — resources and guides to help operators with that process. Our guide on How to Choose a Booking System is a good place to start.
3. OTAs are the Fastest-Growing Sales Channel
As more travelers find, choose and book their in-destination experiences online, online channels — in particular online travel agencies (OTAs) — will vastly outperform traditional offline booking methods. OTAs will nearly triple in global gross bookings and total market share by 2025, growing by more than 150% over the pre-pandemic peak of 2019, according to Arival’s Outlook for Travel Experiences 2019-2025 report.
OTAs are expected to triple their global gross bookings by 2025 over 2019 levels | The Outlook for Travel Experiences 2019-2025 ]
Some OTAs are even making inroads into direct bookings, by developing booking or ticketing systems of their own, while others have taken the approach of acquiring specific booking systems, in either case expanding their revenue potential as online bookings continue to grow.
4. Get Found with Google Things to do
For operators of tours, activities and attractions, direct bookings are the holy grail. They mean less reliance on third party resellers, ownership of the customer, and higher earnings per booking without the amount lost to high commission rates. According to operators surveyed in Arival’s Technology and Connectivity report, “driving more direct online bookings” was overwhelmingly the top tech priority for large and small operators alike.
By far one of the top ways to get found online and increase direct bookings in 2023 is with Google Things to do.
Google Things to do allows travelers to find tickets and tours directly through Google’s Search and Maps, directly linking to suppliers and resellers of attraction tickets, and listing tours and activities that include searched-for points of interest in the experience. Experience operators can benefit from an “official site” badge and ensure their experience offerings are listed and optimized to take advantage of this powerful, free marketing channel (although paid ads are also available).
5. Ride the Short-form Video Wave
While many travelers look for things to do online, a growing segment of younger travelers in particular are redefining the path of discovery, instead finding experiences through social media, and specifically short-form video.
Short-form video has exploded in popularity with the likes of TikTok, Instagram Reels and Youtube Shorts. Travelers — particularly Gen-Z and Millennials — are increasingly using this to discover and book in-destination experiences.
While working with short-form content creators offers a new channel for savvy operators to reach the video-oriented younger traveler directly, development of the sector could also pave the way for a new kind of OTA for Gen-Z.
6. Labor shortage persists in tourism
Even as the pandemic subsides in most regions, the labor shortage persists in tourism worldwide, and many experience operators are still struggling to recruit and retain tour guides. In Southern Europe alone tour operators — along with hotels and restaurants — faced more than 400,000 vacancies in 2022 as travelers returned to the region. Tourism spending is projected to outpace employment levels for several years to come.
Although there are certainly things operators can do to find and keep quality guides, the problem reaches beyond guides to all levels of tourism organizations, as many have left the industry entirely. As 2023 progresses, organizations are using various strategies to win back workers after the tourism brain drain. Some skilled workers are starting to return, and new workers as well are entering the industry. Onward and upward!
Arival advances the business of creating amazing in-destination experiences. We provide events, insights, and community for creators and sellers of tours, activities, attractions and experiences. Join us at one of our upcoming events in Orlando (Oct. 9-12, 2023) or Berlin (Mar. 3-5, 2024) to learn more and make connections with peers and leaders in the Best Part of Travel.
Main photo: Emmanuel Marot, Director of Product Development for Google, discusses Things to do with Arival CEO Douglas Quinby on the main stage at Arival 360 in Berlin.
By Janelle Visser
