The growing importance of experiences in the travel industry has been an ongoing discussion since the fallout from COVID-19. And while there have been no signs of travelers’ appetite for experiences slowing down, at what point does it peak?
That was a question kicked around by experts in the field during the Phocuswright Europe event in Barcelona this summer. Sarah Dines, chief commercial officer at Viator, referred to projections that the segment would be worth $350 billion by the end of 2028, about a hundred billion more than it is today.
“I think there probably is a ceiling at some point, someday, but we’re very, very, far from that at this point,” Dines said. “What we see in our own business is an increasing number of activities being done by travelers while they’re on one trip. The number of things that people are doing , and the amount of money they’re spending on experiences is continuing to grow.”
Dines was joined during an interview in the Phocuswright Studio by Laurens Leurink, the CEO at Tiqets, and Travis Pittman, CEO of TourRadar. They echoed her viewpoint.
“I think we’re on the back of the tailwinds from COVID. People want that more experiential-type travel,” said Pittman, whose company is an organized adventure platform that specializes in multi-day organized tours.
“Definitely people want more cultural, in-depth experiences: going to Vietnam or cooking with a local or cycling on a bike through the fields and that sort of thing,” he added. “People want that and not just going and flopping on a beach for a week. They definitely want to be a bit more active. So there’s definitely a lot of head room for growth.”
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Leurink noted that travelers aren’t just booking more experiences like the tickets to museums and attractions his company specializes in; they’re looking for new ways to do those things.
“When people visit Paris, they have their bucket list, they things they want to see for the first time,” he said. “But what we’re seeing at Tiqets is that the way they want to enjoy the Louvre, the way they want to do a Seine cruise, the way they want to do a culinary tour changes. There’s a lot more local interaction.”
He also sees the bucket list expanding to include more of the “hidden gems” that might have stayed hidden a few years ago. For Pittman, “off-the-beaten-path” tours is a new — and welcome — trend.
“Obviously, overtourism is something we all talk about, and getting people out of those hubs and into more regional areas in the countryside is one thing that we’re trying to really push,” he said. “Developing countries really benefit from that community tourism, that people come in and the money stays there. Getting people out of Paris and out of Amsterdam and Barcelona and into places like Morocco and Vietnam is obviously great for those local communities.”
One of the issues that had held back the experiences segment was a fragmented nature where so many operators continue to do business offline.
“It’s not the most tech-savvy industry,” Pittman said. “That’s definitely what’s held it back. There hasn’t been the technology there in the same way as hotels and flights and everything. We’re catching up.”
Dines said many operators didn’t know or didn’t understand the value online travel agencies could bring to help them connect with a consumer base that was rapidly shifting to an online shopping environment. The pandemic helped change that.
“COVID really brought operators online more rapidly than pre-COVID,” she said. “Ultimately, consumers want to buy convenience and ease. As more consumers become aware of OTAs and online distribution channels, operators will go where consumers are at the end of the day.”
The trio also spoke about the opportunities for consolidation in the experiences sector, various strategies to keep growing and how to maintain their prominence as the importance of Google Maps, social media and conversational searches grows.
“We’re looking forward to that,” Laurens said. “We own the availability, we own the core data, the core pricing that in the end, if you want to make your dream happen, you need to have that position. So we’re in a good spot there.”
Pittman was quick to emphasize the point.
“Owning the inventory, as in the availability and pricing and everything, that is something that we have to remember,” he said. “Google has shown intent for some areas there, but at the end of the day, the merchant of record or the booking needs to happen somewhere – probably not on Google – and that’s where we have to try and obviously leverage that position.”
Watch the full discussion below.