In Asia, It’s Tours & Activities’ Time to Shine


By Stephen Joyce

I have been involved in travel technology since the late 1990’s. Prior to 2005, much of that time was spent developing custom web applications for online travel agencies, where I would integrate various online airfare or hotel booking tools, as well as develop custom interfaces or integrate third party APIs.

In 2005, a Japanese adventure activity operator approached me, hoping to develop an online system to take bookings and manage his canyoning business. (‘Canyoning’ essentially involves shooting down naturally formed waterslides, wearing little more than a wet suit, helmet and life jacket.)

It sounded fascinating, but what really intrigued me was how I had never considered online reservation systems for these types of businesses. I assumed – like everyone else – that if you wanted to go canyoning, you’d simply phone the operator once you were already at your holiday destination and book directly.

Despite plenty of airline reservation systems, hotel booking engines, and property management systems, none specifically catered to the needs of small businesses in the activity segment. An even deeper look showed the tours and activities space is currently mired in manual inefficiencies. Paper calendars, pencils, and a good eraser are the administrative tools of the trade. That being said, the travel segment, involving tens of thousands of suppliers, is ripe with potential and opportunity.

In the USA alone, we estimate there are approximately 67,000 businesses (valued at US$20 billion) in the tour and activity space, contributing to the third largest segment of the travel industry after air and accommodation. In Europe, tours and activities account for around US$40 billion. While there is no official estimate for Asia, I would approximate its value at over US$100 billion. Once Phocuswright completes their recently announced worldwide tours and activities study, we’ll know for sure.

The tours and activities market is a highly valuable and complex mosaic of a beautifully diverse but fragmented supply base, where the vast majority of businesses are small and local. Unlike hotels, airline operators, cruise ship companies, or even car rental services, there are very few global tour and activity brands.

The very nature of in-destination experiences is that the experiences are ‘in destination’ and therefore provided by the people who live and work there. Food tours, guided hikes, surf lessons, cultural excursions, all provided by entrepreneurs within communities.

For a person with a dream, a plan, and a small budget to get started, the opportunity to enter the tour and activity space and cultivate a successful ‘experience’ business is very real. It is possible, even if the experience might seem like nothing significant at first.

Take the sleepy town of Forks, Washington for example – small logging community of roughly 3,500 people that was brought into the limelight by the cult success of Stephenie Meyer’s Twilight saga. Seemingly overnight, the town became a hot bed of vampire and werewolf related tours and activities.

Nevertheless, since Thomas Cook ran his first excursion for some 150 customers in 1841, little has truly changed. The scale of the segment has certainly grown, but the fundamentals have not. The vast majority of bookings are still made post-arrival, in destination. Many businesses are still cash based, with travellers simply paying guides or operators when they check in for their experience.

The majority conducts little to no marketing other than through trusted partners like activity desks or the all too familiar printed brochure. Asia is fueled by this last minute, cash-based booking approach in particular, mainly because of the lack of legacy internet access, technologies, and payment systems.

Fortunately, times are changing. With new tools and technologies, these predominantly small businesses are increasingly able to take advantage of global distribution through larger firms like Viator, Expedia, GetYourGuide, BeMyGuest, Haiwan, and others.

Payment providers like Asia Pay, Payment Wall, and Stripe have enabled many Asia-based businesses to process online payments from travellers who prefer the convenience credit card payments. It is important to note – travellers don’t pay using local payment methods; they pay with their own preferred methods, and most (whether we like it or not) use credit cards.

Through Google, small businesses can attract new customers from around the globe by advertising or by carefully optimising their websites (which have become easier to build and manage thanks to tools like WordPress and its numerous plugins that can be used to expand websites’ functionality).

In addition to technology advancements, many regions in Asia are forgoing traditional wired connectivity in exchange for mobile. In APAC, sometimes mobile penetration rates are even higher than Internet penetration, like in China (47% vs. 46% Internet), Thailand (31% mobile vs. 28% Internet), and Malaysia (34.5% mobile vs. only 2% Internet).

Asia is ‘leapfrogging’ legacy Internet connectivity to more convenient and cost effective mobile technology. The challenge is that, despite growing support for mobile, most online tools (described earlier) are still predominantly desktop optimised.

Fortunately, that is changing too. As Asia continues to rise as a force for tourism, and as technology companies continue to develop their tools for mobile, operators will have increasing opportunities to cultivate online distribution and pre-arrival bookings.

In short, small businesses across Asia have never had more access to technologies to market their unique experiences to the world.

But, it is not just about technology or connectivity. It is also about education and business development. Now more than ever, in-destination businesses need educational support to develop effective business practices, improve customer service levels and service delivery standards. After all, what good are these technology tools without knowing how to use them strategically and effectively?

In response to this growing need for education, numerous communities have developed around tours and activities. Once such community is Tourism Tribe in Australia, which provides access to over sixty tutorials covering everything from licensing and insurance requirements, digital marketing, pricing strategies, online payments, and distribution.

Communities like Tourism Tribe are working to bridge the gap between small businesses and digital success.

So where does all this leave tourism businesses in Asia and specifically Indonesia, Malaysia, Singapore? It means that the opportunity to start and grow an in-destination experience business in this region has never been greater. And, as the sophistication of the supply base in the region grows so do all the benefits that come with it including increased employment, tourism spend, and local economic benefits.

Excursions pre-date airlines, cruise ships, and car rentals, which seems quite surprising given how little appreciation the sector has received in the past. For decades, the tours and activities space has been considered the ugly duckling of the travel industry. Well, this ugly duckling’s time to flourish has finally arrived.

We are only just beginning to see what the tours and activities segment has to offer and Asia is poised to play a big role.

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About Author

Founded by two travel and technology professionals with years of experience in Asia, Representasia specialises in sales & marketing representation throughout Southeast Asia for travel/hospitality technology providers and travel-related startups, as well as providing marketing consultancy services for hotels and travel businesses in the region.

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