The trouble with tours, activities and ticketing
Supplier connectivity is the thorny issue, writes Pamela Whitby, and one that the biggest player in the space is trying to solve
Viator CEO Barrie Seidenberg tells the story of a visit to a European supplier.
“They were taking our electronic communication, printing it out, walking to the other side of the room and handing it over to somebody else to enter into their system. That just doesn’t work when you are talking about thousands of bookings everyday,” she says.
What she quickly realised was that while Viator’s communications with the supplier were electronic, this wasn’t the case on the other side.
The issue of supplier connectivity in the $50bn tours and activities (T&A) sector is something that Viator is working hard to address. And it is something that has become even more important since the launch of Viator's Marketplace, a platform that allows the firm that Tripadvisor acquired last year to reach a much wider geographic supplier base. From all over the world, suppliers can now enroll online for distribution by accepting Viator’s contractual terms and loading their product and pricing information. However, Seidenberg is quick to stress that it is not a purely open market place, like Yellow Pages.
“We are still doing some level of vetting to ensure these are real businesses that sign our contract and have appropriate credentials for the categories they are operating in,” she says.
However, it does allow Viator to go much deeper from a destination point of view than it previously could, and this presents a huge opportunity. Since 90% of T&A are booked in destination, today it is even more important to get the technology – and in in particular the mobile piece – right.
“This is a big focus because while it’s great to have a mobile app, if you can’t book for five days in advance then that isn’t helpful if you are in destination,” Seidenberg says.
“…while it’s great to have a mobile app, if you can’t book for five days in advance then that isn’t helpful if you are in destination” Barrie Seidenberg, CEO Viator
Small suppliers, big challenges
While Viator has been working successfully with some of its larger partners that have more sophisticated and robust systems to solve the connectivity issue, there is a huge diversity in the supplier base, and it's the smaller fry that pose more of a challenge.
“You have everyone from Universal Studios which has a very sophisticated system to Suzy’s Walking Tours of Melbourne which may not have a system at all,” says Seidenberg.
Increasingly though, even the smaller firms are looking to automate their systems, and Seidenberg believes this will only accelerate in 2016.
“We have spent a lot of time educating our suppliers,” Seidenberg explains. “Because even if they are small, if they want to be available for bookings 24/7 then they need to be able to accept last-minute bookings.”
There are, however, hundreds of suppliers of tours and ticketing systems, which include RezGo, TourCMS, RezDy, TicketingHub to name but a few, that Viator needs to work with. Some of these are regionally based, while others are focused on specific categories of tours. With such a disparate supply base, Seidenberg has to acknowledge that it is a tricky business. Because what is important to a helicopter operator which needs to capture travellers’ weights and so on is very different to someone operating a hop-on-hop off bus or bike tour.
“It’s one thing getting the content, it’s another to really ensure that this business is automated, so that we can enable last-minute bookings, making it easier for consumers to book online or via their mobile device, as well as being scalable for suppliers to do so,” argues Seidenberg.
This issue of inventory management - knowing whether the last seat is available on that bus for tonight or tomorrow - is the real battle and a major focus for many players including Ticketinghub. CEO Carl Pihl says a focus on inventory rather than venue management makes it easier to work across the supply base.
But there is plenty of competition and consolidation in the sector is likely. To highlight the point, TourCMS, for example, has recently been acquired by Palisis, which specialises in bus tours and city cruises.
As the biggest player in this space, Viator knows only too well how tough it is. Says Seidenberg: This is not a task for the faint of heart; it requires effort, engineering time, project management, maintenance and then monitoring.”
But Viator does have the advantage of scale.
The ticketing dimension
Another tricky dimension to this business is the issue of ticketing and mobile redemption. In many cases there are whole group of suppliers where a paper-based barcoded system is still the order of the day.
TourCMS CEO Alex Bainbridge explains that today most people have to print out piece of paper to say that they have booked a tour or activity and may even have to swap that on site it for tickets.
“If you are in a hotel room do you really want to have to go an find the business centre to print these out?” he asks.
Almost certainly not, but today that is the reality for customers. And many suppliers are still sending off a pile of paper to the online travel agency that the customer booked through and then waiting for payment. Not ideal!
It would be a lot better for the customer - and the supplier - if they could go directly to the gate and scan the barcode electronically. But the truth is that today this is still very much a paper-based environment and is, as such, open to fraud.
Ben Hopkins, e-commerce & Digital Marketing, CityCruises operates a manual paper-based system and while he understands the need for automation, there are challenges, not least the huge number of resellers out there and the lack of standards.
In conversation with Hopkins after his recent presentation he acknowledged that fraud is a challenge but has not yet worked out whether the business case to invest in the technology that so many are trying to flog stacks up.
So there really is everything to play for in this space.
Going forward there can be little doubt that T&A is a space to watch. Gloria Molins, CEO of Trip4Real, a peer-to-peer marketplace for authentic local experiences, is excited: “It’s an incredible sector, and the market is only going to grow but there is still a question over who, where and how.”
“Ancillary sales sound like something you might add to a flight or hotel booking. But, no, this is actually the reason that people go on holiday” Alex Bainbridge, CEO, TourCMS
What Bainbridge really hopes, however, is that hotels and airlines stop thinking of tours and activities as a way to drive ancillary revenues.
“Ancillary sales sound like something you might add to a flight or hotel booking. But, no, this is actually the reason that people go on holiday. The holiday is the time between the flight and the hotel stay not the four hours you spend in an airline seat,” he says.
He has a point. So, power to the small businesses giving travellers a great in destination experience.