5 Trends That Could Define the Future of Tour Operators

What is the future of tour operators? What are the new trends? What predictions can we make for the rest of 2020? What predictions for the future in general?

The future of business travel

Business travel will remain a highly competitive segment for tour operators and travel agents because of its attractive margins.

The world of business travel has changed enormously. Millennials now make up the majority of the world’s workforce and these digital natives are also the entrepreneurs behind a new breed of business travel solutions.

Since Millennials have never known a world without social media, smartphones, and high-speed WiFi, business travel innovations center around technology.

Innovations in travel and technology have resulted in new companies that are changing the way business travel is planned and purchased.

State-of-the-art digital travel management platforms are a reaction against the traditional tour operator and slow, expensive and analogue travel agencies with poor customer service.

Sweden-based company DIB Travel provides an all-in-one business solution that gathers hotel and flight booking services all in one place. DIB Travel combines customer service from a team of professionals with the use of deep technology: AI, Big Data, and User Experience.

Another provider is TravelPerk which has its head office in Barcelona and regional offices in London, Berlin and Chicago. TravelPerk provides business travel services for many digital revolution companies like itself that are breaking the mould in their own fields: Revolut (banking), Farfetch (fashion) and GetYourGuide (guidebook publishing).

Specialist leisure travel

You will be well aware that the line between business and leisure travel has been blurred for some time with Millennials particularly likely to extend business trips to visit local attractions or cultural sites.

However, when it comes to offering once-in-a-lifetime leisure travel experiences, there is a trend for tour operators to become increasingly specialist and niche in their services. ElderTreks, for example, is a Canadian adventure travel company for people over the age of 50.

Ancestry travel is a rising trend. Genealogy travel goes one step further and allows travelers to trace family members over the last four or five generations. Some tour operators who specialize in this type of travel make genealogy experts available to help customers research their family trees.

Ancestry travel

With genetic genealogy testing becoming ever more available to millions of people worldwide, there has been a surge in ancestry travel. People can now utilize the knowledge from their DNA test to determine their next family holiday, visiting the places where their ancestors once lived. Airbnb partnered with 23andMe (a DNA testing company) in May 2019 to do exactly this, matching customer’s DNA results with overnight accommodation and itineraries in those areas, sending travelers on trips to explore their family heritage. 

Other niche trends include under-tourism (sending travelers to untouched locations that have previously had little or no tourism), working travel, ecological tours, and extreme adventure travel.

Specialist tour operators that provide a unique selling point and specific expertise are likely to stay in demand in the future.

Working with OTAs

Online Travel Agents will continue to be one of your most important sources of business. OTAs bring in a number of benefits, including handling payments and customer service on your behalf.

You can outsource much of your online marketing and sales efforts to OTAs too. Some of the most popular OTAs for selling tours and activities include Expedia Local Expert, Viator, GetYourGuide, Klook, VELTRA, and Musement.

You will pay commission fees that usually range between 20% and 30% depending on multiple factors such as the platform you partner with, your offer, and sales volumes.

Optimize for mobile bookings

Tour operators will need to look carefully at their business models and make sure that they are future-proof.

For example, it is essential that your website and booking portals are optimized for mobile and tablet use. In 2018, Booking.com found that mobile bookings exceeded desktop bookings among its customers for the first time. In many markets, such as India and South America, smartphone use is far more dominant than bookings from a laptop.

These statistics reflect the continuing growth in smartphone use for booking travel and the importance of your social media presence.

If your business is aimed at a younger market it’s worth bearing in mind that two thirds of all mobile bookings are made by Millennials. If your product has broader appeal then consider that 64% of baby-boomers own a tablet device.

In many cases, customers using their smartphone to make a booking will use online payment methods such as PayPal or Alipay. You will need to keep track of developments in digital payment as this is an area that is constantly evolving.

Harness the latest technology

For tour operators, there are other new-generation digital services that can help your business model stay resilient and increase your market share.

The most successful travel companies are increasingly harnessing the power of big data, deep tech and artificial intelligence.

Inspired by the algorithmic trading of capital markets, Hotelmize offers profit optimization software that unlocks hidden profits from hotel bookings already made on your platform.

To date, Hotelmize has handled over $2b worth of reservations and generated more than $100m of extra profit for its customers, who include tour operators, OTAs, and wholesalers – many of them, leaders in the global travel industry.