I recently reviewed some of the data from Rezgo and found some really interesting statistics that speak to the way travelers book their in-destination activities when operators provide real-time availability and instant confirmations.
We have always known that activities tend to be the last thing that people book when they go on holidays.
For the most part this is due to two important factors:
- For online travel agency sites that provide airport transfers and activities, these offerings are treated as an add-on at the end of the booking after flight, hotel and car. This makes it very easy to skip during the booking process.
- The majority of in-destination offerings are not available online. The ones that are provided are generally consolidated through multiple aggregators, such as a local destination marketing company and then the OTA.
It seems, however, that when the booking process is treated completed separately and the supplier has the ability to offer real-time availability, payment, and confirmation, the bookings tend to move closer to the date of travel.
Here are some of our findings:
- 13.6% are booked between 16 and 30 days of travel.
- 14.4% are booked between 8 and 15 days of travel.
- 52% are booked within 1 week of travel.
- Total of 80% of all bookings are made within 30 days of travel.
I was very surprised to see that over half of all bookings in the system are made within one week of travel. Unlike airline and hotel bookings that tend to average 23-30 days prior to travel, this seems to confirm that travelers are booking their activities much later in the travel cycle.
Given that most tour operators require a one or two day cut-off period for booking, it is safe to assume that the majority of the bookings are made between three and seven days of the date of travel.
So what does this tell us about traveler behaviour when it comes to booking in-destination activities?
First, the last minute nature of the bookings indicate that travelers are probably not thinking about things to do at their destination until they are close to the travel date.
This would seem to further indicate that the activities at the destination are probably not the reason why people are traveling to the particular destination.
Once people realize they are getting close to the departure date, they are thinking about what they might do when they are at the location and then deciding to book a few days in advance so they can avoid line ups or to just plan ahead.
Second, this booking pattern indicates that travelers are still more likely to book their air and hotel and confirm the major travel components before they commit to the “little extras” that make up their trip.
Without actually asking the customers why they choose to book only a few days before their travel date, it is hard to fully understand why they choose to wait until the last minute.
The opportunity about last minute behaviour, however, is that travelers are looking to book these kinds of activities and will do so with a short window.
This means that real-time inventory and the ability to book on mobile devices will become important.
Anecdotal research seems to indicate that 80% of bookings for activities are done in-destination, which means that there is tremendous room for growth in last minute online bookings, if the suppliers can support it.
With a PhoCusWright report focusing on in destination tour and activities coming out shortly, I am hoping we’ll be able to shed more light on traveler behaviour as it pertains to the booking of vacation activities.
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About Stephen Joyce
Hi Stephen,
Interesting stats. The activities to which you refer, would these typically be single day activities (eg whale watching off Vancouver Island) or do these include activities that take a few days (eg Inca Trail or organised hikes in Rockies etc)?
Cheers,
James
@James. Yes, these are typically one day or half day activities. The multi-day tours tend to have a longer lead time and are more expensive, so they tend to be planned well in advance.
Spot on analysis.
Just would like to add that one major pain of booking activities is that customers usually need to print and bring a voucher. Mobile ticketing along with the mentioned real-time inventory is definitely another hurdle to overcome to make in-destination mobile booking work.
@Tao Tao, we find the vouchering is only a pain for suppliers who sell through third party vendors such as Viator, isango!, and perhaps GetYourGuide(?), but because, in our case, almost 95% of the bookings are going direct to supplier, they don’t require a voucher because they have all the customer data and details at their disposal. These customers are also paying with credit card so there is no issue of payment. As we see more distribution of long tail product through third parties, I think we will see that some accepted vouchering format will need to be established in order to simplify the process for suppliers.
One category you did not discuss was ground transportation. For many North American travellers booking domestically the close in booking stats were quite interesting. For Expedia at launch we found that more than 30% of all transactions of rental cars occurred in the last 48 hours. However interestingly we found that only half of these had air or hotel bookings associated with them.
