What Will Happen to Tour & Activities Operators After COVID-19?

By Diego Montes

According to Arival, the Tour and Activity industry was valued at $254 billion in 2019, with a grand total of one million operators. This sub-sector within the travel industry has been growing at about 9% YoY, making it the third-largest travel sub-industry after flights and hotels. However, with the COVID-19 pandemic, the tours & activities market has come to a halt. We already analyzed what will happen to the travel industry after COVID-19. In this article, we're going to focus on the tours and activities market after the coronavirus pandemic.

The majority of travelers have booked travel online for years. However, tours, activities, and attractions continue to be largely booked offline, either in person at a ticket office or over the phone. The industry has been really slow in adopting digital channels. According to Trekksoft, more than 70% of the gross bookings are done offline.

In 2019, operators globally sold just 17% of tours, activities, and attractions through their websites and through OTAs. The biggest players in the industry include Viator, GetYourGuide, Expedia, Klook, and Airbnb Experiences.

How Has Coronavirus Affected The Tours & Activities Market

Tours, activities and attraction providers have seen a decline in bookings of over 85%. On average, operators expect more than 70% decline for 2020 compared to 2019. 

Arival made projections on a post-COVID-19 world. In their optimistic scenario, the gross bookings will fall by 64% in 2020 and predicts a full recovery by 2022. In their pessimistic scenario, the gross bookings will fall by 79% and predict a full recovery by 2023.

Who Has Been Most Affected By COVID-19?

WeTravel interviewed 590 travel companies worldwide to find out how they have been impacted by the pandemic. According to the results, 56% of the companies will expect a major revenue decline but maintain a positive outlook for 2021. 70% of the tour operators have rescheduled trips to October 2020 and beyond.

GetYourGuide took a customer-centric approach and provided full refunds for all cancellations made within 24 hours in advance. To support the suppliers, GetYourGuide has compiled information on how to apply for government support in many markets around the world and is working on multiple initiatives to improve their financial liquidity. 86% of operators generated less than $250K in sales in 2019, which implies small businesses could be hit the hardest.

Based on a survey by Arival, 28% of operators are at risk of closing business within the next 3 months, and 46% within 6 months.

What Will Happen to Tour Operators After Coronavirus?

tour operators after covid 19 2

There is a lot of uncertainty on when things will come back to normal. But something is for sure: people will try to avoid crowded places until there is a vaccine in the market and they feel safe. 

As stated above, domestic travel will bounce earlier than international travel. At Plug and Play, we believe that:

  • Tours and activities will see a higher demand by locals rather than traditional tourists. 
  • Also, we expect to see an increasing demand in rural destinations over urban ones, travelers will prefer less crowded cities and places, until social distancing phases out. Outdoor tours, walking tours, open-air activities and experiences will generate higher interest from travelers.

Tour operators and OTAs have explored going into virtual tours and experiences. GetYourGuide, Airbnb, Viator, CultureTrip, WithLocals and Feverup are some of the players that have been testing the solution. On the other hand, a large size of the “in-destination” offerings are experiences. Classes, workshops and activities have been shifting to online. 

According to Tao Tao (COO of GetYourGuide), virtual tours could be an opportunity for tour operators to engage with potential customers during the lockdown, but once everything comes back to normal, they will go through a hard time competing against Netflix and online gaming. 

Since launching Online Experiences, Airbnb estates that hosts have earned more than $1 million. The company claims it’s the company’s fastest-growing product with more than 400 activities. Read more about how people are making money out of it.

New Technologies & Startups To Help The Industry

B2B Aggregators 

  • Holibob: They provide a B2B gateway for tours and experiences globally, enabling airlines and travel partners to access unique products and incremental revenue via a wide variety of technology solutions. They also ensure that thorough due diligence is carried out on the suppliers that they work with. 

  • Trip Admit: This company has developed an end-to-end solution for activity providers to sell online via their own website and distribute their activities via local and international distribution partners. Their solution will allow the majority of the activity providers (almost 80%) to sell via their websites as well as distribution partners such as hotels and airlines.

Local Experiences

  • Fever: An entertainment discovery platform, with a mission to inspire people through experiences. The company has more than 10,000 available experiences and reaches more than 12M people each week. Recently, Fever launched “experiences from home” which allows people to book virtual tours, cooking classes, live streams and much more. 

New ways to explore the city 

  • Secret City Trails: They offer self-guided city discovery games for locals and travelers to fall in love with any city. The traveler follows the footsteps of the local creator, solving the riddles and unlocking the stories. Their games are unlike traditional walking tours, their 120+ instantly bookable games in 50 European cities take people off the beaten path.


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