Demand for unique experiences is an unstoppable trend that will continue to shape how travel businesses operate and engage with their customers in 2024 and beyond.
That’s according to Nils Chrestin, the chief financial officer of GetYourGuide, the most heavily funded company in tours and activity marketplaces. In June, the company closed an additional $194 million in funding, raising its total investment over the $1 billion threshold.
GetYourGuide is one of the dominant online travel marketplaces for experiences, along with Tripadvisor’s Viator and TUI Group’s Musement. Yet the market remains highly fragmented and offline, with these stakeholders accounting for less than 25% of the total addressable market for tours and activities.
The company, headquartered in Berlin, offers 118,000 activities from more than 18,000 experience providers. These offerings include guided tours led by local experts, culinary tours, cooking and craft workshops. It has also focused on Originals by GetYourGuide, its unique, curated experiences, such as a Museum of Modern Art in New York or Turning the Lights On at the Vatican Museums.
Chrestin, a German national who joined the company in 2019, spoke with Skift as the company heads into its 15th year of operation. He outlined GetYourGuide’s focus on deep specialization in creating unique experiences, the competitive landscape, and requests he’s been getting from investors.
*This interview has been edited for length and clarity.
What Experience Sector Trends Is GetYourGuide Seeing?
The important thing is to be an inch wide and a mile deep.
So, you pick one use case, one vertical, one niche. And then all you do is really obsess over creating a beautiful product and creating value add to both sides of that marketplace. And so, for us, that’s obviously experiences.
I very much agree with what Brian Chesky from Airbnb said recently, that there is ultimately an opportunity for somebody to build a hundred billion company in this space. And we could not agree more.
I don’t necessarily think it’s the Chat Bot becoming ChatGPT type of moment … I do believe rather than there being kind of a zero-to-one switch suddenly, I think it just requires meticulous, continuous execution and a really long-term vision.
I think on the consumer side it’s equally easy to fall in love with the value proposition because ultimately the reality is, most people, if they’re fortunate enough, may travel to Rome once in their life.
The real reason why they’re going there is not to be in a plane or stay in some home or in a hotel. But it is to take home these memories, right, which they can share with their families, with their friends, with their children. And that’s where we come in.
It’s all for the same reason. We want to create memories. And I think that trend to go back to your question in terms of what trends we’re seeing, that trend is really unstoppable.
And so this whole notion of saving money to experience the world and working to have money to experience the world that in our view, [is] a very strong trend over the last decade.
What’s GetYourGuide’s Growth Rate Like Now?
If you take it on average for a significant number of years leading up to the pandemic, basically we doubled every year. But of course, growth at an increasing scale at some point slows down. So that’s also what you see with GetYourGuide.
But our growth rates, nevertheless, for the third quarter and also year to date, are significantly above what some of the other travel, every other travel peer has reported in quarter 3.
And frankly, that’s been the same thing for each quarterly reporting over the last 12 [to] 18 months.
Is GetYourGuide Profitable at This Point?
So, we’ve been profitable now for markets for the full year of 2023. Absolutely, quarter 3 is a profitable quarter for us as well. I think what I’ve tried to allude to is that… If you look at year-on-year margin improvement on the EBITDA side, we’ve also made substantially more progress than our peers who have just reported their numbers.
So yes, we’re profitable in our core markets, we’re profitable in the third quarter, and if you look at it from a year-on-year perspective, [we] significantly added more margin as the competitors and the peers did in our space.
GetYourGuide is Wholly Centered on Private Equity. Does it Make Business Sense to Take the Company Public?
I think whether you have public or private shareholders, ultimately, what the investors are tasking the management team to do is increase the value of their investment.
Some of our peer groups are successfully doing that in the public markets. Some, if you look at the last 12, 18 months of our peer group, aren’t doing that very successfully in the public markets.
We’ve done this quite successfully in the private markets. And so our investors are extremely happy, with the progress of the business, with the value appreciation of their investment in GetYourGuide.
I think from our vision and the purpose of GetYourGuide is to unlock unforgettable memories and experiences for our customers and ultimately be a very successful and reliable partner for our suppliers. And so we can do that in the private market and we could also do that in the public market.
