Skift Take
Consumers are increasingly interested in experiences. Three executives discuss how they think about the sector and how to attract new customers.
The experiences sector has seen a boom in recent years as travelers are choosing to spend more money on experiences than possessions. Skift Research’s Venture Investment Trends in Travel 2024 report revealed experiences was one of the few sectors in travel to see an increase in venture capital investment.
But defining the experiences sector is a challenge. Tao Tao, co-founder & chief operating officer of GetYourGuide, Eric Gnock Fah, president and co-founder of Klook, and Kristin Dorsett, chief product officer for Viator, discussed industry trends at the recent Skift Global Forum in New York.
You can watch a video of the discussion below.
Five Key Points
Diverse Offerings in Experiences: The concept of “experience” encompasses a wide range of services, including day tours, multi-day excursions, activities, in-destination services, and transfers. Different companies define this category based on consumer needs, with an emphasis on tours, activities, and attractions tailored to specific markets, such as American travelers or Asian travelers.
Importance of Specialization: Companies are finding that a one-size-fits-all approach is ineffective in the experience market. Given the diverse nature of experiences, businesses need to focus on specific categories and geographical markets to effectively meet customer needs. For instance, understanding the Asian travel market requires insights into local preferences, payment methods, and cultural nuances.
Role of Technology and Personalization: Leveraging technology, particularly machine learning and AI, is crucial for helping customers navigate the vast array of experiences available. Companies are working on personalizing recommendations based on user data, which helps to highlight relevant activities among similar options, like the many tours available for a single landmark.
Marketing and Brand Positioning: Strong brand differentiation is key in a crowded market. Companies like Viator and GetYourGuide are focusing on building their brands and educating consumers about the experiences they offer. This includes innovative marketing strategies, such as influencer partnerships and leveraging social media to showcase the emotional and personal aspects of travel experiences.
Challenges of Supply and Demand: The discussion highlights the ongoing challenge of balancing supply and demand in the experience market. Many operators are still offline, and there is a need for a robust supply chain that can handle diverse experiences effectively. The complexity of this market means that companies must invest heavily in both technology and supplier relationships to ensure a seamless booking experience for consumers.
Discussion Summary
The discussion revolves around defining and understanding the category of experiences in travel, which includes day tours, multi-day tours, activities, and transfers. Kristin Dorsett, chief product officer for Viator, emphasizes that the focus is on what American customers desire when traveling, primarily tours and attractions.
Eric Gnock Fah, president and co-founder of Klook, discusses a broader perspective based on in-destination needs, including transportation options. There is a consensus that the experiences market is complex, with many nuances that require deep expertise.
Dorsett points out the importance of a specialized booking platform for experiences, as much of the market remains offline, and many operators lack the necessary infrastructure. Eric Gnock Fah highlights the differences in booking behavior, noting that customers increasingly book experiences spontaneously during their travels.
Brand positioning is also crucial, with each company aiming to differentiate itself. The use of social media and influencer marketing is noted as vital for reaching younger, more independent travelers. There is discussion about the challenges of balancing curated offerings with the need for diverse supply, and the emerging competition from platforms like Airbnb. Ultimately, the panel expresses excitement about the growing attention on experiences as a significant segment of the travel industry.