Livn CEO Mark Rizzuto Talks Tours & Activities at Web in Travel Singapore 2018 Conference
The Web in Travel (WiT) 2018 Conference, which recently took place in Singapore brought together more than 500 industry professionals to discuss the influence of technology on travel and tourism.
The It’s Getting Hot in the Experiences Kitchendiscussion panel featured Livn CEO Mark Rizzuto, alongside Graham Hills (CCO of BeMyGuest), Jeff Lewis (VP at TripAdvisor), and Zishan Amir (General Manager of Mega Adventure Group). The emerging influence of technology on the Tour & Activity (T&A) sector dominated the conversation. The panel was moderated by Maggie Rauch, Senior Director of Research at Phocuswright.
Key points from the panel:
- Current research shows only 20% of global T&A bookings are made online. This represents a huge opportunity for the sector to evolve.
- The key explanation for low take-up of online booking is supply-side inefficiency. Most importantly, a lack of access to real-time inventories.
- This prevents last-minute booking of T&As online. It’s a huge market, but the majority of in-destination bookings are still made offline.
- Partnerships with hotels have space to progress, as does collaboration with airlines.
- Developing infrastructure that supports booking on mobile devices while in-destination is critically important for the industry.
- APAC market is growing rapidly while travel resellers should be looking at making the right partnerships to ensure they can meet customer demands.
Data trends observed by Phocuswright formed the basis of the panel discussion; the first being that only 20% of global T&A bookings are made online. The panel agreed that this disparity is even greater in the Asia-Pacific region, estimating that up to 90% of reservations are made offline.
Rizzuto explained that there are “enormous opportunities” for bricks-and-mortar travel agencies to begin shifting their business booking processes online; not only to capitalise on substantial waiting demand, but to make efficiencies in running costs.
The panel was asked what might be expected to happen when the ratio switches to an online booking majority, particularly in terms of who might take a leadership role. Lewis suggested that it might actually be the suppliers themselves, as their offering is likely to grow faster than that of online travel agencies (OTAs).
The panel also discussed reasons why the take-up of online booking has been so persistently low. They agreed that it was largely a supply-side problem, with a particular focus on technology holding the sector back. While online T&A booking does exist, the current infrastructure doesn’t provide adequate support for last-minute customer decisions.
Looking at the statistics, it’s clear why plugging this gap is critically important; 20% of bookings happen on the same day, and 38% occur up to 2 days in advance. The sale of T&As to customers while they are in-destination is thriving, but the overwhelming majority of these transactions are completed offline.
The reason for this, according to Rizzuto, is because access to live inventories of T&A products is severely limited. Below-the-surface challenges have therefore prevented the travel industry from tapping into a tremendous opportunity.
Rauch described a study of US tourists, in which more than half of respondents looked up reviews for local activities on mobile devices whilst they were in-resort. Again, this demonstrates the potential market that awaits the sector if the relevant technology can be properly finessed.
Discussion then moved onto the influence of hotels in supporting these transactions. Hills explained that hotels tend not to engage with guests online once they arrive. Any communication beyond check-in and use of hotel facilities is limited, and online communication while customers are on the property is especially rare.
The panel agreed that there is great potential for even stronger partnerships between hotels and companies offering T&As. Rizzuto shared his recent experience of speaking with mobile developers who are looking to find out how they can monetise existing apps. With a particular focus on in-destination experiences, out-of-industry players are keen to get into the space and tap into an underexplored dynamic.
Amir made an excellent point regarding weather as an influencing factor in the timing of T&A bookings. He used Singapore as an example, explaining that the weather forecast of any given day has a significant impact on bookings made with his own company. Customers want the chance to book last-minute if they know that the rain will hold off, but the overwhelming majority of these transactions are still completed offline.
Rauch prompted the panel to discuss the influence of airlines in this process. Rizzuto highlighted that interest in linking these components does seem to be going in the right direction. This coincides with airlines developing a better understanding of each traveller’s complete journey; from planning through to booking, pre-travel, the journey itself, and time spent in-destination, as well as the touch points they can interact with.
Finally, the panel discussed the importance of trust within the travel industry as a whole, concluding that better provision of online booking might depend on partnerships.
The discussion had a global focus, but there was frequent acknowledgment of the unique characteristics of the APAC market. The panel expressed optimism in the potential of this market to grow, once the technological barriers have been removed.