2 months ago
 

In-destination is worth billions but without mobile, forget it

This is a viewpoint from Robert Meza, head of travel at the ENTERTAINER.

A game-changing conversation has been taking place in the boardrooms of major OTAs lately. They are finally catching onto the tremendous potential of providing experiences to travelers once they get to a destination.

The in-destination market has long been ignored in favor of the flights and hotel booking business. From a money making perspective, this doesn’t make much sense – the reason most people travel is for unique experiences on the ground. Until recently most travel companies ignored this vast opportunity, or simply used tours and activities as a means to upsell.

But now the reality is that mobile technology has advanced enough to become the driving force of the in-destination market. The pipes are now in place to deliver seamless instant digital experiences from suppliers to smartphone devices.

Changing times

Let’s take for example Expedia, which moved its T&A Local Expert division onto its app in 2015, betting big with a $6.4 million investment for US promotion. Booking.com launched its app­-based Booking Experiences initiative in 2016 allowing travelers to instantly book and pay for attractions. According to comments made at this year’s Phocuswright Europe conference, they have been testing in a few key markets and the results are so far quite positive.

Even Airbnb has caught on and launched its Trips platform last November, hawking “live like a local” experiences hosted by experts oozing cool factor. You might have even seen its new marketing collaboration with Millennial-minded VICE, sending lucky winners to trendy destinations such as Cape Town, Paris and Tokyo, for once-in-a-lifetime hyper-local adventures.

Figure it out

According to Phocuswright, which has extensively researched the in-destination market, travel activities, tours, attractions and events alone were worth about $135 billion worldwide in 2016 – dining and shopping not included.

Elsewhere, new research from eMarketer shows that desktop travel bookings are sharply declining in the US with mobile sales set to total $75.85 billion this year, up 16.7 percent from 2016. Global travel, tourism and hospitality is clearly maneuvering in this direction, so best to hop on board or get left behind.

There are several innovative startups already attempting to stake a claim in this evolving space, such as Musement in Europe, and Klook in Asia, and of course established non-traditional OTAs such as Tripadvisor, which acquired Viator, a tours and activities engine considered the first in this field.

To be sure, Airbnb’s Trips platform and others present healthy competition, but the market is wide open and large enough that it could still be anybody’s game.

Plenty of room

After all, most travel players did not start pursuing mobile as their primary play until recently. A “mobile-second strategy” ensures that mobile always comes, well, second. Expedia admitted to a “mobile-second strategy” until its 2015 shift.

The in-destination sector will grow to suit what customers are craving –  on-demand, on-the-go access – whether larger OTAs or innovative startups shine enough of a spotlight in there or not.

Large and fragmented supply, together with basic technology and this lack of direct attention from the big fish, are a budding opportunity for companies who aren’t afraid of risk-taking and real ingenuity. Mobile companies that take the time to carefully connect the dots within the sector, forming widespread networks and lasting relationships, will be in a prime position to reap some pretty powerful benefits.

Mobile applications

Mobile is pushing innovation in the in-destination market like never before. Bigger brands are beginning to seek out new ways to entice and delight customers during their travels. For example, a telco that sells tourist SIM cards could use a mobile in-destination platform for added value, whereas airlines could benefit from such a platform as a means to connect with customers via loyalty programs.

Consumers want to use their devices to explore, experience and share their travel. In the age of instant gratification there is no reason why companies should not meet these requirements. At the end of the day, it’s the things that people do on holiday that inspire travel in the first place. Those are the travel moments they value – arguably, much more often than a stress-free flight or even a nice hotel room.

Building an in-destination mobile experience requires a lot of working parts to synch and align – dining offers, day planners, guides, and instant booking of tours and activities, or what have you.

And customizing for specific partners, whether telcos, airlines or even financial institutions who want to connect with customer loyalty, adds another layer of sophistication and opportunity.

But in the long game of trendsetters and trend followers, it’s important to know which side you are on. In that way the work can be very well worth it.

This is a viewpoint from Robert Meza, head of travel at the ENTERTAINER.

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  1. Uwe Hering

    I can only agree on the article above…but one more tweak to it: combine local expertise with tips from the users own network and allow to mix it with his own findings. Closed systems do not give you such a freedom. A user also wants to make sure that not everything he saves it spread in the world. I’m biased as I’m the founder of http://www.myLike-app.com but that’s why you start something new – because you see the need for change. We have developed a open platform everybody (private users but also companies like hotels, OTAs, magazines, blogger, limo services…) can add their insider tips and decide who can see them. If you look for a tip just select the sources you want to use – even down to a single nam – and you get relevant tipps which are relevant for you. Check it out. Uwe

     
  2. Martin Owen

    Your piece is very accurate in that the market is looking at experiences and booking those in destination rather than before. It appears that tours and experiences are being booked within 72 hours of arrival. The problem is that most of the OTAs and even the the non traditionals like TripAdvisor and Airbnb have very limited truly local content. They don’t have the boots on the ground to sign up the local tours. They should be partnering with local content providers who do have the concentrated local content. In Northwest Florida, TripShock.com are a good example. I’m biased, as they’re a client of mine, but there are others who can provide the ultra local content around the world.

     
 
 

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