Tour OperatorsSix big takeaways from Arival Asia Pacific.

Why tour operators have limited ability to rein in rampant discounting by resellers

Arrival 190709
The inaugural Arival event in Bangkok heard that the lines between operator and distributor are increasingly blurry.
Arival CEO Douglas Quinby has outlined the key points from the tour, attractions and activities sector that emerged from the discussions among 500+ travel industry attendees at the inaugural Arival Asia Pacific event in Bangkok June 24-26.

The CEO’s headline points were:

Think Asia is behind? Don’t think that way for long. Asia Pacific is the largest regional travel market, it’s the fastest growing, and its consumers are already way ahead—they’re shopping, booking and paying on mobile far more than their Western counterparts.

Traveller expectations in Asia are forcing operators and distributors across the region to catch up, and fast.

Asia has distribution like nowhere else. With nearly 50 online travel agencies (OTAs) and thousands of offline distributors operating in the region, nowhere is distribution more dynamic, and more complex.

Consolidation will be inevitable, but in the meantime, operators must develop strategies to manage major global OTAs, regional specialists, B2B wholesalers, DMCs and more.   

Pricing is out of control. The most talked-about issue at Arival was rampant discounting by resellers - and operators’ limited ability to rein in such practices. It’s a widespread operator complaint that extends across online and offline (traditional travel agency) distributors.

Many operators pin their hopes on the much-discussed idea of MSP, or minimum selling price. But implementation and oversight will be easier said than done meaning that some distributors are selling tours and attractions for less than the operators and less than their own costs to gain market share.

Operators are distributors and distributors are operators. Across the region larger players and DMCs are aggregating tours, activities and attractions and distributing them to global distributors. At the same time, they are operating their own tours. The lines between operator and distributor are increasingly blurry, making distribution more complex than other regions.

Tech from the West wants in. As online distribution and technology adoption in North America and Europe matures, global OTAs and reservation system companies are eyeing Asia for their next wave of growth.

The industry can have real social impact. The inspiring talks from Lien Nguyen of I Love Asia Tour, Achi Thamparipattra of HiveSters, Raj Gyawali of Socialtours, and others, made plain the power and potential of our industry to have real, tangible impact on local communities.

Creators and sellers of in-destination experiences have enormous opportunity to help alleviate poverty, preserve the environment, empower women and micro-entrepreneurs and support local communities and cultures—while also building successful, profitable businesses.

“It is still very early days for the in-destination industry in Asia, but it’s clear that much of the future of our industry will be defined here in Asia Pacific,” said Quinby.

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