When one reads articles like Tnooz’s recent piece on Foursquare accepting instant restaurant bookings, it’s easy to jump to the conclusion (as our dear editor did) that tours and activities must be next.
After all, a popular app enabling instant bookings of tours and activities nearby is just so obvious that a casual observer might wonder why FourSquare (or indeed any of the popular location-based mobile services) hasn’t done it yet.
Turns out, while there are some great efforts towards this already, it’s still incredibly hard for most tours and activities companies to deliver on.
In a travel industry where electronic ticketing for airlines is (for the most part) a reality, where you can make a hotel reservation literally in the lobby and then stroll up to the desk to check in, the activities space is still comparatively in the stone age.
The consumer problem, part 1
Let’s get under the hood of a typical booking for one of the most popular activities sold online today: The city bus tour. Let’s say you book this bus tour online on your favorite activities site. You choose your date, the time, and the route.
You then enter your credit card information and check out. A few clicks later, and you’re confirmed. After this, in many instances, you’re sent a voucher.
This voucher is a PDF that contains all the instructions on where your bus tour starts, when it departs, etc. You’re requested to print this voucher and bring it to the bus tour’s office to start your tour.
The above is already problematic for a consumer. He just booked online, and then is instructed to print something out and bring it along.
This often means added expense and/or hassle for customers that are already in-destination, leading them to the obvious conclusion that booking the bus tour online requires more effort than just turning up at the bus tour’s office and booking there.
The consumer problem, part 2
Since many activity suppliers have to plan for the upcoming day’s bookings (imagine the bus operator having to allocate drivers for the coming days, or the kayak operator having to allocate guides), the activities sector still throws yet another hurdle at the consumer: booking cut-offs.
While decreasing in occurrence, it’s still more common than not to encounter a minimum 48 hour booking deadline to book an activity online. Again, problematic for the consumer. The industry is telling him to book online, but at the same time, preventing any sort of impulsive buying.
For the consumer it’s more tempting to turn up at the supplier’s office and book there in person than even think of using a mobile app.
The supplier problem
With the assumption that the consumer was convinced to book ahead, print out the voucher, and actually remembers to bring it, we end up with a customer showing up at the suppliers’ doorstep with a piece of paper — the magic voucher.
Incredibly, his piece of paper may look very different from the piece of paper the next customer is holding. Or the one after that. In fact, some popular activity suppliers have entire binders of all the vouchers they’re able to accept.
There could be dozens of variations. But either way, without this magic voucher, the supplier won’t let you board.
Because that’s how the supplier gets paid. That’s right: The very piece of paper the customer is holding is collected by the activity supplier and added to a redemption report.
This report is then sent back to the online seller of the activity, who then pays the supplier for all the vouchers that were redeemed.
Much like the airline sector with its paper tickets, the activities sector invented its own form of currency called vouchers. It’s been this way for decades. And like any established system of currency, getting people to change is hard.
From the inherent inefficiencies (online sellers of activities love breakage: selling a voucher that’s never redeemed) to the well-oiled operational efforts that suppliers are used to, changing to a new form of currency looks near insurmountable.
Where we are today?
Established players and startups alike have been working on this problem for years. Some have made great headway into solving the consumer problem: allowing him book instantly and just show up with a photo ID.
But so far, these efforts have been both commercially and technically fragmented. For example, each major seller of online activities has their own extranet for activity suppliers to manage supply and inventory on their site.
So, today, an activity supplier may have to divide their available inventory between the extranets of all the online sellers that are delivering him sales.
And if something changes (say the activity supplier’s kayak guides call out sick), he has to log on to every one of those extranets and adjust his availability for that period.
Some activity suppliers are doing this with up to 25 extranets. Day to day, a herculean task. And on the redemption side, having to log in to a variety of extranets to verify whether the customer standing in front of their office has actually paid can be quite the hassle on a busy day.
Learn from industry peers
Strewn with problems, is this situation solvable? Absolutely. The activities sector need not look very far: Both air and hotel sectors have worked this out for their incredibly complex, and, in the case of hotels, very fragmented spaces.
In air, electronic ticketing started in 1994 but was languishing with only 20% adoption a decade later.
Things only really got moving after IATA, the industry body that represents the supplier base in the airline industry, set an aggressive deadline of 100% adoption in four years.
They mostly got it done. And it happened with a standard that every supplier talked to, no matter their underlying technology system.
While air’s solution is not entirely appropriate for the activities sector, the idea of any supplier or distributor being able to sell and validate a ticket is an important one.
Just do it
As mentioned above, current efforts to solve these issues in the activity sector have been led by resellers of activities. While all noble in their intent for the consumer, they’re creating further silos and barriers for an efficient distribution market.
In an industry with hundreds of thousands of suppliers, the fragmentation for back office and technology systems will only grow as suppliers move their business online, meaning it will be incredibly hard to establish a commercial standard.
The sector desperately needs a common, neutral way to handle these issues. So far, only a select few have stepped up to the plate to offer a solution. Even fewer have bothered to pay attention or to try to run with those efforts.
Perhaps it’s the industry’s biggest suppliers that need to come together via a standards body like OpenTravel to solve this incredibly important task.
A task that, all sector hype aside, is the true key to unlocking the tours and activities sector.
NB: Tour bus image via Shutterstock.