NB: This is a guest article by Rod Cuthbert, founder and chairman emeritus at Viator.
The news that European startup GetYourGuide has secured $2m in funding (and from an impressive list of travel-savvy investors) should be welcomed by incumbents in the tours and activities marketplace.
That statement, coming from the founder and former CEO of Viator, the dominant player in the space since 1999, may surprise some readers.
Some explanation, then, is in order, though not before clarifying my vantage point as I write this, which is very much one of the industry observer, not having been active in Viator’s management or board for some time now.
Where we came from
Historically, the tours and activities sector had long been a poor cousin in the travel industry.
It’s been the realm of hotel concierges, specialist inbound operators, cruise companies and last-minute, in-destination bookings by harried travelers clutching their travel guides, wondering if this particular tour would be the best way to see Alcatraz, or the Palace at Versailles, or wherever.
None of those industry players saw any need to crow about the money they were making through their over-the-top commissions, and none were keen to disrupt their cosy market by embracing the internet, even when it began to play a dominant role in the booking of other travel products.
Then Viator stepped into that space – with an approach that ran counter to the advice of industry insiders – and has prospered to the point where its myriad web sites, mobile platforms and affiliate partners have served over three million customers.
More importantly, its business model is the basis for most of the activities specialists that have emerged in the last ten years.
Thatâs not what I would call a competitive landscape. While Viator will no doubt continue to grow and innovate in its own right, what is lacking in the broader tours and activities space is the same type of spark the sector saw some 13 years ago, but we have not seen anything near that to date.
Where are we all going
There have been, certainly, some high profile entrants with plans to turn the market on its head, but what typically follows is something that looks very familiar.
A decision to follow rather than innovate leaves these entrants playing catch-up, making it hard to gain real traction. Itâs perhaps too soon to say whether GetYourGuide will follow that same path.
Letâs hope not: this is a sector with untapped opportunity that will truly benefit from new players with imagination, the courage of their convictions, and the funding to back their plans.
It looks like GetYourGuide has all those things, so it would be sad to see those crucial assets wasted on a “me-too” approach.
PhoCusWright, in its 2011 report on the sector, said:
“US travelers spent $26.8 billion on activities in 2009 … The travel activities market is nearly twice as large as the car rental segment and larger than cruise and packaged travel combined.”
And the report was only talking about US travelers, not the Europeans (who travel more often) or the Chinese (who donât believe in “free time” on vacation) or the millions of newly-minted middle-class travelers from the sub-continent (who are on their way to the Moulin Rouge, Alcatraz, Stonehenge, Kakadu and Luxor as you read this).
As new entrants become established and grab their own slice of that enormous pie, established players need not fear of their own slices getting smaller.
As more travelers enjoy the benefits of advance bookings the unavoidable laws of supply and demand take hold, decreasing the pool of available tickets available for last-minute, in-destination bookers, leaving more and more frustrated travelers saying “we should have booked that before we left home”.
If youâve had that experience yourself youâll know itâs a lesson you only need to learn once.
So good luck to the team at GetYourGuide. This is a big space and it needs new entrants, with new ideas, plenty of money and enough energy to push the market in new directions.
And thatâs good for everyone.
NB:Â This is a guest article by Rod Cuthbert, founder and chairman emeritus atÂ Viator.