It could be a case of history repeating. In the late 1990s, as Internet shopping set off a tectonic shift in the retail industry, startups played a key role in helping small-business-owners adapt. Now startups are reprising that same role in a different industry: tours and activities. And it seems the consequences might be as far-reaching.
Booking day-tours and other activities while on vacation in a foreign land was always a challenge. Most travelers tended to leave the arrangements up to their hotel concierges. Nowadays, of course, mobile-phone-toting millennials are just as likely to be staying at an Airbnb as they are at a hotel. That presents a problem for the tour-operators – and that’s where the startups come in.
One of the first opportunities identified in the tours and activities industry was that it consists of many small-scale operators that are unlikely to have the knowledge or resources to develop the kind of one-stop-shop websites that modern travelers now expect. Marketing, inventory management, booking and payment processing functionality are now essential for tour operator websites, but developing them from scratch can be a daunting and costly task. Startups such as Voyagin and Xola, which Rakuten has invested in, as well as Rezgo, Zaui, Rezdy and AnyGuide recognized this problem and have now seen success in offering cost-effective tools for developing such sites.
Many other opportunities still exist.
One segment of the industry that is gaining significant momentum is “local travel,” which offers novel experiences off the beaten track. Large cities such as London, New York, Paris, Tokyo, Hong Kong and Singapore have such a variety of offerings – from niche-focused tours to hands-on workshops and classes – that even local “travelers,” who live in the cities in question, are constantly on the lookout for new, intuitive and intelligent tools to navigate their options.
Another challenge for tour operators and tech entrepreneurs alike is the barrier of language. Asia, for example, offers a multitude of travel destinations, each rich in culture and cuisine that would take a lifetime to fully explore, but the linguistic divide between those destinations and the rest of the world can render them inaccessible for the majority of travelers. Surely it is just a matter of time before mobile phone-based tools usher in an age of genuinely cross-border travel and immersive cultural experiences.
Opportunities such as these seem endless, and the tours and activities industry is bound to continue to show phenomenal growth for several years to come. To date, the biggest challenge has been to persuade the thousands of operators to invest their time and money in new technologies. The rise of a new generation of tech-savvy travelers and opportunity-attuned investors may well force their hands.