With time-pressed travellers seeking great experiences in a fiercely contested environment, could Expedia, Priceline and the like become distribution channels for the packaged tour? Pamela Whitby has been finding out
When Thomas Cook launched his one-day shilling-a-head rail excursion between Leicester and Loughborough back in 1841 his vision was to employ ‘the great powers of railways and locomotion…in pursuit of social reform’. An intrepid traveller, who went on to lead the first round-the-world trip in 1872, Thomas Cook is viewed as one of the founding fathers of the package tour, but what would he make of how the sector looks today?
Well, he might feeling somewhat relieved that after a fall from grace following the rise of budget airlines, the internet, and a growing trend towards independent travel, the company he founded back in the 1840s might survive, and even thrive!
It won't, however, be business as usual.
Joerg Esser, who was until recently a former group director of Thomas Cook tasked with aspects of its digital transformation, argues that: “Classic travel shops with clearly distinguished added value will keep thriving in niches.”
Careful positioning and differentiation in the supply chain will be crucial here and the key elements to think about include inventory, customer segmentation, marketing/customer acquisition or customer experience.
Dan Christian, chief digital officer of The Travel Corporation which runs a number of established 'travel shops' including Contiki and Trafalgar, sees an opportunity in the strong re-emergence of established guided tour operators. The reason for this, he says, is that more and more people are booking multiday trips, and they are increasingly doing so online. One of the drivers of this has been the launch of Airbnb's ‘experiences’ offering, which is integrating restaurants, travel guides and so on, and in doing so has raised awareness of this existing category. He believes that if companies like TTC can package that content together, and make the API available, "there are a number of ways that people can mash up and work with it".
One big opportunity is for Expedia or Priceline, or any other major OTA, to wake up and promote multiday tours from companies like TTC. Says Christian: “Essentially what people have been doing is compartmentalising the tour into individual components. So, you can book a hotel, you can book a transfer, you can book a guide, you can book a restaurant but what we offer is that already bundled together,” he says.
So new distribution channels are emerging and realising that trusted tour operators – think Trafalgar, Contiki, Thomas Cook - are ready to make their tour bookings possible. “What AirBnb's announcement and these developments confirm, is that guided/multiday tour holidays are actually the next big thing in online travel. Our time has come,” he says.
What AirBnb's announcement and these developments confirm, is that guided/multiday tour holidays are actually the next big thing in online travel. Our time has come
Dan Christian, Chief Digital Officer, The Travel Corporation
Among the factors driving these trends are:
Time saving & convenience – the ability to fully purchase a packaged holiday and not try to piece it together yourself online
Safety – that comes with travelling with a trusted tour with extensive experience and proven operational excellence
Comfort – people are becoming more comfortable with making more substantial purchases online
New travellers – there is increasing engagement from millennials for products like Contiki and Busabout, and with U by Uniworld introducing the first River Cruise Line for 18-40 year olds, cruising is no longer just for silver sailors.
No longer business as usual
While having an established brand may be a bonus, it’s also clear that new players are popping up all the time to meet the growing demand for new experiences. Trip4Real, which was acquired by TripAdvisor last year, is one example. Another is Meetrip whose hosts, the website proclaims, are ‘chefs, hikers, or just knowledgeable locals who want to show others little-known pockets of their community. They can host an experience or multiple ones over the course of a few days’.
While Meetrip may be snapped up, in this disruptive, ever-consolidating environment, acquisitions are just one facet. “Partnerships,” says Esser, "are becoming more and more relevant, particularly for smaller players”.
Partners are clearly important for TTC, which is improving its APIs to provide trade partners with more simplified integration, set-up and the ability to request additional information, such as dietary details or flight options. This will better enable bookings.
“Having enhanced APIs,” says Christian, “that feature digital content, images, dates and rates, and ensuring that they are able to receive those APIs and implement them successfully is a key to our future success.”
One such partner is Tour Radar, a European-based business that enables traveller to book tours online, which is “essentially a Viator for escorted tours or multiday tours, and their whole business model is selling tours online”.
This TTC partnership began with Contiki and Busabout and then expanded to cover entire collection of the entire group. “We have had terrific success working with them in all markets to sell tours across all of our brands,” Christian says.
It's exactly this sort of activity that will help traditional players to keep thriving in a fiercely contested environment.
Read the full interview with Dan Christian, Chief Digital Officer, The Travel Corporation, later this month. Or join us next month for EyeforTravel’s revamped European Summit (May 3-4 2017) where both Christian and Joerg Esser will be sharing more insights
May 2017, London