The online travel agency is making shifts to how they scale Experiences supply. Finding the right approach for online tours and activities isn’t easy, even for the most successful digital travel brands.
Booking.com representatives sent letters to some tour operators and attraction partners stating that the online travel agency (OTA) is not adding more Experiences to its product set.
According to several sources, existing Experiences will continue to be available for viewing and booking, but the OTA will cease adding new products. Additionally, the commercial Experiences team will be restructured.
While we don’t know the definitive reason for this freeze, several operators indicated off the record that, while sales via Booking Experiences were growing, the OTA was still well behind other online tours and activities players.
When reached for comment, Booking said there is no change to their Experiences category.
“Nothing is changing with respect to our strategy in experiences and our commitment to the connected trip. It remains a priority investment area,” says Leslie Cafferty, SVP and head of global communications at Booking Holdings. “We are making some minor shifts to our team structure internally, but this is only to help ensure our structure is right for success in the future.”
Expectations for Booking Experiences remain high because of the company’s success in online travel: Booking Holdings is the largest online seller of hotels and the largest online travel company by market capitalization. When you’re the largest, there’s real pressure to perform—and in Q3, Booking fared better than other online travel agencies. The company’s revenue for Q3 of 2019 was $5 billion, a 4% increase from the prior year, vs. just under $3.6 billion for Expedia. Despite bright Q3 earnings, Booking stock fell 8% in early November. During the same time period, the stock of competitors Expedia and TripAdvisor both fell by double digits. Booking CEO and President Glenn D. Fogel said in the Q3 earnings call the company plans to be disciplined in its pursuit of internal investments.
The news came as a surprise to some in the tours, activities and attractions industry.
According to Christian Watts, founder and CEO of Magpie Travel, who has run hop-on hop-off bus tours in San Francisco for years, there were indications that Booking.com would make some changes. “There were rumors of some changes in priorities, or perhaps a different focus,” said Watts. “I don’t think they will be pulling out of the sector entirely. My guess is that they will use their FareHarbor sales team to pivot slightly to source product for Booking.com, and use the FareHarbor platform as their new CMS.”
What’s also unclear is what this means for operators hoping to get their products listed on Booking, as well as the impact, if any, on FareHarbor, the tour operator reservation system company that Booking Holdings acquired in 2018. Arival has reached out to FareHarbor for comment.
Stay tuned on arival.travel as we learn more about this development.
