Vicky Karantzavelou –
Proving that travel really is about the experience you have once you arrive in your destination, the sale of travel activities, such as sightseeing tours, events and attractions in the United States outperformed the overall U.S. leisure travel sales market during 2009’s market turmoil by 11 percentage points, according to the soon-to-be released PhoCusWright study “When They Get There (and Why They Go).” This trend is expected to continue as online sales of activities in the U.S. are expected to grow by 13 percent this year and 11 percent in 2012, outpacing U.S. online leisure travel sales overall, expected to grow 8 percent and 9 percent respectively.
Trip activities account for $26.8 billion[ii] of the U.S. travel market, which is more than car rental ($14.2 billion) and cruise ($12 billion) – combined – and nearly three-times as much as packaged travel ($10 billion), according to the report. Of that total, PhoCusWright identifies $20.8 billion as “addressable”[iii] by traditional online and offline travel channels.
Viator.com, the leading resource for researching and booking nearly 6,000 trip activities in more than 450 destinations and a sponsor of the study, revealed its booking data supports the U.S findings and indicates similar trends in regions around the world as more than 50 percent of Viator’s sales are generated outside the U.S. Over the past two years, Viator reported strong growth in the U.S. despite the economic climate as more travelers sought to purchase their activities for U.S. and international travel in advance of departure. And, as demand for travel began to slowly return, Viator.com sales grew by more than 50 percent in 2010 and 2011 sales are already outpacing last year.
“We’ve been watching traveler behavior around trip activities for more than 15 years and we’re in the midst of a shift as travelers are more inclined to purchase trip activities in advance now than even two or three years ago,” said Ms. Barrie Seidenberg, CEO and president, Viator. Inc. “Hoping to make every dollar count, travelers are carefully researching and planning their travel. Useful tools like access to timely and unbiased reviews by like-minded travelers and finding off-the-beaten track options in real-time are things a concierge or guidebook just can’t deliver in the same way.”
From its unique global position within the industry, Viator is connected to every part of the activities distribution channel – from the smallest mom-and-pop local operators to consumers to global affiliate partners – and has observed all aspects of the cycle, identifying a number of trends and related predictions for 2011:
Advance purchase of travel activities will continue to rise – Just 20 percent, or $4.1 billion[iv], of the addressable U.S. travel activities market was sold online in 2009, but PhoCusWright estimates the portion of sales in the U.S. sold via online intermediaries like Viator will have the highest rate of growth of all online channels, doubling by 2012. As travelers seek more value, they are more inclined to purchase activities in advance to avoid sell-outs, lock in prices, and find unique and “behind-the-scenes activities” such as Viator’s growing collection of “skip the line” tours that save precious time and come with a best-price guarantee.
Travelers are looking for extraordinary experience-driven activities – More than two-thirds of Viator’s sales are for “considered purchases” or activities that are core to, not just an add-on to their trip. Activities like special access to iconic attractions, private tours and unique, highly-localized experiences will continue to grow in 2011.
User-generated content is driving more travelers to book online – More than 3 of 4 active travelers surveyed said traveler reviews and photos are “very” or “moderately influential” in their purchase decisions. With 250,000 traveler reviews and photos, Viator has seen this trend first-hand, observing higher conversion rates among those activities with user-generated content.
More travelers will be booking shore excursions online – The study revealed that travelers purchased $1 billion in shore excursions through the cruise lines in 2009. Viator views shore excursions as a large and growing opportunity, launching a “Worry Free Shore Excursion” category in 2010 to help those cruisers find more selection, better prices and independence from the cruise line crowds.
Mobile will play a larger role in activities research and booking – Nearly 2 in 3 travelers with mobile devices say they are likely to use them to research and purchase activities in the future. Though mobile sales are still a very small part of the overall market (less than half a percent according to the study), Viator’s existing mobile platforms have performed well, and plans are in place to expand its mobile services to better serve travelers in destinations later this year.
“We’ve long known what the study reveals – that activities are an extremely relevant part of the travel industry and travelers know the value in researching and purchasing them online before they go,” Seidenberg continued. “Travelers will continue to gravitate to those players that provide meaningful content and resources, enable easy access to activities via mobile and offer more compelling deals in advance as well as in-destination.”