In 2023, online travel agencies (OTAs) stood out as the fastest-growing sales channel for experiences, as demand for travel returned in earnest and more and more travelers looked to book their things to do online.
OTAs have dominated the tours & activities news cycle this year, with many of the top-read articles on Arival being related to Airbnb Experiences, Viator and GetYourGuide (even though articles on these three OTAs represented less than 10% of our total published content in 2023). In some ways, these experience-focused companies serve as an indicator for our sector, and knowing what’s trending with OTAs can help operators plan for the year ahead (whether or not you rely on OTAs for your own business and bookings).
So with 2024 fast approaching, we checked in with Johannes Reck, CEO of tours, activities and attractions OTA GetYourGuide, to discuss what’s next on the horizon for the Best Part of Travel. Here are a few top takeaways from that conversation.
Move Over, Flights & Hotels: Experiences are the Core of the Trip
The global travel market is expected to approach $270 billion in 2024, up from its pre-pandemic high of $254 billion in 2019, led by North America and Europe with Asia catching up, according to Arival’s latest data. While some consumers may be tightening their belts in some areas due to the ongoing economic pressures of inflation, the experiences sector isn’t one of them. As Arival’s latest consumer research indicates, travelers intend to increase their spending on experiences in 2024.
“Consumers are seeking experiences more than ever,” shared Reck, “the way I think of experiences these days it that’s the reason why you travel.”
Reck observed that although in the past people have thought about experiences as add-ons on top of hotel and/or flight bookings, this is changing. “The pyramid has really inverted in the sense that today you think about what are my interests, what do I want to do,” Reck explained. For me the experience is the core of the trip.”
And the rest of the industry is taking notice. At the recent travel technology Phocuswright conference, the word “experiences” was almost as hot of a topic as AI: it was made clear that the travel industry wants a piece of experiences.
AI Won’t Replace Humans in Experiences
It’s no secret AI has been one of the hottest topics in travel (and in general) this year. And while there are a growing number of ways to use AI in travel, Reck doesn’t believe experience operators have anything to worry about, because experiences in particular are about human connection.
“We believe that fundamentally humans seek connection, humans seek unforgettable memories,” said Reck. “Humans do not want to stare at their screen when they go to a destination, a great sight, an experience. What they do is they want to connect with their environment, they want to connect with other people.”
Reck shares a few areas GetYourGuide is using AI — such as in uploading, optimizing and translating content — as well as areas they are looking at integrating generative AI, including customer service and price optimization. However, he emphasizes that in terms of the experiences themselves, human operators still hold the competitive advantage.
“I think we’re probably one of the most defensible areas of AI there are because ultimately experiences are about human connection and not about the computer screen.”
Customers are Hungry for Niche Categories
In terms of the types of experiences that are trending, OTA categories can be a helpful indicator. Going into 2024, travelers are looking for more unique experiences.
“We see a lot of niche and interesting categories that are coming up,” Reck shared. “Food experiences for instance are very big, up and coming, market visits, cooking classes, workshops…” in other words, travelers are hungry for culinary experiences.
This lines up with Arival’s latest consumer research on the 2024 U.S. Experiences Traveler, which showed that culinary tourism — food and/or beverage-focused tours — are one of the most popular and rising categories among travelers.
But culinary isn’t the only category trending. From volcano tourism to literary tourism to immersive experiences like Imagine Experiences’ “Bond For a Day”, niche is in as travelers look for experiences tailored to their interests, and this is opening up a whole new world of possible types of experience products for operators willing to innovate.
“That’s also where AI can play a really nice role,” added Reck, “because you can help these very small, medium sized suppliers generate a product very quickly and see whether it sells and then experiment with our marketplace and our consumer demand and really match these consumer interests.”
What’s Next For Experiences & OTAs at Arival 360 | Berlin
Join us in March at Arival 360 | Berlin to learn more about what’s next for tours, activities and attractions in 2024. Johannes Reck will be speaking on the main stage, and we’ll have another always-popular session on working with OTAs as well.
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