Rezdy’s CEO Prediction for The Experiences Industry
Chris Atkin gives a glimpse into the future
Raleigh, NC, USA & Sydney, Australia, Jan. 24, 2022 – I am not generally big on predictions but as we enter such a critical new year for the experiences industry, I have been persuaded to dust off my crystal ball and share my thoughts about what emerging trends will help shape the near future.
Next…the Great Vacation
One well-publicized topic is the Great Resignation in which employees, frustrated with the ongoing pandemic, decided “en masse” to recalibrate their lives. This Big Quit phenomenon is affecting Millennials through to Boomers and has changed the dynamics of the pursuit of wealth. In the U.S. more than 24 million quit their jobs from April to September 2021, in the search for a balanced lifestyle.
One of the healthier antidotes to burn out and stress is to get out and do something beneficial for the mind and the body. With that in mind, I suggest we are about to see the Great Vacation. The results of this will be an increased demand for outdoor adventures, wellness, and mindfulness activities, more family small group experiences; all examples that we are already seeing. Travelers want to make up for lost time over the last two years and the pent-up demand could outpace supply with certain sought-after experiences. We will see a consequential extension of the usual seasonality as people seek to make that well-deserved break happen, including increased time while in-destination to take advantage of all of the experiences the destination has to offer.
Experiences bookings will start to join the digital party…for real
There is a lot of talk about the connected trip and the benefit of the traveler having one place to capture their travel itinerary. Experiences are the central part of travel, ‘the best part of travel’ as our friends at Arival describe it, so it has to be an integral part of that advancement in traveler experience. We will see vastly more experiences bookable in a digital environment, particularly in-destination, with the use of QR codes, which are here to stay. QR codes had a rocky adoption but that has turned around in the last few years as people have been trained through COVID to use QR codes to travel, view menus, or demonstrate their vaccine status. Tomorrow’s travelers do not want paper vouchers but expect QR codes and e-tickets that can be stored in smartphone ‘wallets’, the same as an airline boarding pass. It’s a must-have, not a nice-to-have, both for ease and hygiene reasons. Technology will power much of 2022 from discovery to entry of all experiences.
We enter the Age of Channel Management for Experiences
Without distribution being digitized, there will be a limit to the capture of digital bookings so we will see more adoption by suppliers of distribution Channel Management. This will be a transformational change for the experiences industry. The full scale of possible change is massive, think landline phones to smartphones. Where the original function of the device, making calls, no longer ranks in the top ten things you use a smartphone for. Channel Management, long used by hotels, is the ability for an operator to better manage their inventory and pricing based on the channel of distribution they want – right down to the source of business, whether it’s an OTA, travel agent or hotel partner.
This is no longer a pipedream for the experiences industry (it has been invaluable within the hotel industry throughout the century), but a reality courtesy of smarter technology. Channel Management will deliver suppliers control over who not only gets inventory but when and at what price, based on the suppliers’ business criteria. The first phase may be more like landline to cell phone but it will remove inefficiencies and ensure that resellers are delivering measurable return on investment for the commissions they receive.
Continued Investment in Experiences Technology
Technology is an enabler, and it never sleeps. With around 3 in 4 bookings still offline, the experiences industry is still in its infancy as far as technology is concerned, hence it continues to draw attention and significant funding from the investor community. They see the opportunities to invest in the ‘best part of travel’ for a number of reasons:
A heavily offline industry populated by small to medium-sized operators is poised to drive significant revenue return on that capital.
The trend towards spending on experiences, rather than assets, are well understood, boosted by the ending of the pandemic, and are perceived to provide a tailwind to the growth of the sector from the current estimate of $250B (USD).
Finally, there are unmatched levels of money in the investment funds and plenty of strong pitches to invest behind, with over $500M (USD) invested into the experiences industry since the start of the pandemic.
New Entrants in the Experiences Industry
In the last 12 months, I have literally traveled around the world and heard from people of their unrelenting desire to travel and enjoy experiences again. But, what truly excites me about 2022 is the new emerging technologies, the fresh ideas, and new players who will challenge the status quo. There are so many intricacies to delivering technology into the experiences space, driven by the complexity of the experiences ecosystem where an operator’s relationships are longstanding and deep with hotels and other businesses within their destination and beyond. Seeking to address ‘the problem’ for those many different segments is going to encourage start-ups that smell the opportunity to be a unicorn. If they seize that opportunity and remove that problem through innovative, easy to adopt technology, then vast chunks of the industry can be captured very quickly. We may see a very different technology landscape by the time we next travel without considering the technicalities of PCR tests, mask-wearing and entry restrictions.
With the final phases of the pandemic hopefully underway, the future is bright for experiences.