‘Customers will pay for a unique experience’

Just yesterday morning, I was sat at my desk in London. Now I am half a world away, in a dimly lit hall, surrounded by chaos and very shouty Mexican people watching two very large luchadores pretending to beat the hell out of each other.

It is the kind of immersive, transformative experience only travel can deliver, and though my holiday has only just started, already I can barely recognise myself.

I mean this figuratively, but also literally, because I am wearing a Mexican wrestling mask.

This is the first of several “experiences” I have booked for my trip and I’m already hooked on them. Not only have I spent the afternoon chatting with a group of very friendly people from all over the world, I have learned about the rich history and traditions of this crazy sport. I have also designed and made the mask I am wearing. A fact I am proud of, even if it’s a bit more “gimpish” than I was aiming for.

While I may be new to the tours and activities idea, it is certainly not a new concept in travel. It’s easy to see why it has attracted so much attention of late, and is widely considered to be the fastest growing part of the travel industry.

Many travel agents are finding it harder to compete in a world where commoditised hotel and transport products are driving down overall commission rates and driving up customer acquisition costs. The tours and activities sector represents a valuable opportunity for agents to differentiate, and customers are willing to pay for a unique experience.

There has also been a flurry of investment activity in recent years. Trip Advisor acquired Viator back in 2014 and Airbnb launched a Trips platform back in 2016, and seems to be ramping up the proposition. Berlin-based Get Your Guide and Hong Kong’s Klook raised huge amounts of private equity funding in 2017, while Tui Group acquired Milan’s Musement in 2018.

Yet despite this, the sector remains highly fragmented. Globally, tours and activities are said to represent £150 billion of annual spend, but the vast majority of sales are still generated offline and booked with local independent operators in-destination.

A huge prize is on offer to the company that can consolidate the market, so you can expect to see a lot more activity in the coming years as traditional operators, investors and incumbent platforms seek to use their strength and assert their dominance.

Back in Mexico City, it’s a similar story in the wrestling ring.

Martin Alcock is director of Travel Trade Consultancy