Are Tours, Activities & Attractions Really Online Travel’s Next Big Thing?

Are Tours, Activities & Attractions
Really Online Travel’s Next Big Thing?
WiT Japan & North Asia
5 June 2019
DOUGLAS QUINBY
Co-founder & CEO, Arival

Arival advances the
business of creating
amazing in-destination
experiences through
events, insights and
community for creators
and sellers of Tours,
Activities & Attractions.
Learn more at
www.arival.travel
© Copyright 2019 Arival LLC, All Rights Reserved

There are Two
Competing Narratives in
Tours & Activities:

1: Some say it’s online travel’s
Next Big Thing.
Why?

It’s Travel’s Third-
Largest Sector
Note: *Other includes car rental and cruise and package tour operators in select markets.
Source: Phocuswright’s Tours & Activities Come of Age: Global Travel Activities Marketplace 2014-2020
Airlines
Hotels
In-Destination
Rail
Other*

Photo: PORTA-KING Building Systems
It’s Mostly Offline

Online Share of Bookings is Much Lower than
Hotels
Source: Phocuswright
0%
25%
50%
75%
Hotels (Leisure) Tours & Activities

And investors are pouring a
lot of money into the sector:

$12M
$525M
US$1.2B Raised Since 2017
$33M
$9M
$6M+
$26M
$10M+
$26M
$5M
N/A
$2.6M
$12M
$12M
$7M
$559M $40M
$8M
N/AN/A

Startup Funding: $1.2B
APAC, 47%
Europe
46%
North America
7%
More of that money
has gone to companies
in Asia than anywhere
else.

2: But others say tours & activities is
Massively Overhyped.
Why?

It’s too fragmented and
complex, with many small,
offline businesses

Source: Quartz
Travelers Don’t
Care: They have
been just fine booking
offline

Investors are just
chasing
the latest trend.
$12M
$525M
US$1.2B Raised Since 2017
$33M
$9M
$6M+
$26M
$10M+
$26M
$5M
N/A
$2.6M
$12M
$12M
$7M
$559M $40M
$8M
N/AN/A
And we’re in an investment bubble

Which narrative
is right?

Let’s start by asking
different question:
Why has it taken
so long?

We are well into the third decade of
online travel, and interest in tours and
activities is only starting now.
Why?

1) It is super fragmented

Operators worldwide:
>250,000

$250,000*
Most are very small, with
gross bookings of less than
* Phocuswright

But for many, it’s less than
$50,000
* Phocuswright

2) It’s super complicated

Tours & Activities is not
a vertical:
It’s comprised of hundreds of
industries

Four-Wheel Drive (4WD) Tours & Excursions Dolphin & Whale Watching Parasailing & Paragliding Adrenaline & Extreme Tours Duck Tours
Photography Tours Air Tours Eco Tours Private Tours Ancient Ruins Factory Tours Rail Tours Antique Stores Fashion Shows & Tours River
Rafting & Tubing Aquariums Fishing Charters & Tours Room Escape Games Archaeology Tours Food Tours Running Tours Art & Music Tours
Gear Rentals Safaris Art Galleries Ghost & Vampire Tours Scavenger Hunts Art Museums Ghost Towns Scenic Railroads ATV & Off-Road
ToursGolf Courses Science Museums Auto Race Tracks Gondola Cruises Scooter & Moped Tours Ballets Helicopter Tours Scuba & Snorkeling
Balloon Rides Hiking & Camping Tours Segway Tours Battlefields Historic Sites Self-Guided Tours & Rentals Beer Tastings & Tours Historical &
Heritage Tours Shark Diving Bike Tours History Museums Shooting Ranges Boat Rentals Hop-On Hop-Off Tours Shopping Tours Boat Tours
& Water Sports Horse-Drawn Carriage Tours Sightseeing Tours Bus Tours Horseback Riding Tours Ski & Snow Tours Bus Transportation Hot
Springs & Geysers Skydiving Canyoning & Rappelling Tours Kayaking & Canoeing Specialty Museums Castles Lessons & Workshops Speed
Boats Tours Caverns & Caves Lighthouses Stand-Up Paddleboarding Children's Museums Marinas Surfing City Tours Military Museums Swim
with Dolphins Classes & Workshops Monuments & Statues Theme Parks Climbing Tours Motorcycle Tours Tours Club & Pub Tours Movie &
TV Tours Walking Tours Coffee & Tea Tours Multi-day Tours Water & Amusement Parks Concerts & Shows Museums Water Parks Cooking
Classes National Parks Waterskiing & Jetskiing Cultural Tours Natural History Museums Windsurfing & Kitesurfing Cycling tours Nature &
Wildlife Tours Wine Tours & Tastings Dams Night Tours Wineries & Vineyards Day Trips Observation Decks & Towers Zipline & Aerial Adventure
Parks Dinner Theaters Observatories & Planetariums Zoos Distillery Tours Off-Road & ATV Trails

3) That makes it super hard

High supply
acquisition costs
High customer
acquisition costs
+ Low basket value
= Reason to stay away

Why is it changing
now?

Hundreds of companies are wiring up
supply, providing accessible reservations
and business management technology.
They are bringing all of this fragmented
supply into the online travel ecosystem.

2) Travelers want it

Source: Quartz

Actually, they’re
already there

Online
Offline
Tours & Activities Booking Perception:
Ask travelers how they shop and book, and this is what
they tell you.

3) Their phones
demand it
The rise of mobile is driving last-
minute digital shopping and booking

Source: Phocuswright, BeMyGuest & Arival
The Booking Window, Southeast Asia
0%
10%
20%
30%
40%
50%
60%
1-2 days 3-7 days 2-4 weeks 5-8 weeks > 2 months
Hotels Tours, Attractions

How does the online travel industry
capitalize on this opportunity?
Start with these two approaches:

1) Tours & Activities =
Hotels

First, we must stop treating tours and activities like hotels.
They are nothing like hotels.

2) Solve for a different
question

Online travel has become very good at
answering this question:
Where do I want to stay?

Consumers of tours and activities are asking a
very different question:
What do I want to do?

Does the traveler prefer art or adventure? Would they
rather visit a museum or an amusement park?
Solving for this question requires fundamentally
different approaches to the user experience. Travel
brands must innovate new digital paths to purchase,
and we are just getting started.

Get more insights on the
Best Part of Travel at
See All Arival Reports
Here

Douglas Quinby
Co-founder & CEO
douglas@arival.travel @arivaltravel
Thank
You!

Are Tours, Activities & Attractions Really Online Travel’s Next Big Thing?

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