How will you make more money in the future?

If you can look beyond the COVID era and imagine how the world will be when travel is back on the agenda, then the chances are that you’ll be wondering where your travel business will fit, how it will compete and, more importantly, how it will make money, writes John Maguire, CEO of TripAdmit.

"Industry players will be looking at what will give them the edge – be it technology lead processes, automation, data management or pricing.

They will also be looking at what they can do to increase revenue.

One area that has often been overlooked, or at best an afterthought, by OTAs, agents and airlines, is tours and activities, which pre-Covid were estimated to be worth around $180 billion a year.

Even though this sector might not reach its full potential for a while, this will be a substantial market as people start booking experiences again.

Activities and experiences will be the drivers behind hotel and airfare bookings. People don’t go to India to fly on a specific airline, they go to take a cruise down the Ganges or visit the Taj Mahal. Experiences are going to fuel consumer demand as travel picks up, and tours and activities will be an important factor in how people look at destinations they feel comfortable travelling to.

Airlines and agents that include personalised suggestions, such as a unique tour and activities, will make customers remember the brand and consider repeating their purchase on the next trip. A great strategy to improve customer engagement and brand loyalty, while generating more ancillary income.

               "The Covid crisis has prompted a rush among suppliers to get online"
 

There is one problem however, and that is the vast majority of tours are still sold offline, either at the destination or through traditional tour operators and travel agents. Prior to Covid, a staggering 80% of this sector’s bookings were taking place offline with online booking limited to those that had the time, money and resources to allocate to set up digital sales solutions.

This is now changing, with platforms like TripAdmit providing booking software and white label solutions that allow travel firms and airlines to upload and manage their own contracted experiences. This is also prompting standardisation in the tours and activities sector which currently operates under a plethora of different formats.

There are signs of cohesion and standardization and, while it’s a slow process, it is going in the right direction.

The Covid crisis has also prompted a rush among local suppliers to get online, having lost their usual walk-up business from overseas tourists. Historical and heritage tours, private day tours, city passes and hop-on hop-off services are just a few examples of operators making the switch.

As travellers look for the assurance of a more digitised contactless experience, this industry is at last starting to catch up with the rest of travel. Much the same way that independent boutique hotels were operating before sites like Booking.com helped connect them online. It’s in the industry’s interest because you get more people looking at more products.

The long-term outlook for travel continues to be bright. Global integration, coupled with economic growth and rising consumer income and leisure time have driven demand for these services and this should continue as we recover from this pandemic.

As travellers start to buy back into tours, activities and experiences, travel businesses have the chance to capitalize on this opportunity and increase their share of this multi-billion dollar industry.