Skift Take
The demand for experiences doesn’t seem to be slowing down. These travel executives discuss the challenges and the opportunities.
The experiences sector has seen enormous growth. And Skift Researchâs Venture Investment Trends in Travel 2024 report revealed the experiences sector was one of the few in the travel industry to record an increase in venture capital investment.
But the sector has plenty of challenges. Peek founder and CEO Ruzwana Bashir, senior partner at McKinsey & Company Jules Seely, and TUI Musement Chief Commerical Officer Nishank Gopalkrishnan discussed the outlook at the Skift Global Forum.
Watch the complete video of the discussion below.
Five Key Points
Rising Importance of Experiences: The panel emphasized that experiences are becoming central to travel decisions. Spending on experiences has increased significantly, with travelers more inclined to splurge on unique moments that matter, driven largely by social media and personal sharing.
Booking Window Challenges: While experiences are key to travel choices, there’s often a disconnect between booking them early in the planning process versus later. Hotels and flights are typically booked 30 days in advance, but experiences are frequently booked within the last week of the trip, especially depending on mood or weather.
B2B Opportunities and Loyalty: Integrating experiences into the booking flow (whether for airlines, hotels, or online travel agencies) can foster stronger customer loyalty. There’s a notable difference in customer satisfaction and loyalty between those who book experiences versus those who donât, suggesting a vital role for travel companies in promoting experiences.
Technology and Fragmentation: The experiences industry remains fragmented, with many small, local operators lacking sophisticated tools. However, AI and digitization are seen as critical to helping businesses scale while maintaining high customer experience standards. This could empower small operators and create new ways for customers to navigate the growing number of choices.
Curating Experiences: The discussion highlighted the importance of curation in the experiences sector. With an overwhelming number of options (e.g., 750 Eiffel Tower tours), the challenge lies in helping travelers find relevant, high-quality options. Travel companies are tasked with providing meaningful, curated recommendations to ensure a smooth and personalized experience.
Discussion Summary
The panel discussed the growing importance of experiences in travel, noting that travelers are increasingly prioritizing unique moments over traditional purchases. Spending on experiences has risen sharply, driven by social media and the desire to create shareable memories. However, while experiences are central to travel decisions, many travelers book them later, often within the last week of their trip. There is a growing need for travel companies to integrate experiences into the booking process, which can foster greater customer loyalty.
Technology, especially artificial intelligence, is seen as a key driver for scaling the fragmented experiences industry, where many small businesses still operate offline. AI can also help customers navigate the overwhelming number of options by offering curated recommendations. Business-to-business opportunities are emerging as travel brands aim to provide experiences that enhance the customer journey and increase satisfaction. Local experiences are especially valuable, providing travel companies a way to stay relevant year-round, even when travelers stay close to home.
Despite the potential, the sector remains highly fragmented, with many operators struggling to digitize. Curation and personalization are crucial to helping travelers choose from a vast array of experiences while maintaining high quality and relevance.
