Tour Operators Embrace the Long-Elusive Software Solution

25.08.2023 - 14:22 / skift.com / Long

Tour operators were decimated during the pandemic. If they wanted to survive, they had to figure out how to bring in more revenue and operate business more efficiently. 

That has led to a move by tour operators toward adopting new technologies, like booking platforms and business management software. Now, those technology advances are giving companies a much-needed boost post-pandemic. 

“It’s a virtuous circle: The more you sell, the more you sell. The better your tours perform, the more visibility they’re going to get, and the more bookings it’s going to generate,” said Douglas Quinby, co-founder and CEO of Arival, which produces conferences and research reports for the tour and activities industry.

Consisting largely of mom-and-pop small businesses, the tour operator sector is arguably the most behind technologically of any in the industry. Companies in the sector have long struggled because of outdated practices like recording data manually. Those problems could include double bookings or errors in data transfer. That, in turn, leads to higher cancellation rates and increased customer dissatisfaction.

A recent survey by Arival of more than 3,500 businesses found that more than half of day tour operators are still not using an online booking system. 

But, that is changing. 

Some tour operators are spending more than $1 million on technology. Among those big spenders is Intrepid Travel, which is upping its technology budget for 2023 by 189 percent from 2019. The global tour operator software market, estimated to be worth $500 million in 2020, is projected to be valued at $1.2 billion by 2026, according to a study by market research firm Facts & Factors. 

The global tour operator software market in 2020

Projected global tour operator software market by 2026

As tour operators look toward digitizing, the trick generally is to subscribe to digital services that can expand reach and automate processes. 

There’s been a push to get more tour operators working with a booking platform, like GetYourGuide, that can connect companies to other systems and expand their customer base. GetYourGuide said new platform features and initiatives have led to a decrease of booking errors by more than 50 percent in 2022, which means a more seamless experience for both the operator and the customer. 

At one point, some companies had tried to invest in their own digital solutions, but much of that effort fizzled out. 

“In recent years, however, the technology available in the market has advanced, and tour operators have also realized that it is often better to buy than make,” Manuel Hilty, CEO of Nezasa, said. Nezasa’s platform, called TripBuilder, combines tourism products and services from multiple sources into one place.