Should your booking system be independent?

This blog is an extract from our eBook 'A guide to choosing the right booking system'. You can get your free copy here.

In 2018, Skift released a blog titled ‘why everybody now wants a piece of the tours and activities sector’. Well, industry projections of the sector are now valued at around $150 billion annually and this is expected to continue to grow by nine percent annually over the coming years.

The sector is now one of the largest opportunities in travel. And in 2018, we seen some big industry shake ups as two booking systems were acquired by industry giants within one week.

April 2018 - FareHarbor is acquired by Bookings Holdings

Announced as the biggest deal yet in the tour & activities industry, Booking Holdings acquired U.S. based booking software provider FareHarbor in April 2018.

FareHarbor, founded in 2013, claims to have more than 5,000 tours and activity providers using its software in the United States. It was long-speculated that Booking Holdings would purchase GetYourGuide, an existing activities marketplace, but the purchase of FareHarbor showed that the business is building market entry from the booking technology side instead.

Booking.com CEO Gillian Tans said, "Today travel is fueled by technology, yet the local experiences and attractions marketplace is still largely offline. FareHarbor's technology allows local tours and attractions to easily bring their businesses online. We see an immense opportunity to leverage this technology to bring more local experiences online, benefiting the entire global travel ecosystem for both consumers and local businesses by allowing them to connect instantly through a seamless digital experience."

April 2018 - Bokun is acquired by TripAdvisor

A day after the Booking Holdings announcement, TripAdvisor announced their acquisition of Iceland based booking software provider Bokun. It was interesting timing, as TripAdvisor has also placed an offer for FareHarbor earlier in the year that was declined.

Founded in 2012, Bokun is the dominant booking software provider to tour & activity operators in Iceland. At acquisition, TripAdvisor announced a change the Bokun business model where pricing would change from subscription plans to a per-booking model. It is now offering a free three-month trial and 0.1 percent commission per booking in a bid to take market share.

Dermot Halpin, President of TripAdvisor Experiences and Rentals, said, “As the industry leader, our opportunity in this space is enormous, We’re committed to taking the experiences sector far beyond its current online penetration of just 20 percent, and Bokun will play a critical role in this mission.”

In 2017, TripAdvisor also acquired leading marketplace Viator.

Could joining one of these acquired booking systems limit your future distribution?

That's the question that was being asked by tour and activity companies at key events Arival and WTM London.

Here is a quote from a recent interview with Peter Syme, Owner of 1000 Mile Jouneys, at Arival 2018. You can watch the full interview here.

“Reservation systems have been about more of less longer than most OTAs… If the trend goes the way we think it’s going to go, by the OTAs getting better and better at their job and the distribution shifting from direct at the moment to OTAs, they gain more and more over the industry. That’s not necessarily a bad thing depending on what the split is, but it does present the supplier with multiple challenges.”

“If they also own the technology that runs your business, you’ve not just given your distribution to an OTA that can not just make your business or break your business in the switch of an algorithm. You’ve given the technology that is running your business to a company that is global… and on the whole, we are tiny suppliers with no negotiating power with that."

We'd like to hear what tour and activity companies have to say. Comment below with your feedback!