I think we’re very fortunate with backers like KKR and Temasek and others to be able to take a very long-term view and do that in the private markets. But this is not to say that at some point, we might consider becoming a public company, but this is not something which we’re actively discussing at this point.
So this is not something you should expect in the short term coming out of GetYourGuide. It is certainly an option for us, the reality is we get quite a bit of requests from public market investors, but at this point it’s neither a necessity for us to fulfill our vision and long-term goal to become the undisputed global market leader. So we have the luxury of optionality here.
Brian Chesky’s of the Opinion No One’s Cracked Experiences. Do you Agree?
I think a statement of having cracked it, the wording of it implies you’re slowing down and you’re pausing and you’re not challenging, not innovating, not pushing. So I think we certainly feel that we understand how to grow this business.
Would I say right now that we’ve cracked it and that there’s no room for further innovation and improvement? No, I would not say that.
But I frankly hope I will never say that because ultimately that’s really what’s keeping us waking up with a smile on our face, happy to go to work every day that we can always continue to innovate, add new value to our supplier base, add new value to our customers.
So that’s how I would describe it.
Do I feel that we have a long growth runway ahead of us across the world? Obviously we’re the clear market leader in Europe. And the one who’s gaining the most market share in the U.S. and in North America. But that does not mean that we will do in two, three years all of our things in the same way as we’ve done them today.
I think there’s constantly a need to innovate. And frankly for us, this is a pleasure. We’re so obsessed over that one inch within the broader travel market of experiences.
Can You Quantify GetYourGuide’s U.S. Market Growth?
The U. S. market is one of our fastest-growing markets – that I can say. In some ways I would wish we were disclosing those types of numbers because they’re just so stellar, they speak for the business and the execution, but those are not numbers which we’re sharing publicly at the moment.
Tripadvisor CEO Matthew Goldberg the Majority of Offline Bookings as the main competitor. What’s your opinion?
I actually don’t agree with that because ultimately, if you make the statement that offline is your biggest competitor, what you’re essentially saying is that your suppliers are your biggest competitor, right? Because they sell a lot of their business still offline.
And we look at suppliers as our partners, not as our competitors.
The reality is that how suppliers distribute, they have a variety of channels at their disposal. Some of the larger ones, with brand names and potentially presence across the world, are likely able to push more volume through online channels, as opposed to the very small ones.
So I very much look at our supplier base as partners and would not categorize them as competitors. I think the shift to online, however, is largely consumer driven.
If you were to ask your colleagues and your circle of friends, describe to me what you understand under experiences, you would get very different answers. That is not yet a defined term. And you don’t even have to go as far as asking where would you book them. I mean, obviously an increasing number of people find it very convenient to book those things online.
So there’s a lot of innovation, coming as we speak. But I think the shift to online is very much driven by consumers getting a better and better understanding of what experiences are and understanding that it’s actually very pleasant, convenient, helpful and trustworthy to book those types of things online on Get Your Guide.
But if we speak about the competitive landscape, I would personally look at the ones who are offering that service in the online channel and obviously that’s where we want to make sure we continue to meet the pack and kind of put a larger distance between us and the other players.
GetYourGuide is Seen to Own the Relationship With the Customer, Not the Tour Operators. What’s Your View on That?
The entire industry and whether that’s the supplier who comes up with experiences or whether those are platforms like GetYourGuide, the common goal we all have is to create the most beautiful and provide the most beautiful experiences to travelers and customers?
The experience and the creation of the experience, that’s obviously a very unique skill set of these suppliers. And they do a wonderful job at that and continuously innovating and coming up with new experiences. Our skill set is to be that trusted platform globally in which customers can use around the world where they can engage with our customer service, where they can ask questions, where they can, you know, discover new itineraries, share with friends, all the different experiences they want to do.
So ultimately, that’s where we’re very united.
And then how customers behave, that is not something we, any of us directly really steer. So I think it’s ultimately whether customers like to build relationships and do their itineraries with us or whether they do that with suppliers I think we would all agree that’s driven by a customer’s choice and it should be.
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