I agree with Tao Tao that the issue of vouchers has become a challenge – but most of the local providers of services now accept a valid confirmation number and a valid ID provided at time of booking. Thus only in fewer and fewer locations does this matter. The North American market has not really had vouchers as a major issue and these days the voucher is heading for sunset (in many cases) just like the paper airline ticket. When operators finally recognize that if you ask the fundamental question – do I need paper – in the way that airlines did – then you will see the voucher process decline.
Cheers
Timothy
@TOD, I agree with you and @Tao Tao. The voucher is a way for the supplier to know that you paid for something through a trusted third party. If all that data was communicated in real-time to the suppliers own CRS (be it airline, car, or activity provider) then the need for vouchers would be eliminated.
Hi Stephen,
Interesting data points here. Thanks for sharing your statistics! It’s great that you are willing to share!
The data do clearly indicate that people are *booking* very late in the cycle. But I found your statement “last minute nature of the bookings indicate that travelers are probably not thinking about things to do at their destination until they are close to the travel date” too much of a stretch. Do we really believe that travelers aren’t thinking about what they are going to do at a destination until they arrive there? Somehow I doubt that – I certainly don’t travel that way. If I take my family to San Diego, it’s pretty sure I’ve spent a lot of time thinking about the San Diego Zoo, Legoland, the beaches, and all the other destination activities, long before I decided to go there, even if I haven’t committed to any one thing.
I think what happens late in the cycle is the *commitment* to *purchase* activities. But many of the key destination activities either don’t require a purchase at all (walking around the Gaslamp Quarter), or can be purchased on the spot on the day of,(the Zoo, for example) – and so it’s not that surprising purchases are late in the cycle.
The travel industry seems focused on Products (things that can be sold, like a tour), vs Experiences (things you can do, perhaps freely), but I think consumers are more interested in Experiences than Products. Interested in your thoughts on the differences…(and we are also very interested in the results of the Phocuswright study).
That’s a great point Mark. I think you’re right that the commitment to purchase happens later on. Of course, we don’t know that for sure because we can’t measure intent or desire through the system. That said, in your case (with Goby.com) you have the ability to measure, to some degree, the desire to search for and find those experiences. For us, however, being a commerce based system, we can only measure against the purchase of the products. For almost all of our suppliers, the experience is the product. As you’ve probably found though, most suppliers of these experience don’t support any kind of booking on-line, so the customer may have the intention to do the activity but is waiting until they actually get to the location to commit with their wallet.
It would be cool if there was a way to compare “intent” data (likely gathered through search or other research methods) between activity-based searches vs logistics-based (flights, hotels) searches, to see which is researched first. Not aware of any research on that. As we are mostly about activities, and not flights, we don’t have an easy way to compare the two…..
One other question – do you think flexibility in dates for tour purchases would drive people to commit earlier? (I.e. If I can by a sailing tour of San Diego harbor now, but decide on the week of, which day I am going to go, would that increase the odds I would commit earlier?)
@Mark, @Stephen,
I agree with Mark that I don’t believe that people aren’t thinking about activities early enough. He’s right that it’s the activities and experiences are likely the reason that people choose to go somewhere in the first place. I think most people book flights and hotels first because that inventory is relatively more scarce (especially if you’re trying to use FF miles) and need to be booked further in advance. Then I think after that’s done, people kind of forget about booking the experiences until the trip is almost upon them. But that’s just my intuition of the issue.
Stephen – I agree, mobile technology is ideal for activity booking and planning. It should be part of every supplier and distributor’s mobile strategy.
Just a quick update on the stats and to add some context to the numbers. We have 3 ways of creating bookings in Rezgo, front-end or consumer direct bookings, back-end or supplier managed bookings (back-office), and third party bookings. Back-office bookings account for about 11% of all bookings in the system and third party bookings account for less than 5%. So the lead time is fairly reflective of consumer behaviour and not suppliers loading bookings.
Stephen -
Does that mean your suppliers are getting 89% “online” bookings and 11% “offline” (i.e. at their office)? That would be a surprising discovery!
Yes. That is exactly what that means! Off-line covers point of sale, phone, etc. (ie. managed booking). On-line is unmanaged. Remember though that this is an average. We have some very small suppliers who are almost all “offline”, but the volume of their bookings is very small and so they don’t have a big impact on the average.